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): August 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 August 8, 2019, Sientra, Inc. (the “ Company ”) issued a press release announcing its financial condition and results of operations for the period ended June 30, 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 August 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: August 8, 2019	 	By:	/s/ Jeffrey Nugent	
 	 	 	Jeffrey Nugent	
 	 	 	Chairman and Chief Executive Officer	
 
3

Exhibit 99.1

Sientra Reports Second Quarter 2019 Financial Results
 
Record total net sales of $20.5 million in 2Q19, growth of 17% year over year
Breast Products net sales of $11.2 million in 2Q19, growth of 19% year over year
Record miraDry net sales of $9.3 million in 2Q19, growth of 15% year over year
Reiterates 2019 total net sales outlook of $79 to $83 million
 
Santa Barbara, CA – August 8, 2019 – Sientra, Inc. (NASDAQ: SIEN), a medical aesthetics company, announced today its financial results for the second quarter ended June 30, 2019.
 
Jeff Nugent, Chairman and Chief Executive Officer of Sientra, commented, “In the second quarter, we achieved record net sales of $20.5 million, a 17% increase compared to the year-ago period. This quarterly performance was driven by strong growth in both our Breast Products and miraDry segments and represents solid progress towards achieving our 2019 objectives.”
 
Mr. Nugent added, “Our Breast Products segment grew net sales 19% year over year, strong evidence of market share gains from our targeted new customer conversion programs as well as deeper penetration of existing accounts. We believe the superior safety profile and industry-leading warranty of our OPUS® implants is clearly resonating with board-certified plastic surgeons and their patients.”
 
Mr. Nugent concluded, “miraDry delivered another strong quarter, achieving record net sales of $9.3 million. Our brand awareness and market activation initiatives have positioned miraDry to be a significant growth driver for Sientra in 2019 and beyond.”
 
Second Quarter 2019 Financial Review
Total net sales for the second quarter 2019 were $20.5 million, an increase of 17% compared to total net sales of $17.6 million for the same period in 2018.
 
Net sales for the Breast Products segment totaled $11.2 million in the second quarter 2019, a 19% increase compared to $9.4 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 $ 9.3 million in the second quarter 2019, a 15 % increase compared to $ 8.1 million for the same period 2018. miraDry sales growth was driven by an increase in sales of consoles and consumables globally, with a particularly strong U.S. performance .
 
Gross profit for the second quarter 2019 was $12.7 million, or 61.9% of sales, compared to gross profit of $10.9 million, or 62.1% of sales, for the same period 2018.
 
Operating expenses for the second quarter 2019 were $52.8 million, compared to $27.8 million of expenses for the same period 2018. Excluding a $15.8 million non-cash impairment of certain goodwill and intangibles related to miraDry, operating expenses increased $9.2 million, primarily driven by increased investments in sales and marketing.
 
Net loss for the second quarter 2019 was ($40.8) million, or ($1.19) per share, compared to a net loss of ($18.0) million, or ($0.73) per share, for the same period 2018.
 
On a non-GAAP basis, the Company reported a second quarter 2019 adjusted EBITDA loss of ($20.4) million compared to a loss of ($11.8) million for the same period 2018.
 
Net cash and cash equivalents as of June 30, 2019 were $146 million, compared to $62 million as of March 31, 2019.  
 
2019 Net Sales Outlook
For 2019, the Company reiterates its outlook for 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 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, August 8, 2019 at 4:30 p.m. ET to discuss second quarter results.
 
The dial-in numbers are 844-464-3933 for domestic callers and 765-507-2612 for international callers. The conference ID is 8084147. 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 August 8 , 2019 at 7:30 p.m. ET through August 15 , 2019 at 7:30 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 8084147 . The webcast will be available on the Investor Relations section of the Company’s website 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, 201 9 , 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 to 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 June 30, 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,’’ ‘‘wi ll,’’ ‘‘aim,’’ ‘‘estimate,’’ ‘‘ continue, ‘‘anticipate,’’ ‘‘intend,’’ ‘‘expect,’’ ‘‘plan,’’ ‘‘p osition,” 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
805-679-8885

 

Sientra, Inc	 	
Consolidated Statements of Operations	 	
(In thousands, except per share and share amounts)	 	
(Unaudited)	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Three Months Ended	 	 	Six Months Ended	 	
 	 	June 30,	 	 	June 30,	 	
 	 	2019	 	 	2018	 	 	2019	 	 	2018	 	
Net sales	 	$	20,525	 	 	$	17,554	 	 	$	38,077	 	 	$	32,229	 	
Cost of goods sold	 	 	7,813	 	 	 	6,660	 	 	 	14,287	 	 	 	12,756	 	
Gross profit	 	 	12,712	 	 	 	10,894	 	 	 	23,790	 	 	 	19,473	 	
Operating expenses:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Sales and marketing	 	 	21,918	 	 	 	15,477	 	 	 	42,319	 	 	 	30,733	 	
Research and development	 	 	3,270	 	 	 	2,301	 	 	 	6,325	 	 	 	5,052	 	
General and administrative	 	 	11,814	 	 	 	10,014	 	 	 	25,289	 	 	 	19,514	 	
Goodwill and other intangible impairment	 	 	15,774	 	 	 	—	 	 	 	15,774	 	 	 	—	 	
Total operating expenses	 	 	52,776	 	 	 	27,792	 	 	 	89,707	 	 	 	55,299	 	
Loss from operations	 	 	(40,064	)	 	 	(16,898	)	 	 	(65,917	)	 	 	(35,826	)	
Other income (expense), net:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Interest income	 	 	269	 	 	 	40	 	 	 	573	 	 	 	80	 	
Interest expense	 	 	(982	)	 	 	(867	)	 	 	(1,932	)	 	 	(1,521	)	
Other income (expense), net	 	 	23	 	 	 	(303	)	 	 	38	 	 	 	(184	)	
Total other income (expense), net	 	 	(690	)	 	 	(1,130	)	 	 	(1,321	)	 	 	(1,625	)	
Loss before income taxes	 	 	(40,754	)	 	 	(18,028	)	 	 	(67,238	)	 	 	(37,451	)	
Income tax (benefit) expense	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	
Net loss	 	$	(40,754	)	 	$	(18,028	)	 	$	(67,238	)	 	$	(37,451	)	
Basic and diluted net loss per share attributable to
   common stockholders	 	$	(1.19	)	 	$	(0.73	)	 	$	(2.12	)	 	$	(1.69	)	
Weighted average outstanding common shares used for
   net loss per share attributable to common stockholders:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Basic and diluted	 	 	34,290,073	 	 	 	24,761,117	 	 	 	31,709,067	 	 	 	22,202,565	 	

 

Sientra, Inc	 	
Condensed Consolidated Balance Sheets	 	
(In thousands)	 	
(Unaudited)	 	

 	 	June 30,	 	 	December 31,	 	
 	 	2019	 	 	2018	 	
Assets	 	 	 	 	 	 	 	 	
Current assets:	 	 	 	 	 	 	 	 	
Cash and cash equivalents	 	$	146,088	 	 	$	86,899	 	
Accounts receivable, net	 	 	23,887	 	 	 	22,527	 	
Inventories, net	 	 	29,864	 	 	 	24,085	 	
Prepaid expenses and other current assets	 	 	4,017	 	 	 	2,612	 	
Total current assets	 	 	203,856	 	 	 	136,123	 	
Property and equipment, net	 	 	3,686	 	 	 	2,536	 	
Goodwill	 	 	4,878	 	 	 	12,507	 	
Other intangible assets, net	 	 	7,190	 	 	 	16,495	 	
Other assets	 	 	23,235	 	 	 	698	 	
Total assets	 	$	242,845	 	 	$	168,359	 	
Liabilities and Stockholders’ Equity	 	 	 	 	 	 	 	 	
Current liabilities:	 	 	 	 	 	 	 	 	
Current portion of long-term debt	 	$	18,144	 	 	$	6,866	 	
Accounts payable	 	 	14,600	 	 	 	13,184	 	
Accrued and other current liabilities	 	 	36,280	 	 	 	27,697	 	
Legal settlement payable	 	 	—	 	 	 	410	 	
Customer deposits	 	 	11,579	 	 	 	9,936	 	
Sales return liability	 	 	7,020	 	 	 	6,048	 	
Total current liabilities	 	 	87,623	 	 	 	64,141	 	
Long-term debt, net of current portion	 	 	20,938	 	 	 	27,883	 	
Deferred and contingent consideration	 	 	364	 	 	 	6,481	 	
Warranty reserve and other long-term liabilities	 	 	21,847	 	 	 	2,976	 	
Total liabilities	 	 	130,772	 	 	 	101,481	 	
Stockholders’ equity:	 	 	 	 	 	 	 	 	
Total stockholders’ equity	 	 	112,073	 	 	 	66,878	 	
Total liabilities and stockholders’ equity	 	$	242,845	 	 	$	168,359	 	

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

 	 	 	 	 	 	 	 	 	
 	 	Six Months Ended June 30,	 	
 	 	2019	 	 	2018	 	
Cash flows from operating activities:	 	 	 	 	 	 	 	 	
Net loss	 	$	(67,238	)	 	$	(37,451	)	
Adjustments to reconcile net loss to net cash used in operating activities:	 	 	 	 	 	 	 	 	
Goodwill impairment	 	 	7,629	 	 	 	—	 	
Intangible asset impairment	 	 	8,145	 	 	 	—	 	
Depreciation and amortization	 	 	1,725	 	 	 	1,700	 	
Provision for doubtful accounts	 	 	845	 	 	 	489	 	
Provision for warranties	 	 	674	 	 	 	572	 	
Provision for inventory	 	 	790	 	 	 	709	 	
Amortization of acquired inventory step-up	 	 	—	 	 	 	106	 	
Amortization of right-of-use assets	 	 	2,356	 	 	 	—	 	
Lease liability accretion	 	 	927	 	 	 	—	 	
Change in fair value of warrants	 	 	(110	)	 	 	164	 	
Change in fair value of deferred consideration	 	 	9	 	 	 	18	 	
Change in fair value of contingent consideration	 	 	289	 	 	 	1,708	 	
Change in deferred revenue	 	 	270	 	 	 	(161	)	
Amortization of debt discount and issuance costs	 	 	99	 	 	 	85	 	
Stock-based compensation expense	 	 	6,611	 	 	 	5,686	 	
Loss on disposal of property and equipment	 	 	20	 	 	 	—	 	
Payments of contingent consideration liability in excess of acquisition-date fair value	 	 	(630	)	 	 	—	 	
Changes in assets and liabilities:	 	 	 	 	 	 	 	 	
Accounts receivable	 	 	(2,206	)	 	 	(6,343	)	
Inventories	 	 	(6,445	)	 	 	(2,405	)	
Prepaid expenses, other current assets and other assets	 	 	(1,435	)	 	 	(2,518	)	
Insurance recovery receivable	 	 	—	 	 	 	33	 	
Accounts payable	 	 	2,256	 	 	 	4,230	 	
Accrued and other liabilities	 	 	(5,416	)	 	 	1,643	 	
Legal settlement payable	 	 	(410	)	 	 	(1,000	)	
Customer deposits	 	 	1,643	 	 	 	602	 	
Sales return liability	 	 	972	 	 	 	976	 	
Net cash used in operating activities	 	 	(48,630	)	 	 	(31,157	)	
Cash flows from investing activities:	 	 	 	 	 	 	 	 	
Purchase of property and equipment	 	 	(2,056	)	 	 	(160	)	
Net cash used in investing activities	 	 	(2,056	)	 	 	(160	)	
Cash flows from financing activities:	 	 	 	 	 	 	 	 	
Net proceeds from issuance of common stock	 	 	108,028	 	 	 	107,850	 	
Proceeds from exercise of stock options	 	 	106	 	 	 	410	 	
Proceeds from issuance of common stock under ESPP	 	 	683	 	 	 	391	 	
Tax payments related to shares withheld for vested restricted stock units (RSUs)	 	 	(2,825	)	 	 	(1,297	)	
Gross borrowings under the Term Loan	 	 	—	 	 	 	10,000	 	
Gross borrowings under the Revolving Loan	 	 	8,436	 	 	 	12,109	 	
Repayment of the Revolving Loan	 	 	(4,183	)	 	 	(12,109	)	
Payments of contingent consideration up to acquisition-date fair value	 	 	(370	)	 	 	—	 	
Deferred financing costs	 	 	—	 	 	 	(6	)	
Net cash provided by financing activities	 	 	109,875	 	 	 	117,348	 	
Net increase in cash, cash equivalents and restricted cash	 	 	59,189	 	 	 	86,031	 	
Cash, cash equivalents and restricted cash at:	 	 	 	 	 	 	 	 	
Beginning of period	 	 	87,242	 	 	 	26,931	 	
End of period	 	$	146,431	 	 	$	112,962	 	
 	 	 	 	 	 	 	 	 	
Reconciliation of cash, cash equivalents, and restricted cash to the consolidated balance sheets	 	 	 	 	 	 	 	 	
Cash and cash equivalents	 	$	146,088	 	 	$	112,619	 	
Restricted cash included in other assets	 	 	343	 	 	 	343	 	
Total cash, cash equivalents and restricted cash	 	$	146,431	 	 	$	112,962	 	

 

Sientra, Inc.	 	
Reconciliation of Net Loss to Non-GAAP Adjusted EBITDA	 	
(Unaudited)	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Three Months Ended	 	 	Six Months Ended	 	
 	 	June 30,	 	 	June 30,	 	
Dollars, in thousands	 	2019	 	 	2018	 	 	2019	 	 	2018	 	
Net loss, as reported	 	$	(40,754	)	 	$	(18,028	)	 	$	(67,238	)	 	$	(37,451	)	
Adjustments to net loss:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Interest (income) expense and other, net	 	 	690	 	 	 	1,130	 	 	 	1,321	 	 	 	1,625	 	
Depreciation and amortization	 	 	894	 	 	 	868	 	 	 	1,725	 	 	 	1,806	 	
Accretion in fair value adjustments to contingent
   consideration	 	 	104	 	 	 	1,087	 	 	 	289	 	 	 	1,708	 	
Stock-based compensation	 	 	2,911	 	 	 	3,138	 	 	 	6,611	 	 	 	5,686	 	
Goodwill and other intangible impairment	 	 	15,774	 	 	 	—	 	 	 	15,774	 	 	 	—	 	
Total adjustments to net loss	 	 	20,373	 	 	 	6,223	 	 	 	25,720	 	 	 	10,825	 	
Adjusted EBITDA	 	$	(20,381	)	 	$	(11,805	)	 	$	(41,518	)	 	$	(26,626	)	

 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Three Months Ended	 	 	Six Months Ended	 	
 	 	June 30,	 	 	June 30,	 	
As a Percentage of Revenue**	 	2019	 	 	2018	 	 	2019	 	 	2018	 	
Net loss, as reported	 	 	(198.6	%)	 	 	(102.7	%)	 	 	(176.6	%)	 	 	(116.2	%)	
Adjustments to net loss:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Interest (income) expense and other, net	 	 	3.4	%	 	 	6.4	%	 	 	3.5	%	 	 	5.0	%	
Depreciation and amortization	 	 	4.4	%	 	 	4.9	%	 	 	4.5	%	 	 	5.6	%	
Accretion in fair value adjustments to contingent
   consideration	 	 	0.5	%	 	 	6.2	%	 	 	0.8	%	 	 	5.3	%	
Stock-based compensation	 	 	14.2	%	 	 	17.9	%	 	 	17.4	%	 	 	17.6	%	
Goodwill and other intangible impairment	 	 	76.9	%	 	 	0.0	%	 	 	41.4	%	 	 	0.0	%	
Total adjustments to net loss	 	 	99.3	%	 	 	35.5	%	 	 	67.5	%	 	 	33.6	%	
Adjusted EBITDA	 	 	(99.3	%)	 	 	(67.2	%)	 	 	(109.0	%)	 	 	(82.6	%)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
** Adjustments may not add to the total figure due to rounding