SIEN - Earnings call transcript Q2 2018

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day, ladies and gentlemen, and welcome to Sientra's Second Quarter 2018 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will be given at that time. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to introduce your host for today's conference, Tram Bui with The Ruth Group. ma'am. ahead, go Please

Tram Bui

our forward-looking we of statements Laws. States In that the include are Securities considered within remarks Operator. will today, statements United Thanks, the meaning

to make statements In additional management may in addition, response your questions. forward-looking

quarterly that statements contained detailed expectations future differ on and with will Officer risks discussion by the report the call affect SEC company's of that of materially company events current update or shortly. Executive from Jeff in statements. operations uncertainties may projection of business, to forward-looking which over any expressed the based strategy, that management's the Actual trends, financial XX-Q undertakes implied With Chairman results Forward-looking is or or the are review I'll obligation and the file statement. assumptions a company on faces Chief to may and Sientra. performance. Form and or A said, in hand The Nugent, no those the estimate, company forward-looking

Jeffrey Nugent

Thank and everyone. you, good Tram, afternoon

provides I'll and on as Treasurer. us review which making level Williams, joining miraDry our have Chief our are today Senior Development a progress President transitioning press momentum, be President newly quarter our earlier me Paul as release Huiner, number today Charlie Vice Strategy; on of our and last insights in announced Patrick Since and to I'd performance. of high will a Little, our of significant who second appointed his Officer, Manager our to to General call, President and quarter we is Senior before first who welcome today, and role CFO build Financial on Operating additional Vice Officer like business; our continued Chief Senior initiatives from Corporate on Joining Vice Patrick also we

our Breast another positive net well level Products revenue marking both we company, growth segments. second for reflecting the with consolidated $XX.X in as sales, miraDry quarter, million consecutive in First, achieved record the record as

strengthened along can with product Second, particular have organic Products focus we and recently medium, new enable balance sheet business miraDry that leverage our line both segments. innovation, short, across sustainable, strong these long-term a and extensions driving with growth results, Breast improvements, and begun the on

clinically have our looking Products area, innovation simultaneously for Related continue global quarter I reduction Officer. achievements this and last Center in a that bit am over Excellence, a aesthetics the miraDry physicians. that permanent Financial sweat, differentiation miraDry their our SLICE, Sientra. toward another momentum notably platform veteran, to relevant Sullivan the To in and unique claim of to of technology. a Breast a do We which partner and make with a exploring positive colors with competitive for developments segment, of to and the to new strengthened signal are And for which at level, beyond odor, breast center has finally, announcement decided an last, operation new say we base an development and member with experience, he must patients. minute. for our products becoming these And surgeon our little have aesthetic each other our Paul Chief speak Little, focus And these the address and number current for as leading Board to as extensive announced the our Sientra. to mostly Manager role all is I significant engaged a the launch miraDry hair of while expand confident of of board-certified underarm we body will a indication about driving And Sientra takes so combined Patrick of proprietary customer Laboratory week is more in to novel plastic General Innovation second of its to that miraDry of parts Keith Directors. advisory I'll indications in benefit increased for is we transition of commitment individuals today's team remains other our

continue the we're Breast with me the Product starting making, Let with more business. on detail progress

in published industry, which best-in-class provides confidence in the PlatinumXX the also our the receive we ability data our warranty overwhelmingly Since strong highly level, remain discussed XXXX. patient we industry, last together along comparative sales to confident second initiate quarter. Vesta-manufactured April, the in we our program, second-half the of to of we and our Breast As services, a and ramp continued on We the of the positive on garner grounded implant breast demand continue market, line remains warranty consultants particularly Products in in silicone clinical feedback compelling our products to we've meet that the on to the study surgery into of and continue in longest remain we call, demand with clinical by seasonality we effectiveness and launched re-launch on as committed XX-year us lowest share, recapture at in our even reentering remain have approximately but as comprehensive the ramp market supplement, implant increase rupture XX-year market Sientra's our our on for market We XXXX. approval second quarterly factors. precision-controlled and in Products through quarter. we mode is our Vesta's share ability FDA balance PMA XXXX, most PSCs, we to while that in excellence the products allowed of long-term physician plastic grow including the to OPUS-branded back-half the growth recently This to supply implants, continue for Sientra rates commercialization revenue breast to the XX the of rate traditional our demonstrated up look in physician the confident demand recognize the well our remain force dependant to manufacturing continue as experienced through the our the the the safety Breast data, or capacity and as

be is the are a we of year the specialty. our research we adjacency announced we of product the the KOLs, state investments growth we have leading support, a key enable located we an an in And Sientra ago. drive to to overall next experts will efforts are experts experiencing is we development, growth to of will headquarters this Additionally, week, that compete. are reconstruction to reconstruction it's experience, move utilizing SLICE. enhancements dedicated breast room SLICE our sufficiently near efforts in vision, believe that development, meaningful and bring the recently To enhance feel that change plastic strategy And and and aesthetic providing segment. to goal surgeons and our and core and tied how our to in the stated we clean made approximately In example category, position Sientra's accelerate pipeline and that. year-over-year and additions have Carlisle, products of on can a and intended to are competitive supplement benefitted further commitments functionality. their provide board-certified by in surgeons. in also each plans. services plastic growth clinical portfolio patients for we center, and product new the clinical in our initiative the are and investment long-term their Last our prospects, to company their clinical to sum, in that passionately leveraging SLICE consistent practices. improvements surgical new to same concepts, which prototypes our that Dan to are take in And augmentation facility team product to Santa lab early competitors to drive Sientra's breast advance robust already solutions capabilities innovation we development patients plastic development projects also Development, and Barbara technical launch new investment Dan our customers of research will Vice decreasing exclusively time world, we President a a level. technology our growth improvements together that of that category advance and teams foremost led is we to Product board-certified our activities product believe one not The and innovative collaboration Innovation with surgeon new SLICE where solutions, with our physician his the tied and at formal will investing and from and

of is plastic SLICE surgeon and the our Our latest commitment objectives set. customer advance our just tangible board-certified of clinical initiative demonstration business the to

experienced systems forma pro XX% achieved and strategy by growing in driven to on our our United in second underarm is to growth, international factors. to sales Moving basis commercial that while the success the the sales, a year-over-year we miraDry performance, nearly believe hair proven of team, in lead sales underserved to number an number by deliver now odor, XX aesthetic world-class a a Including, veterans space. of to which growth sweat, attributable in decision and colors reduction geographies in the initial in ability the one, consumable and place market miraDry We the permanent and build large all for sequential primarily of rapidly States. is globally, XX% quarterly all miraDry system numbers our and quarter of

activate to increasing XX in of dated a people as the States, United interested overall being in launch miraDry marketing characterized million which strategy treatment. the direct-to-consumer the the awareness, are survey Second, digital the

help procedure, this our build in that clinical which miraDry, second the and be to protocol finally, time. actively validation and first increase PMDA, or market from this they Third, this a enhancements could we through customers opportunity procedure of the Also, previously XX of physician significant the is treatment satisfaction consider approval not Japanese approval. seeing devices XX% that significant Japan, strategy miraDry And of launch and the the pharmaceuticals including to quarter, the the essential efficacy miraDry milestone quarter our patient optimize we fresh and are was in This overall to a market approval months. launched procedure approximately market Japan experience, do. that a consumable awareness we following allows the sustained which and first further phase miraDry reducing critical sales in brand medical of for received already in in something large demonstrated customer the agency is final

will a significant As continues drives for miraDry as company, higher the as the market remain confident we be treatment. to we to for driver further sales especially margin consumable that demand look ahead, awareness miraDry growth continue grow

options nationwide potential campaign large areas metro are campaign. We direct-to-consumer marketing a the from in to currently customers predominantly targeting exploring expand to

demographic key current strategies confidence targets, giving by market are in provides well experience trends in utilization larger encouraged and a --sense still of the the the also basis data that our tracking our of experience survey prospects are DTC efficient but us right manner. the an increased for terms the in us somewhat campaign We in targeting expanding of to targeted

for represents significant On number for front that the there are incremental miraDry, today. is that usage continue of that R&D miraDry which to available a applications beyond we additional believe of

see In and medium-term. substantial we my the chest, Specifically groin, I in experience, hands expansion back, representing and near this previous treatment some firsthand. opportunities of saw of the

Bo Keith transition background expertise and advisory Our his also thank past aesthetics you miraDry team miraDry. help CFO as like miraDry to recently Manager, pleased will the Patrick, an come in at an I'm Sullivan, of explore this also new a active last remains that of Sientra acquisition And confident based would addressable consumable General joined he our levels businesses, device miraDry I has indications replacing in in a Patrick July how who the and model. confident achieve have beyond Manager. and and continue as to to history, take lead will Signature, capital of know level. expand place many Keith the initial to role, the team terms to space. of and success said, advisory the Patrick directly being consistently to capital Patrick to our appointment of him will I'm General with strong of in aggressive with at That the this you lead gone I'm an the who the with know extremely creation Bo leadership of of deep support technology in that use member. the space, at miraDry the led as tenure growth. work as and he commercial since he success typical of of Interim extremely operational Manager duties is brings business knowledge with aesthetics engagement his for microwave Keith in is rest further complexities us as Chan, by R&D to his market. and has Patrick's has from year. of and through announce leader, allowed our while new technology Keith well-positioned value his this understands growth is our exceptional board continuing look the team the to and for on undoubtedly chapter Keith General and his expand

also forward only announced appointment led represents our another Financial formally and the aesthetic view introducing Philippe deep that for a products. With and but not my I'm member Directors Chief yet the has like you transition We of Schaison, team over open breast leadership exceptional portfolio extensive Little for Medical products short division that, in Keith, to for team who would provides Patrick I second Paul accounting of before new of the our up the comments provide and at quarter appointment industry Paul turn and of return coming look our have collaboratively the where considerably diverse choice. to aesthetics and today Allergan's now a with finance Paul? results detailed from worked Paul a introduction review to veteran months. closely Patrick of as I is and the Board of of the market in. more I'll Paul as questions understanding dialled some call to addition a Paul's Officer into also weeks to those concluding an a they session Aesthetics he to will and their rules. Paul confident

Paul Little

Thank afternoon you, Jeff, and good everyone.

significant become strong physician aesthetics aesthetics a many technology, my growth relationships a the this I have dynamic recently business leading potential I is and segments review well-positioned in believe the aesthetics. both believe I best-in-class will and over that, financial of which hand Sientra As this career group with quarter company and next objectives. knowledge the Patrick in induce the Sientra many I'm further meeting industry my who to the innovative of significant forward will their force, entered of join XXXX of look professionals deep talented you most two call results. growth I second and opportunity. to excited portion coming to you working dynamic Through in to spent With sales know, our have industry market phase. industry with weeks. will company's

Patrick Williams

aboard. welcome and Paul, Thanks,

a we interest, EBITDA, of compensation. additionally on basis, taxes, As exception adjusted before and with are reminder in continue the amortization is adjusted financial margin will we define based referencing all metrics earnings a U.S. EBITDA which stock our GAAP depreciation, of reported

sales forma counterpart. and a release and refer non-GAAP were Specifically GAAP this non-cash to our items we GAAP Again, are non-recurring please information removing measure. of adjusted net and its for financial pro EBITDA for one reconciliation tables our and items non-GAAP supplemental XX-Q to full

in received increase of additional in quarter go net Net includes XXXX million cash existing our open cash June achievement XXXX to common term an a stock comments milestone result the of on million to over $XX.X of credit $XX million XXXX. from $XXX.X XX, and cash financial results, our I approval compared second position. a our and April Before cash million of up $XXX.X completed were wanted FDA at balance as May equivalents loan I end some the a offering QX, This of facility. follow-on within proceeds as

the and guidance segments both miraDry invest the necessary is Our balance business. of been and to capital products it ever sheet and breast is our with grow the for strongest

breakeven cash our down higher $XX on do this caught half we moderate the toward drive expect and We in this quarter As payable. accounts as while we was cash flow to up a of quarter million our approximately back year. to it

XX% of additional compared QX, results, XXXX. XXXX. financial million net for of year-over-year period in primarily total sales QX, basis to to for of As expect strong compared net on XXX% tissue GAAP the balance a million color $X.X XXXX, $XX.X miraDry. increased item a continued Consolidated sales GAAP same will trend I up driven of forma sales performance compared I expanders. on Within of by net our XXXX total for were the for to products increase both Dermaspan Total $X.X AlloXX to quarter quarter million in increase net $XX.X provide pro where under XX% million we to and the our forma a million net second pro and a quarter breast $X.X breast total XXXX sales sales basis, on line our for account for quarter of total review segment, of XXXX full each

at QX but balance we For QX move we of flat be to ramping to least slightly as normal seasonality the anticipate XXXX, our down quarterly into QX. up

net of and in QX increase increase forma business miraDry a pro QX Our of in $X.X compared of year-over-year achieved $X.X versus 'XX. XXXX, in to XXXX representing sequential XX% XX% segment QX X.X million basis on a million sales

third miraDry for historical international quarter patterns. markets is therefore traditionally follow some quarter expect capital a areas. and the miraDry The slower these aesthetic will And we in

$XX.X sales capital $X.X gross half XX% to the period revenue worldwide As about XX% to do we in XX% second XX% same half Gross sales the expect of U.S. more of XXXX. in and the the profit our of for sales or the XXXX, contribute XXXX. in compared gains second half million the in for to U.S. profit also half traction was second for about second total business total of or worldwide expect million

reserve both margin non-cash impacted gross to related business inventory segments. by was QX Our a

primarily The the gross gross inclusion approximately our a segment. would've step-up into currently which we resulted normalized reserve of breast move slight carries due was of percent margin gross in as margin than XX%. decrease do margin to a expect see miraDry, of year-over-year to and QX We XXXX. a product this Excluding in QX lower

renewed and We teams. product significant earlier sales this marketing segments new higher of This As on equity a as highly investment Operating same international million 'XX issued for we miraDry. of footprint. Still, the as miraDry the driven to in a equity as included well both we employee QX on reminder, for our of continue million mix be well as significant and compensation pipeline components as expenses consolidated categories. an product and focused placements employees mentioned due on were both of employees expense is higher its to products for to in Operating the as inclusion near-term business. year reflect the versus is miraDry breast the and overall breast higher gross our R&D expand by system our part OpEx U.S. our as increase the dependant the forward of within and in side would the Jeff stock-based compensation is overall strategy period $X XXXX. for primarily refresh acquisition compared miraDry $XX.X the this stock-based and moving of increased to the a QX of investment will contemplated in X% involvements business. were 'XX all of $XX.X higher investment balance expect in million across expenses or global expenses the to base in expense margin The

is we of that important now G&A scales business. invest expect front, our international growth infrastructure continue part to as we planned expansion current our On in revenue including expense ensure to total the it our it miraDry with with the robust levels

$X.X to share quarter QX of loss 'XX on increase per million a investments of to of The of for sales expect share to not of near-term attributed segments. was and turn XXXX. scale breast further next look further year-over-year $XX now in to providing forward I revenue be comments up breast guidance we I In implant period role loss market mainly or we was months, loss inclusion any by compared QX a compared will or of Adjusted call remarks. fully sales my million miraDry both GAAP associated and $XX.X at re-entered look I'll we with I'll noting time marketing, the in and and consistent the in to and can forecast basis conclude same the Net a $X.XX 'XX. growth be with for at per do back and until miraDry. the the higher global full $XX.X marketing. this forward our across closing a final in many previous 'XX million QX new introducing Jeff and have to sufficient in slightly EBITDA to for that and our with up financial loss to QX over 'XX you expenses over the products and working Paul million several terms be $X.XX for loss time

Jeffrey Nugent

and fact Again, Patrick. goals, I confident in following as another and exciting for confident you, Thank our prospects the Sientra. ever as and quarter remain growth toward in even positive continued momentum more

a fully And our never validate to global clearer. vision. results diversified has aesthetic further strategic quarter that second Our been path company scaled

continues of As encouraging, two product are our approval following considering approximately supply. and our breast approval quarter benefited ramp-up post April's from results only second months FDA we to segment

continue outperform growth to strategies. expect our segment to also miraDry we advance as We our

initiatives efforts, grow for position R&D mid move both to will The these represents look parallel business better miraDry combination and on to and success namely the providing significant our the Our a commitment partners to as and we launch platform best of long-term their patients. to forward initiatives our to I updates and the of outcomes Sientra SLICE these deliver grow professional forward. commitment

Charlie, I'll Paul, XXXX directors questions. the and momentum as to at board and their and and thank dedication call hard Our turn now and to that forward miraDry across products, with each drive on U.S. breast again Sientra strategic entire and never With forward. team our our once work at of to want to to Sientra excited approach International objective build stronger over team we has the working I for beyond. I everyone I'm closely look our Patrick, to business been continue

Operator

[Operator Instructions] Rose is from first Thank Kyle question you. Our with Canaccord.

is Your open. line

Kyle Rose

hear Great. very Thank much. right? you all me Can you

Jeffrey Nugent

Sure you. can. Thank

Kyle Rose

when the ramp were on expectations, bit Congrats of obviously, mean, strong XX about both I as think to entering we as the saw discussed the in different we little well have a guess, quarter. business. think, just versus expect you've thought sounds year the perspective, it. on just growth, months big has the first-half sustainability half internally I little ago investors some given as I at far it starting we a like the U.S. to how business Particularly where we of about second-half of year? than should where miraDry of near-term. 'XX the second slower you this from touch And now a I how a are a the we what's business ramp and the least and the in really wanted bit outperformed of how picture as were

Patrick Williams

Hey, it's yes. Patrick, Kyle,

that part is So I think the stability and thing the biggest today. is of candidly, made we announcement

to want the embraced for the to out a of to me patients in now we're on And you we take see to the to that, well. protocol this stability how things down we going to customers. with the the in move know, business sales it getting fully into we moving how message what permanent have some as physician we take we're out believe down, the work So consumer getting manager still starting forward. we Stability role, through force, be general our as nice over asset

We've miraDry I So investment a has a of think to a pretty learned it lot into been big business year by in see you're Sientra and a year. the the starting segment. benefit

going QX because to us a XX% it QX some Certainly, of over XXXX, we the it so I for you buy are when took and we grow follow, half to certainly year. second of not as much but we to comps this asset should on we move see to And easier continue it's as expect forward. go to did think be us in growth now. And perform nice

Kyle Rose

rollout relative And of but in fresh XX% is your then much bit of way, I early, of also just just force? Phase market? then miraDry of where you still and obviously, maybe in touched -- walk think, of rollout impact the little I and in a just the Jeff, base and sales stability you on U.S. that then the that is investments protocol in the that's us to XX% through way customer the aforementioned the an that the the Are to over how really the

Jeffrey Nugent

significant that's to answer a clever a fresh something basic The as quickly. has you in who significant organization the new in improvement patient of is that the people protocol when what that practitioners very of time the in that creative procedure, state protocol, to well have and for some the the in contrast inherited. our we miraDry rather moved compared experience, between example, is at and result among and the before made changes the as stark the And reduction to comparison in the software training overall it's significant timeframe treatment look

are So indicated, your professional the I but only represents not both place, that to on afternoon, a we've making question, as you the that the but grow and more that are the I of a things the experience those and think also this some consumables devices of hope difference based domestically we know, internationally, positive answering opportunity it I'm continues patient.

Patrick Williams

effort make We is was it. our I way that. importantly all huge base, all obviously, made all quick install entire new both protocol, that's the converted machines to but teaching domestically a and the sales protocol, it to internationally a teach we think is fresh sure the fresh answer have in force now to Maybe over

and not or new they of here outliers some may stubborn. we definitely have are to that seeing going you're going So to to that just the benefits get be But there protocol. you're

Kyle Rose

how the or quick in the in -- on months. I queue; push one guess, implants question guess made does XX you guess, in question to us you've know the a -- breast help sales months Do that understand growth like the different And with getting the know, just recon kind maybe we here, informed inclusion the color first more just it's now the over XX growth back on forward? business, business? more inventory are and cycle really push the implants? different different you should you getting but know, jump there. think I'll moving as business sales the us think about And you it's and look market, tenders of can Great. improvement we recon implant bigger trajectory one that as I how into inflection point accounts, I that going I of of I give you then on really to the far of your trajectory that contracts XX months channel, we're mean, have -- see on how recon little rate, and in side, any a past growth Are a XX about what big the an a into now you

Charles Huiner

last the our expander to side, four our breast see the And tissue the more acquired look quarters, that most of scale. growth portfolio business. we into recon Charlie. our that certainly in of constraint supply it. effort that because and being side, most certainly to got putting at And growth over in additional of Yes, this Kyle, is seen of I'll we're the into growth it, on talk this business portfolio. expander the the you we recon us is And on side if continue

the -- about national as do we onto who is we've ability get to in are have lead, your that account the a past, a our belief this talked hospital to driving give to question, contracts of side emphasis of some really driving our expand the that We're for and and of the of just to important sense effort in you business. business. team that the on the -- So side going

for open reconstruction, the then So land the we're breast the starts XXXX continue include his we in open side. starting hospital we've scale the additional the going That which side national ability on continue on of the to we accounts pretty supply also team continued to scale side continue on to side. again implants the both side. our is grow picture will side up and up contracts expand expander to more and what as provide the should expander believe near-term as to we on on consistent, been growth bigger to the drive But implant believe to more to

we scale about 'XX, the really good to our with breast implant should start about build we're inventory and on up reconstruction. as side to portfolio in of setting the more So we how drive continuing where we wrapping get up, feel scale to XXXX up as think side start growth implant and expander

Jeffrey Nugent

add would that say a continued of I derive show the is you are continue to starts is thing other product that to we other to does to superior but very have there's the institution-by-institution, in and fundamentals proud initiatives frankly in with that advantages moving medium through I'm combination opportunities growth this of to going offer category. our no still go to this the But have for reconstruction products one that authorization that dividends. which the superior long-term strong but is and that adjacency, think efforts to going it into And commitment, products I our

Kyle Rose

Thank Great. you taking the question. for

Operator

is our Leerink question you, Partners. Newitter Thank with next from Richard

open. line Your is

Unidentified Analyst

question market, Rich. are capsular [ph] you the A innovation and how best-in-class, in that's thinking quick Hey Jamie granted have not competitor about guys, contracture a center on claiming competition entering SLICE and rates trial yet. coming on for it's they're a so you on the guys

and rates collection data contraction on then center going the be innovation focus kind that the around and wondering is that? your focused rates of sorts these SLICE of this your of what's can capsular really Just much kind you rates to lower and how of get confidence revision in

Jeffrey Nugent

way. it answer this me Let

we've referring about of I Establishment think, you're the believe, first to are primarily Labs of amount of their the and been Motiva closely time following and a all, implanted. claims very long still related questions to been time. There are I have them validity they for

peer-review answered, is shows virtually the journal we contracture capsular that and in the So at significant advantages rupture there are article results an XX-year all And still and of least objective category, much which duplicate on forth period not questions attempting but is we our and been this the depends of so which that these rates, have same surpass. in length extended entry dimensions have the so on XX to be or new vivo. year see time to measured time, time over

to be criticizing think significant not comparison questions I'm improve to is are So as going I ultimate but there ours. continue to anyone, their still what while we

the So confident stand on initiative that's we attempt today that by to being peaked number the that short focused hope is that innovation answer, but it's answers to question. a in aggressive lead. very people, of a where a build so I is we're natural capitalistic the SLICE up society but continue where

Unidentified Analyst

helpful. growth, that's miraDry very sequential international placements both consumables U.S. And guess growth I Okay, and of guys in say placement. solid and the you in mean to pivoting I that then business, the course

So I a and a think I I way assume there going increase split. was is sense relative that that that quarter performance international know right XX-XX for sequential my strong is revenue Thanks towards in this about to can performance? and you internationally there taking the give it more in fair was guess us the was the questions. U.S. placements you to this of like on forward, QX given then just still to wondering said XX% skewed

Patrick Williams

Patrick. Yes. Thank you, it's

again interestingly right in were Jeff around QX a international prepared we his and So mentioned on bit enough XX-XX the comments. side little for

Japan. consumable did additional to the there utilization think really fact the which everybody do do the seeing up Japanese And physician able customers engaging, right right out that a was site, actually what our team the digital. those of as advertise Web distributors, start regulatory are we've bigger miraDry consumable directly is it one fact did lot I And in as their freed now up near-term proving of to on it is lot is want uptick markets sort we call it to utilization well with we're has some or to starting We an on market. the to see great, papers get that be markets that's to that of the to And official a the purchases. correlated bigger International on that our of in pick one approval that

that prior to there of through issues we've that stuffing, I there legacy did the were getting I battling us I good that through stuff. up again inventory picking been where and were there, everywhere. to really to once some started spike starting over purchasing U.S. think out we that saw and generally was the the hard so, consumables. get working think year, on some but company at think see last And some the And the we PDNs channel

performance. we're So very the pleased with overall

Unidentified Analyst

you're trying the Great. the ask just so And then if of or breast other being expanders, breast with out that how much Sientra I'm and one leading currently a I is implants of just implant I currently to getting Thanks. words a what on there without could additional here where induced. selling indicator in get are are used expanders question, of kind of curious kind the

Charles Huiner

for have last is what Yes, creating of doing to the this on and sort leveraging will into the begin infrastructure implant have really of two of indicator of contracts expanders, are that our do of with aggressive more hospitals. of Charlie. a and we've believe are full And that beginning demand that constraints our correlation some relationships along previous up to today been expander direct supply at expander with pick attests half Once this not a it's is at of the the their marketing on into of hospitals, that to hospital surgeons supply under with awareness sales reconstruction the and business. to breast implants XXXX three business There's a what flip our business more into cases the and with by happen can being beginning or the that the side much create do expanders, we implants a switch XXXX, years. we and we the the to we and consistent back-half as leading because doing and the mix living we question we have

So as and will constrain mode. on we we've back to we're making in But of strong course, happen. holding that that very that been supply been have push the begin confident comfortable

Unidentified Analyst

guys. taking for Thanks questions, my Great.

Operator

you. Thank

with question next Stifel. Jon is Our Block from

Your line is open.

Jon Block

Thanks. the that up get of days guys. two and to Good call the XXXX? me; Jeff, and manufacturing afternoon you parts plan how fully of do or Maybe early it, but discuss be, running early for that's as breasts, progressing, from you to can maybe ramp three expect we

Jeffrey Nugent

Thanks, Jon.

I for remember way you'll approval, of we part the I think quarter got believe, the the is second that best that very in first just to April. FDA explain it

able number the quarter predictable two-and-a-half show in to as we've good these So of that scale-up we not of to them. like making you been they've would a are times, have as the months They're experience see And as achieve. addressed to progress.

us as we're delivering to second-half. and most that also message is is And fourth said, going this the on see consistent that, the an that that optimistic into are quarter. clearly expanded we However, today moving the going give in supply ramp think we've we've to been I

XXXX paying where the not some begin attention to aggressive really we're market focused very think showing XXXX the making only we're more on results improvement. a in to products, can but breast on that that we share So also and close significant some real move growth make we

yields, the later have planning So without supply to values, things that continue overall second in getting nature, the confidence and into quarter. specifics improvements the into chain as get we of of we

Charles Huiner

if certainly two-and-a-half shot to this Jeff's follow-up, one what the confident to Vesta's we're we're we And this is the continued we've years, side, gone two get through very The can I have aware Charlie. that, Jon, right. to Again, reality scale-up. just commercial in is on point, given last

of of we've we some level account have almost supply over start amount to SKUs that the the years. approvals before know risk so is that doubled doubled rest stock-out. reality to team that up based market, really we've the And offer commercial two on that of And we last going we're the -- our the full we gotten opening the wants at the not

have opening inventory new right we on we're program really we allow but So the broader hit we that a disappoint the levels now before market going us maybe that is feel customers. to confident don't to really picture and to up accounts, run cetera, little et running, conservative, not aggressively want being and

is this this. to used have going. we think we're that given impatience the doing we given actually Maybe we the We've where we're reality a there's come over that and building. supply get we're So right. being little been in shot the get pretty word feel head as one the quarter to precision-controlled. mentioned, that we saying appropriate with But pace as from, much And that's couple these on aggressive are inventory what Jeff this fourth preparing, up, into based we past quarters. We're scaling consistent we year more of we've

Jon Block

that call customers. think Maybe to more that, very precision and XXX the to the on that I sort Okay, X,XXX X to X to Charlie. specific focused launch been I roughly in of last helpful, well? as alluded Jeff, some has tier follow-up completely or X. reside in believe predominantly as level tier tier selling was still that you a that's Are you guys there

Jeffrey Nugent

to that top that we're sales well tier, make on we're beginning as No, tier, but headcount primarily still as the we initiatives organization. add focused Products to second Breast to

and still guess best X to up of opening Jon, top that the on I way relationships the to the is it expansion. your some answer But those we're that to prepare put tier. for focused question, doors to us previous reopening is So simple tier

Jon Block

million a have I'll shift then sheet your then from follow-up decide Okay. the of a a on transition, offline. would million, balance and and lot of And get $XXX $XX love Patrick, thoughts me, not pivot. just cash and last to one CFOs injection,

you would we time, it's and guessing color helpful. love So, opportunity any thoughts. with I'm but your a miraDry, big an see be interesting

Patrick Williams

on been I'm that statements, the It's this was as obviously And the fact onboard a very the and make the excited support and to of money, I in of side I'm a teams giving for. did the Yes. said and raise. of of solid maybe time financial obviously of which two kind my new into years, in it a to raise We well-positioned here place. No, that it's guess, opportunity provided to to I coming and fell it. of year I I the Board, move grateful sure management in because wanted spread place my a the very almost and general three-quarters. me Jeff, wings think we're role where kind good

I've of that and go mouth my is miraDry. to had going or and at make side out try sort put to And my where money me. and that a I commercial think to something always to affect, operational go

be And I'm I balance walking I Allergan. So think for transition. near-term also we myself, in Sientra a the the I with then companies, and rest Paul of in ping entire to good of brings a nice for He's Sullivan going do going a sheet, as excited Keith is to benefit notably board still many it. out personally, have but be, and news And for situation team. I'm the with here history him to on, have with course still where member the But around think, the long to help notably a a the advising still to is Keith Board. certainly having

Jon Block

Thanks, guys. Okay.

Jeffrey Nugent

Jon. you, Thank

Operator

you. Thank

Cooley Our question Chris from next Stephens. with is

Your line is open.

Chris Cooley

taking appreciate And guess, the Good and foremost, welcome, afternoon. questions. And I Paul. I first congratulations guys you Patrick, and

seeing within thereafter. could existing capital you follow-up you're the both utilization just the here one outset, end, maybe this -- and I when about did between and Just consumables you And if characterize quick think But how here. on utilization practices I at those calls quickies at I Thanks. And then could a other you the apologize you two me front? there that juggling had of miraDry missed for offering? just detail couple trends

Patrick Williams

I continues this only get you've stronger surprised the U.S. calls, quarter, been did tell placements I details what pleasantly see And definitely into say, that the but We somewhat expected did miraDry. it. to then which side. for consumable we Patrick jumping was around did not here. sales international Yes, sure. system the I you also not increasing in were by but U.S. is Chris, the on know can we see on and

they what programs and more Zeltiq, seeing people we that a former and comfortable been we're we from launching. that like now with we're them away with, had accounts and of familiar staying companies, becoming I think For historically internally, we're but obviously the covered at are the track lot us

so think you I'll answered go question, one. I your I your let to on next

Chris Cooley

Natrelle? the at little appreciate talk could end the the warranty OPUS with now, But new there, a at more then you're opportunity for more up ASAPS, it to it you're production. much. of gears within interest towards just the as us a a see get you And skewed provider? say, users Okay. trying Is April. most for launched JNJ-oriented to from, greater new to on you are I'm coming the business existent especially where you getting breast so there capacity-constrained. about that switching line still that you the back for ramp just maybe is so maybe most offering Thanks the that where feel receptivity Or

Jeffrey Nugent

this And on I is seeing we're And think it Jeff. that is the way both Sure. best penetration to answer sides.

is that that got I get they year's at implants. approximately implanted rupture that X%. lowest have rate. more the in that comparison, As rate And to most response that advantages own a to that, number we over that the directly we XX-year disadvantages this is tell vivo to in comparative again, as and why surgeons our think I explain during of XX rate XX% And from that initiatives And very best when So it that published you of for indicates rupture to I with that's probably average being efficient "Safer." Does practice. one of a is that an that Mentor's actually indicated way data implant in out is this up that share we And an data picked PlatinumXX the study that the manufacturers. direct, highlighted the quarter, objective surgeons, put way rupture sense? most it. many XX% the the the such significantly, stands want comparative market among use that comes make five is can plastic would published which something warranty, the that's example, the we as I an from really insert had But

Chris Cooley

you. Yes, thank

Jeffrey Nugent

you. thank Okay,

Operator

you. Thank

Capital. next Our Craig-Hallum from with Alex Nowak is question

Your open. line is

Alex Nowak

aboard the amount new out of the the that question, back and the implant relaunch we side Just previous currently you inventory? really the on role. and but can Patrick, of and there we of going to on Welcome required Paul, really everyone. at, Jon's the afternoon timing Good before at follow-up if market? we're This can the the question pushing then business, any forecast of you congrats, XX% is way say can to the want quantify of inventory Great. where have hand into better we're

Jeffrey Nugent

Okay, Charlie I'll answer let that.

Charles Huiner

of of broader Yes, percentages, to be so I when little I we a been in don't business this that of you aggressiveness that only satisfy of will And couple brining that business of sufficient starts is during subset even our market. start to programs to core to quarter, that we and think ramp a guidance feel think of not think our fourth begin sort begin needs currently to of up give we're begin smaller but going as has users sales Sientra we'll what levels the bit ready well last to customers give but we users. years, the can open and terms back around the detailing, comfortable of think to got set and we believe happen really inventory where were we start the the that attacking as we've up new

believe we're we'll QX were for not inventory point where skews two risking we've be whatever by that a one reason got really on pattern or sufficient where we at it's levels. backward. So Where disappointing

recognize our And this little customer before, want open don't disappoint. right I at aggressive to our rather one-shot that a more we up that to As said be now, conservative base. more And a we'd levels begin is we bit really given and -- deal, QX, with existing inventory we in starting manage and be point.

Jeffrey Nugent

more that to There's to And one of progress add the precepts of environment. to Six is primary approach that and like that Sigma is making just-in-time. thing of one of that, concept I'd the a the we're

lot time reduces a of needs, what by of which prediction needs inventory, means. accurate and to and in the those bulk the but that more we're by the literally I just able companies, a other of meet industries said, is like characterized overall inventory Just-in-time

progress. yet, So we're that's chain there making supply but overall We're driving strategy. not our

Alex Nowak

docs? any really Sientra's from makes Are are getting asking quarter, understood, with to as pushback the going point? are the back And the inventory that the docs reps or what sense. surgeons out OPUS the using implants around you for the simply them are hearing Okay, now in again, you just this

Jeffrey Nugent

I getting can't say we're that pushback.

doing think combined and but much the people open commercial with but what immediacy order a philosophy, stronger end our second that team the the we're products, yet, our I you is direct actually our that be with our very they PSDs and a in and been direct tremendous sales what of know, has a we predicted we no the that when there just of by minimizes said, we PSCs, operating to part we're is of delivered on-time so customers. quarter. of of I the surgeons, our And that connection expect part want those, not disappointment a with be just-in-time that, where by to position got question on our being that job

Patrick Williams

Second-half.

Jeffrey Nugent

just second We finished quarter, me. so… Excuse Second-half.

Patrick Williams

the as answer, eagerly that's inventory want get to for we quickly short trying the as are them They to sure, it and can. we

Alex Nowak

pickup that market, finally, then, got started we quarter? the consumable drove I Minneapolis of how And to think the site miraDry campaigns traffic? you the has Patrick to ads the sort DTC Thank the it. real you. any know Okay, meaningful And quick, DTC the ads of and growth been hear just do in QX in the you do in response you just any seeing are in Web think

Patrick Williams

it go hurt will sure it. backwards; I'm I didn't

the I I say think some we all that to a what more at obviously markets, expand just and beginning on of so think direct-to-consumer. Yes, markets. select will I would we're stages in as nationwide we DTC lift of are look basis, still

your not question work, still only traffic definitely couple locator. the we but we itself side, like of in We've our but -- position a all Web definitely things, site probably of on are on bit and they and is out track little feeling to just app, spikes our Google seen We it alerted of it's that. things resonating; increased trends did can

link cognitive come. be we can to will be yes, able But the utilization for of do of us will something and for in we once to out the effect, that marketing to utilization sort is We think are or we be be device working two-way a better that track it, I field. there Fresh get together through factor able the Connect to which in out tool able a but actual will have field, the trying that's R&D And a pipeline. to are that, will we get if new sure. in good the That which ways be couple to our to connectivity

Alex Nowak

quarter. nice All right, thank you. Nice job on a very

Patrick Williams

Yes, thank you.

Jeffrey Nugent

very much. you Thank

Operator

you. Thank

Our with next is from question Anthony Maxim Vendetti Group.

Your line is open.

Anthony Vendetti

Thanks.

calls, been to revenues then, this, I gross between And continues or of this systems grow know, the do approaching quarter gave back-half XX% and to miraDry jumping also here if number I of margin? base? how the have As sold that current of towards potentially you install miraDry impact as don't we expect move the you

Patrick Williams

we say, We would did for on the didn't an And XX% about to we on would sales. give and expect system, are quarter, also year, as We did be to increase about Once in of the XX% some of traction our of see said XX-XX second-half consumable. I first-half. seeing then our been U.S. we the a talk so the closer strong sales It's for consumables, it. we gave again, worldwide now right from about in the we year that to numbers color that. didn't strong specific We it some would around expect second-half come

plays see have to we how So that out. will

your your I of first what think I question was… blanked on part out

Anthony Vendetti

The greater impact first part, margin miraDry… from gross

Patrick Williams

Sure. Yes.

are we breast call our would So obviously I of still easing XX% -- the us. business business, product is two-thirds, still

international, margin, have so, as lower which the obviously And happening they margin. gross as systems is pricing got mix very saw wholesale gross with solid plus. XX% is more Right you of now well a a which what's miraDry

a miraDry to historical that We just places is pressure, mix start over got get the in really from to going flip hope we and be to that some of itself. capital to mix utilization. XX% would pressure We know that's So And happen. see model that's there then the that consumable. time, can XX% definitely

got well. that and are there, XX% won't is the consolidated on some med new over believe but too the number we think of predicated Paul get working we much mix, So I in -- sign that see as I in taken obviously, a has cost basis, everyone I can wants on here, goods on do but over CFO, again to things device once that but so him time think up we we for

Anthony Vendetti

Thank Okay, you. great.

Jeffrey Nugent

Thank you.

Operator

you. Thank

Margaret question next is Blair. William Kaczor with Our from

Your line is open.

Unidentified Analyst

for for taking [ph] Anna questions. is Thanks this on guys, Hi, my Margaret.

what In to wanted in on Thanks. of field? and what ramping, of the how the done brought miraDry are drugs, they the these miraDry, targeting ask new initial have that of I terms sales just kind is for reps you tenure average

Patrick Williams

Sure.

two will of with capital side So, I kind start the questions, of it.

them of say on reps would we would are capital I and here see companies from capital not get sort aesthetics side, do the So, that getting we classic there; there. you out the

that do of took QX, in just a company, up -- good believe and quality someone one strong was a what questions QX, of think off with forward. is some didn't we back first think very a good when attracting 'XX. QX asked, do that over move it go the I I some came our QX think throw and to the better -- and you first have we we We we reps start our as we will I

so up a training, these of to say six lot of right We of a are do would quarters folks tenure, months, now couple and obviously to to on speed. I So get expecting in are terms a solid take we focused that.

are supporting of have classic around would the had are get to the side, seasoned the the we started would we things more around And attracting the thing more it's of our PDM are just time really good, sort actually familiar more that market. As say, Keith And think was consumable within would the But we never person probably see just we at how with the that doing a to to record that and to on benefits quarter. a of that that reps, somewhere hands is I aesthetic space, you on then up we ramp what here on excited of and the miraDry. we that. I they practices of I to the think expect PDM are that which I I about starting events it sitting on that to better digitally, us to recently that quite side, got helping of we market did the the -- doing but off speaks one do practices getting be -- aesthetic think pretty then get are and better reduced down that the capital that. we able folks the And level track on a side doing when

Unidentified Analyst

just side and bit, you then And know on you. Thank but those with have -- Thanks. talked board? kind on called are how helpful. this I a have the X the all say in would successfully successfully reengaging back about you terms those that's breast many little you Tier customers, Okay, bit, little you bring of of of for a

Patrick Williams

Yes.

So And an say from we've as talked Within our are to good of those about XXX, it's XXX XXX we X would a Tier sort I business of customers. those. percentage XX-XX. XX%-XX% getting of

is strategy So continue the grow. our right service again, to to now and reps with

revenue that Of really of but our business to only revenues. course the up to we not overall we -- of XX%-XX%, historically also at XXX-XXX. that of look peak, if were are our where of believe back even customers to more getting that XX% you begin on get And group that XXX

business so to period, two-year it our good and feel feel good been group. the and even right users them customers steady even have we able Sientra group our from this tier of through focus that top harvest now, of ability frankly, that, or XXX to core about being ability, business additional that the from we surgeons, top call drive So and about on very then our either pretty

Unidentified Analyst

as congrats and thanks, on Patrick. new Okay, the well, role

Patrick Williams

you. Thank

Jeffrey Nugent

Margaret? all you. else, very you Thank much. Anything Thank

Operator

call would to I any like back for you. the remarks. further to over Jeffrey Thank turn Nugent

Jeffrey Nugent

No.

we dialed we that have as thoughtful all they gave questions us. information in I and think appreciate shared as much those can today. I who

appreciate support we informed and I as you again, forward interest to the look and we keeping Sientra, in can. as So

So, good much. evening, a you have and very thank

Operator

you conclude gentlemen, Everyone participating have a thank great today's today's does may conference. and day. disconnect. This all you and for Ladies program, in

Sientra (SIENQ) 7 Aug 182018 Q2 Earnings call transcript