Earnings call transcript Q1 2023

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Operator

Good afternoon, everybody. And welcome to Sientra’s First Quarter 2023 Financial Results Conference Call. My name is Eric. At this time, all participants will be in a listen-only mode. After the Sientra executives provide their business updates, there will be a question-and-answer session. reminder, call a being As Instructions] today’s is conference recorded. [Operator Instructions] [Operator

like I’d Bennett, conference over Officer. Sientra’s turn to the Legal may now you and Mr. to Compliance your Bennett, Development Corporate begin. Chief host, Oliver

Oliver Bennett

you good Thank and afternoon.

join pleased On Andy call results. to on are and and today, call Officer. Sientra’s we first We Chief Menezes, us XXXX Chief Sientra’s Officer; Sientra’s President quarter today’s Schmidt, Financial could you financial our discuss have Ron Executive

continued has its record As we Sientra reported record earlier consecutive XX growth. of unbroken quarters today, of year-over-year

reducing we expenses continued this Importantly, product achieved revenue have and efficiencies increasing growth additions. through while leverage also our our synergistic and operational

We cash that improvement have record over of translating three time million low quarters period. year-over-year flow same now free into had consecutive usage, a $XX.X

seen or in $X.X improved our performance, non-GAAP We improvements quarters. million in year-over-year EBITDA by XX% have which similar nearly three the past has

describe share management combined call, breakeven As the our the Andy and run us rate confidence market gives our will with reach that this we by continued cash Ron year. of will growth, flow during disciplined revenue end and cost

turn remarks statements I questions we in must that remind include the our ask. response may Andy, you to remarks call everyone and Before Ron forward-looking and prepared in I any our will in today, over to

trends. events forward-looking statements These are based assumptions and and on of future current expectations management’s

forward-looking statements. results from or materially those by differ Our the may in actual expressed implied

statement. obligation to undertakes no review estimate, or The or company any projection update forward-looking

XX-K XX-Q be month the our uncertainties, would detailed company’s For this refer of and Form available you discussion to to Form filings, our website. a SEC I later on the risks company’s filed including more and

to our President I’ll Officer, Executive first results. comment ask quarter that, Chief and With on exemplary our Ron,

Ron Menezes

Thank you, everyone. hello, Oliver, and

the continued clear leverage, continue results to efficiencies sustainable pursuing on our to prioritize healthy, success profitability. to to path market creating providing growth. adapt a We’ll from are ever-changing and operating focused ability Our and

us enabled high-margin Sientra’s platform to high-growth, streamline resources surgery business. plastic has all-inclusive Our towards

indicating solid a to ago, We prospects. our value to and long-term that have capitalize Two top new first close devise this made the accounts management and achieve years goal. to reconstruction priority in alone, the growth on team half XXXX of XXX plan the Sientra of quarter a

already portfolio products, a fifth platform the and implant SimpliDerm, AlloXX, has reconstruction fat Sientra clinical Dermaspan but worth most including we compelling had adding a After impressive support transfer lacked of industry. tissue an of now decade’s soft and data, generation the with products. unparalleled and Sientra in Viality

penetrate significant moat new for This against accelerate develop compete. presence. not only and easy was time build a establish to allowed us the this competitors a but not task. difficult making Sientra, for has and this an surgeons it also resources environment, requires the create enter relationships brand It to Achieving strong portfolio, the with and channel, to hospital hospital market

on that run we end driving focus sight flow of profitable shows growth, promoting clear any cash rate to line reconstruction cost, growth XXXX. of but Our are at breakeven the we by creating are not

launch U.S. procedure without The our existing portfolio Sientra’s significant utilize SimpliDerm and addressable of to fat per than synergistic, has and total price opportunity market are infrastructure the given our to more incremental products. ADM Reconstruction use revenue cases represent highly us investments. the of doubled in products addition the allowing sales Those distribution of Viality, a product multiple commercial the with higher points combined transfer our

advance to operating By complementary to our other and additional Our platform adding while leverage and -- going growth profitability. will continue and overall advancing market expect forward. we to companies accelerate products our pathway products, partnerships these share strategic increasing attract and with gains

study. in six-year data In of Meeting the released we April, Annual post-approval Miami, at Aesthetic our interim Society

more and to than handpicked continues data demonstrate best rather populations patients across more sites XX,XXX our surgical than implants procedures over results X,XXX the patient in XXX clinical and efficacy Our diverse implants show for than sites impressive outcomes. with

from the the XX During Viality learned how three benefits our clinical of meeting, Viality Symposium their over it of outcomes. about sites we also a with surgeons and patients’ plastic is hosted impacting

Viality, our customers. innovative reception a system predictable fat have every The we’re safe offers customer our transfer needs. of natural, received solution such addresses and to and outcomes, positive facet pleased from

of implant. cup exciting increase own size transfer, enabling area Fat for to without solution their fat provides benefits. with additional also using body Moreover, Sientra, an their patients our growth contouring or

remarkable face. Viality of at Preliminary Viality Sientra of as retention to presented represents other body. Society the the total in the observed with rate nearly $X and of exciting utility the Aesthetic a XX% in additional demonstrates market its the for potential an the of open have This face, Meeting ongoing addressable billion areas studies results an one botox of opportunity

feedback. to a customers the opportunity Viality received through Our have and offering unique had positive experience have our firsthand overwhelmingly initial system

launch. thrilled initial experience with are results from our the early We

will our be Viality driving force growth to We’re has to the performance in confident delivered customers. to our satisfaction, behind Thanks years. coming it continue the and a exceptional

we’re look plans the our we aesthetics of a for to and reminder As pace ahead Sientra’s in product market. excited of the year, launches share

the plastic we surgeons, continue roll market. have Later response. SimpliDerm seen expect positive we most quarter, to a this we’ll in quarter, launch and out This hospital where Viality to very reconstruction to already augmentation

reconstruction a Our aesthetics focus force been driving quarter. behind our success has and on this

committed delivering our our we quality and partnerships, to highest remain to solutions of portfolio the As expand products customers. we strategic

change to has far about that and drive Sientra the We’re ahead. have that positive so lie opportunities proud the market. surgery We the believe accomplished we’re we momentum in excited plastic platform

call the to discuss over Andy to financials. the turn now I’ll

Andy Schmidt

you, Ron. Thank

disciplined flow our All showcased and results. of path expense management cash continued free results to flow financial XXXX exemplary strong elements QX our positive revenue trend create Our three performance. performance, cash

million, highlights million increase $XX.X a as as of $XX.X Record million, year the $XX.X Non-GAAP QX with XX% include. to X.X%. for operating Our year reduction. compared key of prior XXXX prior of period, revenue period, QX expense million financial compared for $XX.X an approximately the

$X.X $X.X $XX.X compared XX% a improvement. improvement, period, of compared as year to million burn as and cash a of view. XXXX cash million trends XX% in cash the EBITDA loss considering our loss, year a million an for prior period, the million flow for prior burn Non-GAAP $XX.X Free to a

build share Our continue to both gains wins. core with augmentation across with on revenues hospital market focus new product and key reconstruction a

current not Viality products quarter. in Our the launch the expected in late will contributions and from small Both period be launch contribution SimpliDerm significant and revenue the of the does a product reflect XXXX. from as contributors half second revenue

our business the despite plastic post pure-play seen seasonal QX on for historically is we divestiture and have a profitable a focus space. being This being this EBITDA reiterates best was revenue non-GAAP XXXX surgery in Our lightest the of MiraDry our quarter. accomplished

a also is performance flow cash free spotlight. Our

of shipment revenue a high carries performance. quarter first bonus and seasonally fiscal cash payables due high to QX usage payouts and product Our year to seasonally due materials

of third This cash the quarter consecutive is improved performance. flow

we $XX.X the three year million free past year-over-year. burn XX% this During flow cash $XX.X at quarters, million improvement saw to decreased from

the P&L year. of the QX the is Viality our last to $XX.X view, expensing related prototype to revenues which for complementing to expenses period forma same for Completing million, our Year-over-year launch. pro variance compares XX.X% due XX%, primarily XXXX gross was margin

of amortization of sales. non-cash GAAP charged depreciation expense gross amortization million. of G&A due technology Viality, accounting were by and This XX.X% $X.X knowhow affected prior the the in a non-cash to margin expense. of charge to product. In due of subsequent new change develop cost primarily periods, to was is launch negatively manufacturing shipping inclusion and this and The of is the

XX% $XX previous $XX.X for million, year’s was XXXX QX from million, for an compared XXXX expense Total as QX decrease. QX was loss continuing in million which for period. million operating or GAAP the $X.X operations to Total XXXX to loss $XX.X million GAAP compares $XX.X a

key to balance March sheet XX, $XX.X was ended XXXX, million. on Switching items. Cash

drive we our cash cash year revenues, Given positive the we sufficient that flow fiscal feel cash and business performance performance free exiting growing free have XXXX. to to flow

million, inventories. performance continue from performing XXXX, see XXXX, This XXXX, inventory performance year-end of Accounts consistent XXXX. our with our March focus ending is down receivable capital inventories at $XX.X Entering We in $XX.X on Viality million, March year-end At from we million strong XX, building December also was includes at of management XX, down XX, to working efficiencies. $XX.X XXXX, AR balance million. well. $XX.X

all of improving trend seen In to our fantastic we’ve a our forward performance. start in of financial facets model XXXX all, financial continuing and to look

At I’ll Ron back turn to call remarks. this time, few the for concluding a

Ron Menezes

to quarters time Sientra, delivering At revenue, stopping we’re not Andy. and excellence, just there. you, commitment our record-breaking Thank proving with time XX we’re With we’re not success. But again. satisfied of consecutive

the to innovation Our form best to be our the for products services mission possible provide to and of valued customers. and is

for and reconstruction We’ll beyond. expanding not big to we both just for sake. and Looking the and augmentation in ahead, and have our plans growth of we looking grow keep are reach growing markets, XXXX

the strategic future in SimpliDerm, goal, We’re better our long-term with we’re addition years. taking approach ensure with three to revenue services. of are of offers company transforming a products And most a areas to into doubling that even potential the portfolio Sientra Invest diverse for growth, innovative a profitability. the and positioned achieve our we in next

to And Q&A. for Operator? the call the Operator I’ll with turn over that,

Operator

And with Craig-Hallum with Instructions] Group. from Thank question. Capital first will you. our proceed today Nowak Alex question [Operator Please your come

Alex Nowak

had afternoon. Great. calls couple All We afternoon, right. of this a everyone. Good

the how just for sell You but to the might tissue SimpliDerm, a into expand have label expander business. on already covered this, you mesh ultimately could

Just SimpliDerm for pursue it’s to you’re these implement label aren’t Would -- given portfolio? a on ultimately reconstruction ever talk that or there’s for breast measures reconstruction. label through -- how you the going into breast maybe

Ron Menezes

Hey. Thanks, Alex.

with our Officer Dajles, Denise us. have Chief We Technical

So Denise.

Denise Dajles

Yeah. Thank you. Hi, Alex.

reconstruction procedures as is reinforcement used type tissue Soft well. autologous reconstruction of including procedures, reconstructions or in breast and all

it For uses can in highly replacing pre-pectoral undertake. physicians other off-label example, might that reconstruction decide is derm used. a be you’re to used the when only There are and

or However, we are reinforcement. soft applications label promote is tissue we would as ADM on the not promoting of them

Alex Nowak

more then how how trending? speak it’s There’s and been side, trending. been but And Understood. I actually and around is April demand reconstructive maybe aesthetics augmentation some demand May. in Specifically, QX, I’m of the also that’s in interesting the just to guess, on commentary kind interested market Okay.

can provide side. the you us Just what around macro

Ron Menezes

The to and well you’ve across impacting side, cetera. across Alex, et the probably macro environment is something fillers, toxins similar cosmetics areas, other also seen as

of mirroring impact, that year first similar market see couple what year happened of is as the in kind you If of months the last see well. or the we

us, in quarter the but big data. seen obviously, data the for don’t For a growth dramatic happened for market We the dominant have reconstruction. robust on reconstruction. what saw We areas, the player both very in first was, we’ve

of we’ll is continue bottomline And the augmentation take the to share.

we a almost so bringing we’re accounts. brought that new accounts. saw pace XXX on That’s faster even board You recon

pace of we the share. have data market we’ll with But increase yet. positioned comes future, accounts don’t that share current would new We be the to continuing confident back. this We’re for as when that our very well be position

waiting think diversified I reconstruction. happens, this products more having leaning we’re that and that’s type thing adding market now we’re have products all to in keep we but of a the and see seeing we well the that while reconstruction, new doing on about beautiful when

Alex Nowak

last view out competition Okay. And give then just right question. just on there the your environment now. Maybe us

share. of recent when after latest specifically landscape? said out, on keep the You there or taking on view coming data Is there data to your going you just But there? hearing set both you’re speak what out from kind are competitive three-year data aesthetics, to you like coming that out clinicians out

Ron Menezes

Yeah.

detail, of share we’ll a primary data. data all just are are let they We’re and it’s about competitors, aug, it’s continue to Allergan competitors talk Mentor about a includes PIC Denise? protect trying because excited comprehensive business the data, a gain that as our very have more and now, just and We a patients. from we data, And three discussed. just little I’ll great not kinds to we their Denise

Denise Dajles

Yeah.

from over released Aesthetic where set the for post-approval with complications been XXX add all has which our we patients, submitted study, our and of and have see at be print publication, augmentation, X,XXX we and So in patients sites which data the Meeting, augmentation different Society points and reconstruction the cohorts when kept revision will data at soon, hopefully, primary rates over types different all very the have you outstanding reconstruction revision contractor primary low. we we six-year

X% implanted. You’re cohorts all only implants XX about infants in XX,XXX and talking for over ruptured

but customers includes appreciate the traditionally confident even that data So which we and cohorts, these continue numbers data being very our our outstanding the value those to cohorts, keep our clinical what and worst are are that at top. the including reconstruction feel

Alex Nowak

I you. the Excellent. appreciate update. Thank

Operator

proceed next from Our with question your question. Block Stifel. comes Jon Please with

Joe Federico

revenue fat with we Federico you of to roughly right I that’s X% previously thinking grafting. for XXXX? that, Joe to mentioned Are wanted expected This still I to on guys. XX% is Jon. Hi, the know start that exiting you that be range? had

Ron Menezes

That is correct.

in to depends how expect We reconstruction. XX% X% we get on quickly

getting very -- starting XXX close very, getting -- hospitals We’re Viality available. we’re to Xst have excited, will June that now because we’re close

Keep to They’ll finding et and up obviously our representatives, those in now. cetera. hospitals be mind, that’s available the getting users,

So, June hospital we’ll start of a kind environment. Xst pace high the in really

Joe Federico

helpful. That’s any update to Is progress or Okay. on on GPOs know bundling, line had bundled And any said for and time working the is front? the that you there were then I there Viality? contracts. trying with that packages set up you that

Ron Menezes

are as has It talking now. we right happened

is as SimpliDerm part and part But GPOs that now are and our implants starting we So well. IDNs Dermaspan AlloXX, going the discussion and to really as of Viality, and we’re Viality, critical include the hospitals includes obviously, to well. and and

So, hospital, the but surgeons in cosmetic not with Viality also is as part the just well. of it,

Joe Federico

could here. at holding that last And then up Could anything near see in point? just Great. Okay. an in AlloXX this specific if where the that On future or sneak currently we there Pro, is does I approval one one sit?

Denise Dajles

is This Yeah. Denise.

are the still FDA. ongoing So conversations with

very in process will of from positive very still but and news still questions-and-answers, soon. are back the forth with We them that we’re have we

Joe Federico

Great. Okay. you. Thank

Operator

Thank you.

with comes proceed Group. Maxim Anthony next Vendetti question. Our with from your question Please

Anthony Vendetti

Thanks. I to just up wanted on follow Viality.

the it you commercial at quarter. began did -- the you this said You launch of Was the end quarter? say

Ron Menezes

early that users high users seating, a give where to already experience some of kind two try an it and remarks, those are did opening just in programs the I you started some in of we Anthony, weeks feedback, Viality level Yeah. some my critical as out with individuals entry what last and March. positive, more. overwhelmingly at stated they is early Those buying

the since launch augmentation. XX% coming they that the coming that through flip So XX% we’re the from to majority is really to in Viality. full now revenue -- starting the and XX% uses, keep by the reconstruction now expect go XX% XX% of of year, use probably we’re we reconstruction patients to But an of mind, from end

Anthony Vendetti

Sure. Sure.

even were So launch, it. commercial though the you the you seating began --

-- $XX.X for wasn’t your there So of ex-Viality, quarter, almost was this right? number million entirely revenue

Ron Menezes

was immaterial, It the of Yes. amount that.

Anthony Vendetti

thought. That’s That’s my Yeah. right.

that se how also or that you patients or How other to cross-selling think many it’s think there’s think And possible the then use do Okay. do about do per they’ll you many sales are going you people how not Viality if about probably using even products or that they’re using a -- see that opportunity products. be does does physicians or not Sientra that using force -- biology strategically?

Ron Menezes

analog, our use to going I’m own Well, Anthony.

we fourth If you that the the beginning look with shared share market at at the quarter. of year

has implants, AlloXX tissue For over AlloXX the much time, our the because expander longest existing share expanders. clinical benefits of a had their higher tissue of

closer. got XXXX, and closer And fourth of share for quarter the time, the first the

to at used for X and In are in the a XX.X% marketplace fourth X finished points. tissue share implants quarter, they to be the about expander we example, For our XX.X%. the separation of

So a they’re now share within apart. point

expect the And with thing same Viality. we

us high rates. over different had the that Viality, has everyone products your opening came to busy, positive product speakers for grafting ask excitement do doors our are are that up right our of questions customers for we’re We customers. Viality in was current about the a a as and with as importance is nothing brought fat we and the huge about now using importance booth that enter there Viality Viality, Miami, the retention of to several a buzz And fat door with not talking

Viality utilize the get open we door, so we as do expanders in to or processes, like just expanders obviously the tissue use and and to start well. implants then hospital the office the start And with tissue expect bringing

Anthony Vendetti

Okay. But the be slowdown And same not No. in the think from any to on that seeing slowdown aesthetic or We’ve business good. resistant? continues you’re do your been impact. curious, you sounds you then any macro environment. or That practices, are maybe side augmentation the inflation/recession just of seeing practicing hearing but the some I’m just

Ron Menezes

No.

I think you to several into areas. divide it have

at primary as no couple happened of That this it a back happened augmentation, you there’s and to well. revisions of But size are continue implants If months definitely a probably coming slowdown. solid. of first We saw for look year where the last year. different or size patients smaller be

new And Viality then doors the for having now beautiful thing it opens about us.

first beyond that was around are a in that the saw patients uses smaller that six we the using months using are for breast data Viality just of different implant. Some

side diversified becoming for see solid. company patients seeing cosmetic results And the performance the reconstruction using we reconstruction. lot a was the are a and in getting in we’re very face. great a of the surgeons then, quarter lot is start data the obviously, of and within -- And So the also we very, first really

diversification So even specialty within us. benefit for huge is having that a one

our GPOs, really bundling in now to And with one-stop that with with those get or makes competitor stated shopping and also just hospitals and able two products. team shopping, it for before, one walking a is it be IDNs the hard products, company, as really one-stop our come created a with to moat, we’re with has new which in having multiple I products

Anthony Vendetti

hop Yeah. That’s very back in Okay. helpful. the I’ll very Thanks much. queue.

Operator

attending now concludes question-and-answer today’s session the presentation. everybody you concluded. That for Thank and conference today’s has

now your lines. may disconnect You

Sientra (SIENQ) 11 May 232023 Q1 Earnings call transcript