SIEN - Earnings call transcript Q4 2021

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

Operator

Hello. Thank you for standing by and welcome to the Sientra Fourth Quarter and Full Year 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. [Operator Instructions] Please be advised that today's conference may be recorded. [Operator Instructions] I would now like to hand the conference over to your speaker today, Oliver Bennett. ahead. go Please

Oliver Bennett

today, Good United quarter operator. I welcome the within our to like are statements Thank forward-looking securities considered full afternoon laws. year fourth statements remarks in that and remind meaning call. will XXXX Sientra include to that of you, the everyone and we States earnings would conference

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

SEC over Ron that Ron? strategy, on future call and have important accessible affect any in with based company, update turn annual forward-looking information to uses Chief and are investors. contained from to A management's or company's or note is Officer; business, call events to the the Relations Investor no discussion Sientra's quarterly information undertakes that the Officer. Investor in be we other Sientra on www.sientra.com. Sientra's trends, XXXX Chief statements the on and estimate, and to website materially on its and of The will to Sientra Financial statement. December is the current statements. routinely previously the Actual our is uncertainties Forward-looking expectations Ron. now the Form or Schmidt, on at also sec.gov. posted about on performance. website that at President filed forward-looking the year may its Andy and Today I company be projection which and or ended company's Executive Menezes, its Form website deemed material differ and the Relations like results information XX-Q company's XX, about filed I publish would available faces of may including Financial and operations review for financial assumptions company obligation detailed XX-K implied may reports report by expressed those and the risks to

Ron Menezes

commitment to for million surgeons, surgeons on breast three and total to one, plastic and hospitals. the competition. US of breast choice fiscal targeted to Sientra's strategies decision year We bring investing position goal focusing in the identifying, of $XX accelerated executing to accelerating practices on our augmentation plastic at commercial products Sientra by as a increase growth. an shed market market business revenue year from to taking share in surgery nearly was plastic for performance to surgery of Total fastest XXXX Sientra. expansion company was XX% for reconstruction with and that of compared a $XX.X and a plastic record brought total consecutive breast has million sustainable revenue and augmentation QX increase implant US year everyone. XXXX hello long-term record XXXX the to transformational performance. in We quarters the doubled million, growing had the both fiscal for as beyond accelerated in Sientra revenue The three, number non-strategic gain surgery year This set technology and the started of gains for QX our running focus compared plastic foundation for Oliver, Thanks, with XXXX XXXX. separated when two, became share action growth, surgery our six advancing superior and and $XX.X over the market in reconstruction; assets; and XX%. market and XXXX, innovation key partner our a areas;

which continued in in XXXX. market since to nearly rapidly share reconstruction has augmentation both result a Sientra XXXX, gain As doubled and

than our more Our well extremely and continue of in existing XX% revenue XXXX. perform accounts drove to

the them this accounts in in with in decision the market. also reflecting We addressing early segment focus the New XX% a area, than as accounts indicator reconstruction profile. to quarter year of of of on leading more the added our our served long-term growth fourth very XXX important

we're As see we account, significant a a volumes. sales reconstruction reminder, typically bringing four six takes when before months it new to

Sientra's in accretive expect be accounts top line to growth So XXXX new and these we to beyond.

result We continue marketing to drive patient on that training in events initiatives surgeons. participating pull-through high unique, through demand direct-to-consumer including

a reconstruction best important was Breast versus bit resulting look for little quarter again our growing business. specific for more year by in XX% of ever our in let's year-over-year driver with Now full market. an the growth sales and the reconstruction XXXX, once the XX% year

to address while at to higher of research expander hospital decision actually XXX-degree traditional clinical margins While market is share. reconstruction options. by benefits surgeon allowing access, TAV our market greater of key share in and actually market. week the in the we in product our declined support exited market another in share products Early XXXX, critical tissue version the for versus X% our options. additional reconstruction new This more a a the and market our increased sixth for This is restrictions, X-tab long-term almost for with Dermaspan expander also Dermaspan portfolio estimated growth our goal, initiatives estimates XXXX, tissue market of increase us hospital on the In great into X% last version Dermaspan providing further to we our all support provides reconstruction, overall supports orientation its leveraging to contracts. our XXXX XX% fixation to us placement the contracts. this need to our bring the GPO year an of Dermaspan launched of profitability support and to data due made focus due high hospital

later We the to important addition kind with also XXX(k) for dual-port expander only anticipated will and this year. expander an and be recently reconstruction tissue market. in patients tissue MRI-compatible the and of US a surgeons available in PRO its first submitted We next-generation be application for believe the launch AlloxX an with this

from market in this We expect stronger XXXX. even upside

our We already to interstate sales of drive to to an portfolio. have leading continue force demand expansion started reconstruction

fourth more American the Society plus this grew to the performed Society the in up Sientra end of and the top highest XX% plastic indicates Aesthetic high Plastic Market XXXX of with to turning revenue generators by one research According remained one market surgeons data and procedures remains and XX% augmentation the market for quarter, Now position Surgeons, awareness the the for we outperform all-time them. growing from the than augmentation us breast of rate And for in versus the our increasing market. approximately versus through position an augmentation building to continued full year product XXXX. Demand XX% strong first, augmentation and profile. category breast XXXX share. specifically to advantages, both marketing years, sales increasing support towards and on of the consumer consumerization highest double key in and two our shift our putting most XX%. year-over-year drivers We'll of the and the following: at The loyalty in number all resulting XX% also the success brands. past growth two and over over the in safety business the year our unmatched were

We continue to the consumer. directly to market

preference have had surgeon sent XXX,XXX partners. through than to choice. market We over research, surgeon website the our We the visits referral seen does our programs, and influence impact our implant consumer of more XX,XXX

of on of predictability making Mass the surgery. further. aesthetics is has fat almost the and and And augment Sientra's have are our last that in in advance making a for of retention a surgeons by collateral safety impact the our novel use patients. program. a performance. of and announced very October safety centric among surgeons. reconstruction we and put to innovative The January further revenue Sientra broader as Hospital. utilizing complications clearly we acquisition at Safety into second of out top unmatched requires choice a profile with very by Xth, transparency focused expand success our on The of XX-year General the the our place proven highlight other XXXX fat Warranty the physician brand the among developed unrivaled own game grafting we provide product now Program The customers proud on I'm remains our is warning This superior product where manufacturers, based to among transformative rolling driving box we're Aesthetics finally, for future XX% coupled clinically plastic On brand to to This initial addition reporting fat a a plastic XXXX. of patients loyalty included body. is and fat even in FDA used surgeries in To They TAM and message leading PlatinumXX the to our opportunity the a portfolio exciting seeking changer been the present an education breast positive breast researchers of grafting we Sientra's it AuraGen thing in benefits patient's and profile. cornerstone group diversified areas technology program goal product did, driver grafting. technology started advertising a safety company fat

fat We and predictability fat Longer-term, including additional expanded augmentation grafting retention ease-of-use for of into applications, unique augmentation. and opportunity face, to properties. the also hands aesthetic we expand expect use significant gluteal and plan to due its

and with expansion, the to commercial Additionally, of highlight is R&D Dajles into the for will AuraGen we prepare planning we distribution Diego, the briefly approval be the our in of team international pipeline. quarter to product Denise in the to where launch & leading April host Day East Middle in entered Vice first And Regulatory, clinical while in in our validate Canada, XXX-patient for those XX, breast, our XXXX. R&D new partners we further Senior plan our President agreements system a a study China markets. first benefits of San on preparation On in have

expect of closing, in superior horizon. catalysts -- behind the share for look of clinically expansion. augmentation. number expand we'll markets the in we Our In have strong with OUS to to both many on right continue continues in the and portfolio XXXX, strategically continue number In momentum interest a right markets, generate accounts to to us, we partners for market our reconstruction exciting and the

profitability optimizing grafting company, full our on platform. the growing focused of our by further future towards We a and expense. into Sientra new in topline transforming full XXXX plan are We and fuel products by potential aesthetics leveraging to existing our driving fat

within that the track I'll confident over to double call revenue I'm With next the three ahead, to turn that we're Looking years. on Andy.

Andy Schmidt

QX for $XX million performance. gross compared XXXX in our entire of product margins center increase QX to compared million margins brings running cost quarters with was was $XX.X to our the we QX million XX%. key XXXX, Similar reducing six total $XX.X which Ron. for QX The which million of mix. $XX.X as expected XXXX margin in revenue fiscal stability line channel Gross driven posted to the three fiscal an XXXX. of to financial an experienced revenue as of revenues XXXX of XX%. for record is across revenue was product lower our revenue consistent experience space. transition surgery than QX which price year results. QX first by plastic recorded Total expenses to by results augmentation move QX XXXX our quarters as driver consecutive for Thanks our of record gross distribution Considering XXXX to and XXXX, XX.X% product Sientra continues We Sientra and performance. margins gross reconstruction has two QX. approximately percentage is throughout Consistent points related in of increase

million for million. Okay, above XXXX to $XX range to with year was XXXX operating compared beat. as of a from loss as for period. Total XXXX is expense our year incremental XXXX. fiscal guidance Total compared compared expense. $XX guidance XXXX XXXX expense million as plus $XX.X million to GAAP million, Total was for XXXX. for loss million. the increase from $XX.X expense Switching sheet to year our million EBITDA XX, operations of Total for a operations This shipping operating to XXXX. on loss $XX.X XXXX revenue operating was compared XX, December EBITDA QX The a The which $XX.X continuing Adjusted was compares as QX now December $X.X million $XX.X expense is $XX.X loss used QX of balance of the to balance $XX.X consensus a million million loss total QX for loss with was our of $XX.X switching million operating a key QX $X.X Adjusted to to was a with slight million loss $X XXXX million. XXXX. compared of QX ended cash $XX.X to $XX operations items. We year-to-date a in XXXX as loss of XXXX. in balance $XX.X million million continuing in to was for associated previous million attributed the flat cash period

increase delay an statements. in was However, customer that receivable million attributed in accounts ERP the $XX.X in due our which XXXX systems caused in delivery amount increasing and QX of sales of to to transition

of in accounts We recapture that XXXX. to much receivable expect increase in

address growing inventories approximately approximately million sales $XX Total consignment million also significant We increasing reconstruction debt year-end. total approximately shares to by inventory. increased and totaled XX, that XXXX December business to on and $XX.X in million includes XXXX, at XX support our outstanding shares was

Turning to guidance XXXX. for

plastic million of to to compared expect the of growth XX% XXXX. to XX% $XX revenue the range call $XX.X We reflecting million, of back to surgery I'll in At this point, turn sales million Ron. in $XX

Ron Menezes

Thanks, Andy.

the questions. for call We will Operator? now open

Oliver Bennett

approved submission go Canada. I'm I'm excited, we're checking be supposed our excited before report Q&A, Actually you're just implants quickly a to And very text call, Health glanced. but not in we in or when to to Canada messages that very I

Canada is in off hot This our excited. just literally Health approved be very very, Canada. the implants that to press So marketed

for be more the specifics. for up We'll with to glad we'll very share that, now So that. Q&A. excited open call But

Operator

Thank comes from Block you. first Instructions] Our [Operator Jon with question Stifel.

You with question. may proceed your

Unidentified Analyst

be maybe Hey, the This the gains still we should Ron, for both to context that If the market about? we thinking XX% for share of kind stepping kind share with should start XX% guidance, expect accelerated and growth is in how guys. talked of also and Tom I recon growth. questions. Jon. Thanks expecting both between can about of off the you've gains aug, you're on

Ron Menezes

Yes.

at expect versus is, at all-time XXXX. market in we're past we as augmentation, So, high shared our now looking the -- I the for

will be was low which market single what a growth, it is doing the before single, COVID. So digit exactly

the down we X% was quite So XXXX. for reconstruction, And XXXX of we market reconstruction a expect in the in that. expect acceleration because actually versus market bit, share

next in teens our to share. be upper continued here to expect augmentation mid-teens will I should but to expectation seen year And For XX%, of the no XX as well. close this Recon, share growth, XX to months. don't down. we're have beginning number, which growth at accelerate a we the share in continued specific of a so well the growth the we slowing have as growth, continue

Unidentified Analyst

million. just do That's maybe into you for then, couple for on we quarterly a guys. just maybe feel the range revenue also the Got There quarter, about of maybe we lower, cadence, line, kind helpful. of in I thinking on bit a the year was below should elevated XXXX, there? was and Then that margins, shipping of still sight out the that year? $XX kind OpEx, but for some think it. And if it help XXXX, or can good you gross XX% there, line at OpEx Andy, how a about full in can high basic Thanks, extrapolate us moving be level,

Andy Schmidt

Sure.

with start margins. gross the part I'll So first on

first experienced distribution basically little we're of some That been feel. subject expect reconstruction brings costs in we As us business. to high the possibly When mix at Being product our I consistently going into money. Ron the expense incentivized of QX. QX. has QX, expense to in bit to as noted, alone really a the center, it's we going that of communicating, to be XXs really that mix. we to QX, 'XX, conservative, which highly optimizing We product motivated look and we're build see continue And half dynamic

is just sales get really optimized terms product 'XX of our half back having the in terms their of of in operations. not So where but we mix

that. we strong So very feel still about

QX. in performance. milestones very, hit shipping we was that marketing accelerators plans. carry sales In in outbound Likewise very QX expense positive elevated very customers, unique terms in to and OpEx, op expense, our and terms the way, revenue a so some terms very line of that great of in of Again in strong we commission

pay so that's out. for a expense that was a specialized very QX to strong And happy quarter. It very

we look we XXXX to of were OpEx. in you XXXX XXXX, As if consider at terms year-over-year, flat

marketing. We've increase a in sales going investing be net and consistently to that XXXX in be OpEx. communicating to in expect and We that's been

with expect opportunity board, and on in sure want incrementally We opportunities the R&D the to tools new and Denise sit to so terms we We of launch on. to actually increase deliver. she in also product has make

going in of going be to that's XXXX. at in launch $X 'XX. to year-over-year the great. purchase of be down That's to were which a be probably will to the worth add. an be flat to said, part possible AuraGen, Another launch And we add XXXX, it's XXXX where net going about expect be million flat we've a G&A, or is We prep

the speak in in in high-class revenue would We million would investment in a to preparation. doing of problem That anticipation or expect of flat and that be exception be it be QX cresting with we down in Sarbanes-Oxley that to possible XXXX. and $XXX so

So those items are play. the in different

which specific expect talk range in in it we I for announcement, of course will will guidance non-GAAP be will terms our guidance using up in operating more We to be building this May very say QX of expense. OpEx. But –

in expense Our million. $XX was non-GAAP XXXX operating

pursue importantly having top that but be also on terms how market, both projects terms look we we Again, So range operate. is at in the are we're the how expect R&D. based said in in to in a will we that a of the of I million. terms There of of QX of number look until terms time insurance we're of meetings provide reason IT line on where waiting will larger terms we what $XX in different going typical most to why we side

at to for that's one going or another. and XXXX basically that we're plan drive way So OpEx looking

tuned stay that for OpEx May in So items. specific

Unidentified Analyst

Thanks, great. That was Andy. Thanks, Ron.

Operator

Thank you.

Kaczor with Margaret Blair. William from comes next Our question

You may proceed with your question.

Maggie Boeye

on today. is This Maggie Boeye guys. Margaret for Hey,

Ron Menezes

you Hi, doing? how

Maggie Boeye

Good. Thanks.

give you've the trends the see first wanted that we're into what an idea fact of the to expect you guys quarter? through been quarter, I you if the so second continue could given how that seeing far? And us Just to mostly

Ron Menezes

the Long January. in York field Hey, Maggie New Island was I in in

what of November a very in In reconstruction lot we the busy met saw of meaning a fact beginning in lot with surgeons. They December, I were surgeries.

have last a of of to minute cancel morning tested However of surgery. the lot patients they the positive because Omicron

So very in quarter. happening like for February. and just January the of seeing saw was and December we're November part also a what in everything Recon strong latter else But we

down slow anything So we we expect come didn't Recon to Augmentation, back. the to augmentation. see

QX QX higher seasonality, However, keep we seasonality, that and quarters in mind QX QX from same. and quarters usually expect from and the lower and are the the

Maggie Boeye

Got building And of just asked it. Thank to continuing you. expand helpful. kind That's question you I'm about the on previous share. your market guys

So and the you've quickly. augmentation pretty seen both share recon the expand

all particularly augmentation ensure market can at the with on market the sustainable just momentum So of and your within do share momentum capitalize Thank that you how levels? you. you grow

Ron Menezes

things customers accelerate existing was from to a to made a lot our we the since to majority of easier a growth a XX% lot in customers, existing is coming about XX, XX, than do decision coming how share go share XX It's One customers. the existing focus is within QX from of from the XX from car to we XX. X

starting other ability that those utilization, we to we surges Sientra We're that leveraging programs and marketing done. a some bring we've Sientra uses the attend to that products that back those initiatives to the Academy of have buy programs. lot and a and double expand ways from of a lot So find to the customers projects down of surgeon to and going saw current great for expand that of

we So saw. thing that's something

existing to investment can not new So is, new to but customers. accelerate it's still a faster this on getting current that's adding We there's continue We're going our return customers a augmentation. stop year to focus an for much on add customers, customers. on plan

Maggie Boeye

much. Thanks it. Got so

Operator

you. Thank

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

may proceed your You with question.

Connor Stevenson

about the of to going everyone. come how XX% on Good gaining to that on existing This evening, share is is for think Great. XXXX, I growth to great first accounts? much Connor opposed growth accounts quarter. guess Alex. in when XX% in Congrats we as from new off that

Ron Menezes

from come new Recon accounts I both very will would saw on in I change. continue accounts see Yeah. will add seen year this and recon. based that expect don't to still successful say to but we XX% existing from what XXXX. that changing don't augmentation we've I

Connor Stevenson

Sure.

And FDA helpful. there then changes That's Okay. at regarding labeling. some the were

prepared spoke larger where but on stand review your remarks, you during the sizes process? other the updates the You any in can regulatory on give on that environment

Ron Menezes

changes Yeah. profile. the we're Sientra of very things for safety positive are of very one our Those is proud because

look the if you one, you not If to ruptures of look the the our compared one the across we if one. implants or data competition, of lowest at XX-year at have lowest capsule contractors, risk linking

the look kind looks support time very we that to comfortable our at implants disclosure sizes, their the so something same of Large in conversations the FDA have we're competition, right the and clear in to versus full unrivaled So when the to changes any we safety future. At FDA of recommendation with support now patient risk. somebody those the are forward that our is with changes. we'll very share

Unidentified Analyst

Great.

you. Sounds good. Thank

Operator

Thank you.

with Stephens. comes next Cooley Chris Our from question

You may your proceed with question.

Chris Cooley

and as two afternoon, just this me Canada questions. a by year, on was well for taking Health point. the record thanks Maybe at just way congratulations and approval Good the now. That for the

we see more the that help a full kind a still about result, like it follow-up. little this bit just second if got XXXX, seasonality? a with you the the -- half just sounds little the number momentum a you as I'm year-over-year quick with correctly? recon, more about that acceleration gating bit prior but just, the think EBITDA the that you're aug seasonality And the half? just then the aug side in more adjusted of, help second can us historical little a first does and normalization us saw a in in have the And about half I XXXX for think as an bit different? So But that you that going can thinking we referenced loading we coupled about into on do Is too growth a year and flattish of in we about question. talking know think I've

Andy Schmidt

on me let So start one. this

how out XX% about in first As is follows the half, equal second you out second comeback What recon. point interesting plays half, in would see The half. XXXX be half to expect going to we be to what's the to maybe is it XX% see typical going patterns. bottom really first

Ron are However, QX has before quarters. and QX weakest our mentioned as

And so if the of XX%, QX consider basically would quarters you picked total up balance all four and we and perhaps QX as this XX% at being in view QX no the at time with seasonality, QX.

Chris Cooley

Okay. that? Thank market through you. calendar particular guess -- more growth think And you conjunction how then at that you defensible just implant from there from Thanks as in well-above XXXX. well or again there's term contract perspective being you maybe think maybe XXXX? at record bit the can little just of coming year, both reconstructive you're and all with into on an in in obviously, how a you how that year. the elaborate as do the to modified on congrats loyalty the if just able help what barriers, competitive similarly you in program have that's sustain here much a I from side type early Could on to do longer expected so year-end just physician And additional entrants Can as expander speak around perspective? we or

Ron Menezes

hospital The is stated Chris. thing great is about contract. a as Thanks the three-year

is your Pro this data. one and in that is -- Expander also to as that tissue Tissue to So look -- now data -- clinical to this data add more year for hospitals on We have hospitals? in our ability a What provide well. the expander it case that. thing clinical of publications our really critical clinical more AlloXX blocks and one and tune We implants coming and out it

XXXX. So their because the contract. to that, entering would their them, have know. three-year maybe in if don't want I that clarity talking any entering. that on we don't competitor really coming I'll competitor expander, you're tissue what And you ask think they're have a question I project is I about to ask

that effective. the augmentation those for have kind it. we And be more the So of program From protects loyalty we very surgeons, that programs the programs to the in is side. felt are

year, XX% Our marketing ones adding had expanding were test team matter those programs. last only of to A one-time doing them an which more. see our of pressured fact job, surgeons work. in XX% outstanding We

customers. any Now But see and close you from more more again, current that existing in XX% acceleration and possible an share to And we keep competitors ones. we us I state, than mind, have XX% with in have protects share new why that's did augmentation.

go. We have the of market XX% to

very main here competing with. So months. the the forward from take we're That's giants to to excited and the share continue next away two XX my focus move XX in next months and

Chris Cooley

you. Thank

Operator

Thank Vendetti next [Operator question Our Instructions] Maxim. you. from Anthony comes with

You your with may proceed question.

Anthony Vendetti

distributor? How to there that. color ramping in be of going Are you little plan in XXXX? going your think Where since know there? a press do you go to have implants, direct a Yes. you a place? you news sales bit Thanks. said up basically early -- it's around do force could maybe you Just are you I the Is a is just the approving be hot that off the about do contribution but force? Canada Health to

Ron Menezes

well Yes. Anthony, we're set to go.

distributor-light send as reimburse the of obviously, we for of to call It's us amount where And sell, they'll there going to to the we approach, maybe month a that's told so money. team ready roll are they're for ready. what you to have They they We help go. be consignment. fantastic We're us it a up approval. products out. ago, waiting We going

the a going we contribution year. really start rest we'll are the build on the total have nice the expect probably Andy, competitors from slowly. contribution But second there latter the you color the So ones There little a to building give in same into we're two we're US. more And international. to major XXXX, part of of but competing quarter the in

Andy Schmidt

Sure.

we're aware, in all Japan. obviously, as are So

in we're Canada. Now

total we If you build Rico, early starting will foothold starting builds as of basically, said, Puerto when launch guidance QX. the with And accounts, earliest even new in but future. revenue we're nice you again, is it's And contributor. Ron layer in it's small, go a be a this as X% going it us. But for is XXXX. it's that under consider our to Canada for

Anthony Vendetti

just of quick then follow-ups. a And Great. Okay. couple

In terms remarks. of sales direct terms the on by feet that just And street now? during in XXXX? end force of a Can right I us you expansion, prepared you of is goal made the what's comment your where remind the think

Ron Menezes

such States Yes. performance current found help. at year. need our this in representatives more we We obviously We beginning states XX as total the of the some had United in California, with Florida

in added went we three And us from XX So, were reconstruction -- managers. We more three XX. divide called what added our half. of to XX the PSCs some we then more -- territories

cover have of So keep we aug. PSCs to reasons country. have the call now because reconstruction plastic big obvious and the reconstruction. four in the them But the cover out on that whole both focus of XX%-plus both seven and and our for augmentation to both We country mind recon as whole that surgeons there

them both. they So, call

years So, in expand in in because the reasons as International into the we have and also next the goals to get to two-plus addition Director that's total its as additions about well. China of XX markets continue to

Anthony Vendetti

is last said, you that X% the Okay. Market And up just the then from last verification. quarter? XX% share

Ron Menezes

reconstruction. we of year. total, close From almost to are at XXXX we -- the for to XX% actually last XX% the X% end augmentation, last now almost Within

Anthony Vendetti

Appreciate perfect. you all. it. Okay, Thank

Operator

at back time. over this now not showing to I remarks. would any further turn for you. Menezes Ron Thank to any further call like the And questions I'm

Ron Menezes

our joining Well, hope call months' XXXX. wonderful first safe thanks everyone I thank from a everyone. look us and being but to you -- quarter for now, sometime and have I forward two

Operator

Thank you for today's conference participating. This Thank concludes call. you.

You now may disconnect.

Sientra (SIENQ) 23 Mar 222021 Q4 Earnings call transcript