UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
 
FORM 8-K
 
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): May 8, 2019
 
SIENTRA, INC.
(Exact Name of Registrant as Specified in Its Charter)

					
Delaware	 	001-36709	 	20-5551000	
(State or Other Jurisdiction
of Incorporation)	 	(Commission
File Number)	 	(IRS Employer
Identification No.)	
 
420 South Fairview Avenue, Suite 200
Santa Barbara, CA 93117
(Address of Principal Executive Offices and Zip Code)
Registrant’s Telephone Number, Including Area Code: (805) 562-3500
Securities registered pursuant to Section 12(b) of the Act:

Title of each class	 	Trading
Symbol(s)	 	Name of each exchange on which registered	
Common Stock, par value $0.01 per share	 	SIEN	 	The Nasdaq Stock Market LLC	

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions ( see General Instruction A.2. below):
☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)	
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)	
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))	
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))	
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company  ⌧
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ⌧

 
Item 2.02.	Results of Operations and Financial Condition.	
On May 8, 2019, Sientra, Inc. (the “ Company ”) issued a press release announcing its financial condition and results of operations for the period ended March 31, 2019. A copy of the press release is furnished as Exhibit 99.1 and is incorporated herein by reference.
The information under Item 2.02 of this Current Report on Form 8-K, including the press release furnished as Exhibit 99.1, is being furnished, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, and shall not be deemed to be incorporated by reference into any of the Company’s filings, whether made before or after the date hereof, regardless of any general incorporation language in any such filing.
Item 9.01.	Financial Statements and Exhibits.	
(d)	Exhibits.	
 
Exhibit No.	 	Description	
99.1	 	Earnings Press Release of Sientra, Inc. dated May 8, 2019.	
 
2

SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereto duly authorized.
 
 	 	SIENTRA, INC.	
 	 	 	
Dated: May 8, 2019	 	By:	/s/ Jeffrey Nugent	
 	 	 	Jeffrey Nugent	
 	 	 	Chairman and Chief Executive Officer	
 
3

Exhibit 99.1

 
Sientra Reports First Quarter 2019 Financial Results
 
First Quarter 2019 Net Sales of $17.6 million, Growth of 20% year over year
 
Provides 2019 Net Sales Outlook of $79 million to $83 million

Santa Barbara, CA – May 8, 2019 – Sientra, Inc. (NASDAQ: SIEN), a medical aesthetics company (“Sientra” or the “Company”), announced today its financial results for the first quarter ended March 31, 2019.
 
Jeff Nugent, Chairman and Chief Executive Officer of Sientra, commented, “In the first quarter, we continued to drive robust growth across both of our segments, achieving net sales of $17.6 million, a 20% increase compared to the year-ago period. This quarterly performance represents a solid start towards our 2019 objectives.”
 
Mr. Nugent added, “Our Breast Products segment grew net sales 14% year over year, strong evidence that we continue to gain market share. I am extremely proud of this accomplishment considering the media headwinds this category experienced in the first quarter. We were pleased with the FDA’s announcement last week confirming that all breast implant options remain safe and effective and will continue to be available in the United States. We are also excited about the FDA’s recent approval of our extra-high profile implants, which we expect to be a key addition to our breast reconstruction portfolio.”
 
Mr. Nugent concluded, “miraDry delivered another strong quarter, in spite of typical capital equipment seasonality, achieving net sales growth of 27% year over year. We fully scaled our marketing efforts in the first quarter based on the learnings from our 2018 pilots and launched our “No Sweat” global campaign. As our sales and marketing initiatives gain traction and drive increased brand awareness and market activation, I remain confident in the miraDry business model and believe the business is well-positioned to be a significant growth driver for Sientra in 2019 and beyond.”
 
First Quarter 2019 Financial Review
Total net sales for the first quarter 2019 were $17.6 million, an increase of 20% compared to total net sales of $14.7 million for the same period in 2018.

 
Net sales for the Breast Products segment totaled $9.8 million in the first quarter 2019, a 14% increase compared to $8.5 million for the same period 2018. Breast Products sales growth was primarily driven by new customer conversion programs and continued strong performance of the tissue expander portfolio.
 
Net sales for the miraDry segment totaled $7.8 million in the first quarter 2019, a 27% increase compared to $6.1 million for the same period 2018. miraDry sales growth was primarily driven by strong consumables growth internationally.
 
Gross profit for the first quarter 2019 was $11.1 million, or 63.1% of sales, compared to gross profit of $8.6 million, or 58.5% of sales, for the same period 2018. Changes in consolidated gross margin were driven by the overall mix between Breast Products and miraDry, as well as the geographic and capital versus consumable mix within miraDry.
 
Operating expenses for the first quarter 2019 were $36.9 million, compared to $27.5 million of expenses for the same period 2018. The growth in operating expenses was driven by increased investments in sales and marketing, higher stock based compensation, and one-time consulting fees associated with Sientra’s commercial initiatives.
 
Net loss for the first quarter 2019 was ($26.5) million, or ($0.91) per share, compared to a net loss of ($19.4) million, or ($0.99) per share, for the same period 2018.
 
On a non-GAAP basis, the Company reported an adjusted EBITDA loss of ($21.1) million compared to a loss of ($14.8) million for the same period 2018.
 
Net cash and cash equivalents as of March 31, 2019 were $62 million, compared to $87 million as of December 31, 2018.  
 
2019 Net Sales Outlook
For 2019, the Company expects net sales in the range of $79 million to $83 million, representing growth of 16% to 22% year-over-year, compared to net sales of $68.1 million in 2018.
 
2019 segment net sales outlook:

 	•	Breast Products net sales of $44 to $46 million	
 	•	miraDry net sales of $35 to $37 million	
 
Conference Call
Sientra will hold a conference call today, May 8, 2019 at 4:30 p.m. ET to discuss first quarter results.

The dial-in numbers are 844- 464-3933 for domestic callers and 765- 507-2612 for international callers. The conference ID is 4982524 . A live webcast of the conference call will be available on the Investor Relations section of the Company's website at www.sientra.com .
 
A replay of the call will be available starting on May 8 , 2019 at 7:30 p.m. ET through May 15 , 2019 at 11:59 p.m. ET.  To access the replay, dial 855-859-2056 for domestic callers and 404-537-3406 for international callers and use the replay conference ID 4982524 . The webcast will be available on the Investor Relations section of the Company’s website for 30 days following the completion of the call.  
 
Use of Non-GAAP Financial Measures
Sientra has supplemented its US GAAP net income (loss) with a non-GAAP measure of Adjusted EBITDA. Management believes that this non-GAAP financial measure provides useful supplemental information to management and investors regarding the performance of the Company, facilitates a more meaningful comparison of results for current periods with previous operating results, and assists management in analyzing future trends, making strategic and business decisions and establishing internal budgets and forecasts. A reconciliation of non-GAAP Adjusted EBITDA to GAAP net income (loss), the most directly comparable GAAP measure, is provided in the schedule below.
 
There are limitations in using this non-GAAP financial measure because it is not prepared in accordance with GAAP and may be different from non-GAAP financial measures used by other companies. This non-GAAP financial measure should not be considered in isolation or as a substitute for GAAP financial measures. Investors and potential investors should consider non-GAAP financial measures only in conjunction with Sientra’s financial statements prepared in accordance with GAAP and the reconciliations of the non-GAAP financial measure provided in the schedule below.
 
About Sientra
Headquartered in Santa Barbara, California, Sientra is a diversified global medical aesthetics company and a leading partner to aesthetic physicians. The Company offers a suite of products designed to make a difference in patients' lives by enhancing their body image, growing their self-esteem, and restoring their confidence. Sientra has developed a broad portfolio of products with technologically differentiated characteristics, supported by independent laboratory testing and strong clinical trial outcomes. The Company’s Breast Products Segment includes its OPUS™ breast implants, the first fifth generation breast implants approved by the FDA for sale in the United States, its ground-breaking Allox2® breast tissue expander with patented dual-port and integral drain technology, and BIOCORNEUM® the #1 performing, preferred and recommended scar gel of plastic surgeons (*) . The Company’s miraDry Segment, comprises its miraDry® system, which is approved for sale in over 40 international markets, and is the only non-surgical FDA-cleared device for the permanent reduction of underarm sweat, odor and hair of all colors.
(*)  Data on file

Forward-Looking Statements
This press release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, based on management’s current assumptions and expectations of future events and trends, which affect or may affect the Company’s business, strategy, operations or financial performance, and actual results may differ materially from those expressed or implied in such statements due to numerous risks and uncertainties.  Forward-looking statements include, but are not limited to, statements regarding the Company’s expected net sales for the year ended December 31, 2019, the expected growth of the Company’s current customer base and acquisition of new customers, the Company’s ability to achieve sustainable, long-term growth across its business segments, and the Company’s ability drive increased brand awareness and market activation. Such statements are subject to risks and uncertainties, including the dependence on conclusion of the review procedures for the quarter ended March 31, 2019 by the Company’s independent auditors, positive reaction from plastic surgeons and their patients to Sientra’s Breast Products, the ability to meet consumer demand, the acceptance and growth of its miraDry segment.  Additional factors that could cause actual results to differ materially from those contemplated in this press release can be found in the Risk Factors section of Sientra’s public filings with the Securities and Exchange Commission.  All statements other than statements of historical fact are forward-looking statements. The words ‘‘believe,’’ ‘‘may,’’ ‘‘might,’’ ‘‘could,’’ ‘‘will,’’ ‘‘aim,’’ ‘‘estimate,’’ ‘‘continue, ‘‘anticipate,’’ ‘‘intend,’’ ‘‘expect,’’ ‘‘plan,’’ or the negative of those terms, and similar expressions that convey uncertainty of future events or outcomes are intended to identify estimates, projections and other forward-looking statements. Estimates, projections and other forward-looking statements speak only as of the date they were made, and, except to the extent required by law, the Company undertakes no obligation to update or review any estimate, projection or forward-looking statement.

Investor Contact:
Neil Bhalodkar
805-679-8845 

Sientra, Inc	 	
Consolidated Statements of Operations	 	
(In thousands, except per share and share amounts)	 	
(Unaudited)	 	
 	 	 	 	 	 	 	 	 	 	
 	 	 	Three Months Ended	 	
 	 	 	March 31,	 	
 	 	 	2019	 	 	2018	 	
Net sales	 	 	$	17,552	 	 	$	14,676	 	
Cost of goods sold	 	 	 	6,474	 	 	 	6,097	 	
Gross profit	 	 	 	11,078	 	 	 	8,579	 	
Operating expenses:	 	 	 	 	 	 	 	 	 	
Sales and marketing	 	 	 	20,401	 	 	 	15,256	 	
Research and development	 	 	 	3,054	 	 	 	2,751	 	
General and administrative	 	 	 	13,474	 	 	 	9,499	 	
Total operating expenses	 	 	 	36,929	 	 	 	27,506	 	
Loss from operations	 	 	 	(25,851	)	 	 	(18,927	)	
Other income (expense), net:	 	 	 	 	 	 	 	 	 	
Interest income	 	 	 	304	 	 	 	40	 	
Interest expense	 	 	 	(952	)	 	 	(655	)	
Other income (expense), net	 	 	 	15	 	 	 	119	 	
Total other income (expense), net	 	 	 	(633	)	 	 	(496	)	
Loss before income taxes	 	 	 	(26,484	)	 	 	(19,423	)	
Income tax (benefit) expense	 	 	 	—	 	 	 	—	 	
Net loss	 	 	$	(26,484	)	 	$	(19,423	)	
Basic and diluted net loss per share attributable to common stockholders	 	 	$	(0.91	)	 	$	(0.99	)	
Weighted average outstanding common shares used for net loss per share attributable to common stockholders:	 	 	 	 	 	 	 	 	 	
Basic and diluted	 	 	 	29,099,382	 	 	 	19,613,417	 	

Sientra, Inc	 	
Condensed Consolidated Balance Sheets	 	
(In thousands)	 	
(Unaudited)	 	
 	 	 	 	 	 	 	 	 	
 	 	March 31,	 	 	December 31,	 	
 	 	2019	 	 	2018	 	
Assets	 	 	 	 	 	 	 	 	
Current assets:	 	 	 	 	 	 	 	 	
Cash and cash equivalents	 	$	61,955	 	 	$	86,899	 	
Accounts receivable, net	 	 	24,767	 	 	 	22,527	 	
Inventories, net	 	 	27,242	 	 	 	24,085	 	
Prepaid expenses and other current assets	 	 	3,411	 	 	 	2,612	 	
Total current assets	 	 	117,375	 	 	 	136,123	 	
Property and equipment, net	 	 	3,146	 	 	 	2,536	 	
Goodwill	 	 	12,507	 	 	 	12,507	 	
Other intangible assets, net	 	 	15,915	 	 	 	16,495	 	
Other assets	 	 	22,682	 	 	 	698	 	
Total assets	 	$	171,625	 	 	$	168,359	 	
Liabilities and Stockholders' Equity	 	 	 	 	 	 	 	 	
Current liabilities:	 	 	 	 	 	 	 	 	
Current portion of long-term debt	 	$	12,998	 	 	$	6,866	 	
Accounts payable	 	 	15,109	 	 	 	13,184	 	
Accrued and other current liabilities	 	 	30,416	 	 	 	27,697	 	
Legal settlement payable	 	 	—	 	 	 	410	 	
Customer deposits	 	 	10,892	 	 	 	9,936	 	
Sales return liability	 	 	8,016	 	 	 	6,048	 	
Total current liabilities	 	 	77,431	 	 	 	64,141	 	
Long-term debt, net of current portion	 	 	24,416	 	 	 	27,883	 	
Deferred and contingent consideration	 	 	6,531	 	 	 	6,481	 	
Warranty reserve and other long-term liabilities	 	 	21,017	 	 	 	2,976	 	
Total liabilities	 	 	129,395	 	 	 	101,481	 	
Stockholders' equity:	 	 	 	 	 	 	 	 	
Total stockholders' equity	 	 	42,230	 	 	 	66,878	 	
Total liabilities and stockholders' equity	 	$	171,625	 	 	$	168,359	 	

Sientra, Inc	 	
Condensed Consolidated Statements of Cash Flows	 	
(In thousands)	 	
(Unaudited)	 	

 	 	 	 	 	 	 	 	 	
 	 	Three Months Ended	 	
 	 	March 31,	 	
 	 	2019	 	 	2018	 	
Cash flows from operating activities:	 	 	 	 	 	 	 	 	
Net loss	 	$	(26,484	)	 	$	(19,423	)	
Adjustments to reconcile net loss to net cash used in operating activities:	 	 	 	 	 	 	 	 	
Depreciation and amortization	 	 	831	 	 	 	880	 	
Provision for doubtful accounts	 	 	342	 	 	 	233	 	
Provision for warranties	 	 	273	 	 	 	183	 	
Provision for inventory	 	 	289	 	 	 	199	 	
Amortization of acquired inventory step-up	 	 	—	 	 	 	59	 	
Change in fair value of warrants	 	 	(87	)	 	 	(121	)	
Change in fair value of contingent consideration	 	 	185	 	 	 	621	 	
Change in deferred revenue	 	 	384	 	 	 	(99	)	
Amortization of debt discount and issuance costs	 	 	56	 	 	 	51	 	
Stock-based compensation expense	 	 	3,700	 	 	 	2,548	 	
Payments of contingent consideration liability in excess of acquisition-date fair value	 	 	(630	)	 	 	—	 	
Changes in assets and liabilities, net of effects from acquisitions:	 	 	 	 	 	 	 	 	
Accounts receivable	 	 	(2,583	)	 	 	(5,735	)	
Inventories	 	 	(3,373	)	 	 	(1,191	)	
Prepaid expenses, other current assets and other assets	 	 	396	 	 	 	(1,009	)	
Insurance recovery receivable	 	 	—	 	 	 	(10	)	
Accounts payable	 	 	1,853	 	 	 	4,684	 	
Accrued and other liabilities	 	 	(2,312	)	 	 	948	 	
Legal settlement payable	 	 	(410	)	 	 	—	 	
Customer deposits	 	 	956	 	 	 	8	 	
Sales return liability	 	 	1,968	 	 	 	4,400	 	
Net cash used in operating activities	 	 	(24,646	)	 	 	(12,774	)	
Cash flows from investing activities:	 	 	 	 	 	 	 	 	
Purchase of property and equipment	 	 	(610	)	 	 	(142	)	
Net cash used in investing activities	 	 	(610	)	 	 	(142	)	
Cash flows from financing activities:	 	 	 	 	 	 	 	 	
Proceeds from exercise of stock options	 	 	106	 	 	 	—	 	
Proceeds from issuance of common stock under ESPP	 	 	683	 	 	 	391	 	
Tax payments related to shares withheld for vested restricted stock units (RSUs)	 	 	(2,725	)	 	 	(1,296	)	
Gross borrowings under the Revolving Loan	 	 	4,183	 	 	 	9,033	 	
Repayment of the Revolving Loan	 	 	(1,565	)	 	 	(5,735	)	
Payments of contingent consideration up to acquisition-date fair value	 	 	(370	)	 	 	—	 	
Deferred financing costs	 	 	—	 	 	 	(6	)	
Net cash provided by financing activities	 	 	312	 	 	 	2,387	 	
Net decrease in cash, cash equivalents and restricted cash	 	 	(24,944	)	 	 	(10,529	)	
Cash, cash equivalents and restricted cash at:	 	 	 	 	 	 	 	 	
Beginning of period	 	 	87,242	 	 	 	26,931	 	
End of period	 	$	62,298	 	 	$	16,402	 	
 	 	 	 	 	 	 	 	 	
Reconciliation of cash, cash equivalents, and restricted cash to the consolidated balance sheets	 	 	 	 	 	 	 	 	
Cash and cash equivalents	 	$	61,955	 	 	$	16,059	 	
Restricted cash included in other assets	 	 	343	 	 	 	343	 	
Total cash, cash equivalents and restricted cash	 	$	62,298	 	 	$	16,402	 	

Sientra, Inc.	 	
Reconciliation of Net Loss to Non-GAAP Adjusted EBITDA	 	
(Unaudited)	 	
 	 	 	 	 	 	 	 	 	 	
 	 	 	Three Months Ended	 	
 	 	 	March 31,	 	
Dollars, in thousands	 	 	2019	 	 	2018	 	
Net loss, as reported	 	 	$	(26,484	)	 	$	(19,423	)	
Adjustments to net loss:	 	 	 	 	 	 	 	 	 	
Interest (income) expense and other, net	 	 	 	633	 	 	 	496	 	
Depreciation and amortization	 	 	 	831	 	 	 	939	 	
Accretion in fair value adjustments to contingent consideration	 	 	 	185	 	 	 	621	 	
Stock-based compensation	 	 	 	3,700	 	 	 	2,548	 	
Total adjustments to net loss	 	 	 	5,349	 	 	 	4,604	 	
Adjusted EBITDA	 	 	$	(21,135	)	 	$	(14,819	)	

 	 	 	 	 	 	 	 	 	 	
 	 	 	Three Months Ended	 	
 	 	 	March 31,	 	
As a Percentage of Revenue**	 	 	2019	 	 	2018	 	
Net loss, as reported	 	 	 	(150.9	%)	 	 	(132.3	%)	
Adjustments to net loss:	 	 	 	 	 	 	 	 	 	
Interest (income) expense and other, net	 	 	 	3.6	%	 	 	3.4	%	
Depreciation and amortization	 	 	 	4.7	%	 	 	6.4	%	
Accretion in fair value adjustments to contingent consideration	 	 	 	1.1	%	 	 	4.2	%	
Stock-based compensation	 	 	 	21.1	%	 	 	17.4	%	
Total adjustments to net loss	 	 	 	30.5	%	 	 	31.4	%	
Adjusted EBITDA	 	 	 	(120.4	%)	 	 	(101.0	%)	
 	 	 	 	 	 	 	 	 	 	
** Adjustments may not add to the total figure due to rounding