Sonendo, Inc. (“Sonendo”), a leading dental technology company
and developer of the GentleWave® System, today reported financial
results for the quarter ended March 31, 2023.
Recent Highlights
- Total revenue of $10.7 million for the first quarter of 2023,
representing growth of 19%, compared to prior year period
- Procedure instrument revenue of $5.7 million for the first
quarter of 2023, representing growth of approximately 33% compared
to prior year period
- Ending installed base as of March 31, 2023, was 1,005
units
“We are off to a great start in 2023, marked by the installation
of our one-thousandth GentleWave console and 19% year-over-year
revenue growth,” said Bjarne Bergheim, president and chief
executive officer of Sonendo. “Additionally, we are pleased with
the considerable improvement to our gross margin profile,
increasing sequentially from 27% in the fourth quarter of 2022 to
31% in the first quarter of 2023. Our team is excited about the
opportunity of engaging with higher-volume general dentists, in
addition to the Endodontic specialists, as we move to give more
patients access to our unique technology. We look forward to
expanding our market share and executing on our commercial strategy
as we drive steady growth throughout the rest of the year.”
First Quarter 2023 Financial Results
Total Revenue was $10.7 million for the first quarter of 2023,
an increase from $9.0 million for the first quarter of 2022.
GentleWave console revenue was $2.0 million for the first quarter
of 2023 and $2.1 million for the first quarter of 2022. Procedure
instrument revenue was $5.7 million, an increase from $4.3 million
for the first quarter of 2022. Software revenue was $2.0 million,
an increase from $1.8 million for the first quarter of 2022.
Gross margin for first quarter of 2023 was 31%, compared to 25%
for the first quarter of 2022.
Total operating expenses for the first quarter of 2023 were
$18.2 million, compared to $16.8 million for the first quarter of
2022.
Loss from operations was $14.8 million for the first quarter of
2023, compared to $14.6 million for the first quarter of 2022.
Non-GAAP loss from operations was $12.4 million for the first
quarter of 2023 compared to $12.8 million for the first quarter of
2022. Non-GAAP loss from operations excludes stock-based
compensation expense, and depreciation and amortization
expense.
Net loss was $15.4 million for the first quarter of 2023,
compared to $15.5 million for the first quarter of 2022.
Cash and cash equivalents and short-term investments as of March
31, 2023 totaled $74.9 million. In April 2023, subsequent to and
not included in cash and cash equivalents and short-term
investments presented as of March 31, 2023, the Company received
cash payments of $3.2 million of the $4.4 million Employee
Retention Credit (ERC) that was recognized in other income in
2022.
2023 Financial Guidance
The Company expects total revenue for the second quarter of 2023
to be in the range of $11.0 million to $11.4 million.
The Company expects total revenue for the full year 2023 to be
in the range of $48.0 million to $51.0 million, consistent with
guidance previously provided.
Webcast and Conference Call Information
Sonendo will host a conference call to discuss the first quarter
2023 financial results after the market close on Tuesday, May 9,
2023 at 1:30 p.m. Pacific Time / 4:30 p.m. Eastern Time. Investors
interested in listening to the conference call may do so by dialing
(833) 470-1428 for domestic callers or (929) 526-1599 for
international callers, using access code: 489954. Live audio of the
webcast will be available on the “Investors” section of the
company’s website at: https://investor.sonendo.com. The webcast
will be archived and available for replay for at least 90 days
after the event.
About Sonendo
Sonendo is a commercial-stage medical technology company focused
on saving teeth from tooth decay, the most prevalent chronic
disease globally. Sonendo develops and manufactures the GentleWave®
System, an innovative technology platform designed to treat tooth
decay by cleaning and disinfecting the microscopic spaces within
teeth without the need to remove tooth structure. The system
utilizes a proprietary mechanism of action, which combines
procedure fluid optimization, broad-spectrum acoustic energy and
advanced fluid dynamics, to debride and disinfect deep regions of
the complex root canal system in a less invasive procedure that
preserves tooth structure. The clinical benefits of the GentleWave
System when compared to conventional methods of root canal therapy
include improved clinical outcomes, such as superior cleaning that
is independent of root canal complexity and tooth anatomy, high and
rapid rates of healing and minimal to no post-operative pain. In
addition, the GentleWave System can improve the workflow and
economics of dental practices. Sonendo is also the parent company
of TDO® Software, the developer of widely used endodontic practice
management software solutions, designed to simplify practice
workflow. TDO Software integrates practice management, imaging,
referral reporting and CBCT imaging, and offers built-in
communication with the GentleWave System.
For more information about Sonendo and the GentleWave System,
please visit www.sonendo.com. To find a GentleWave doctor in your
area, please visit www.gentlewave.com.
Forward Looking Statements
In addition to background and historical information, this press
release contains “forward-looking statements” based on Sonendo’s
current expectations, forecasts and beliefs including statements
related to Sonendo’s 2023 financial guidance. These forward-looking
statements are subject to inherent uncertainties, risks, and
assumptions that are difficult to predict. Actual outcomes and
results could differ materially due to a number of factors,
including the degree of market acceptance of our products by dental
practitioners and our ability to maintain strong working
relationships with our customers, risks associated with
manufacturing our products in large-scale commercial quantities,
our dependence on third party suppliers, our ability to raise
capital when needed, and our ability to comply with extensive
government regulation and oversight. These and other risks and
uncertainties include those described more fully in the company’s
Annual Report on Form 10-K for the year ended December 31, 2022
filed with the U.S. Securities and Exchange Commission (SEC) on
March 8, 2023 under the sections titled “Risk Factors” and
“Management’s Discussion and Analysis of Financial Condition and
Results of Operation”, as well as any reports that we may file with
the SEC in the future. Forward-looking statements contained in this
announcement are based on information available to Sonendo as of
the date hereof. Sonendo undertakes no obligation to update such
information except as required under applicable law. These
forward-looking statements should not be relied upon as
representing Sonendo’s views as of any date subsequent to the date
of this press release and should not be relied upon as prediction
of future events. In light of the foregoing, investors are urged
not to rely on any forward-looking statement in reaching any
conclusion or making any investment decision about any securities
of Sonendo.
Use of Non-GAAP Financial Measures
Sonendo’s financial results are prepared in accordance with
accounting principles generally accepted in the United States of
America (“GAAP”). This press release and the reconciliation tables
included in the financial schedules below include non-GAAP loss
from operations. Non-GAAP loss from operations exclude, as
applicable, stock-based compensation expense and depreciation and
amortization. Management believes that non-GAAP loss from
operations is useful in helping identify the company’s core
operating performance and enables management to consistently
analyze the period-to-period financial performance of the core
business operations. Management also believes that non-GAAP loss
from operations, will enable investors to assess the company in the
same way that management has historically assessed the company’s
operating results against comparable companies with conventional
accounting methodologies. The company’s definition of non-GAAP loss
from operations has limitations as an analytical tool and may
differ from other companies reporting similarly named measures.
Non-GAAP measures should not be considered measures of financial
performance under GAAP, and the items excluded from such non-GAAP
measures should not be considered in isolation or as alternatives
to financial statement data presented in the financial statements
as an indicator of financial performance or liquidity. Non-GAAP
measures should be considered in addition to results prepared in
accordance with GAAP but should not be considered a substitute for
or superior to GAAP results.
For a reconciliation of our non-GAAP loss from operations
presented herein to GAAP loss from operations, the most directly
comparable GAAP financial measure, please see “Reconciliation of
GAAP to Non-GAAP Loss from Operations” in the financial schedules
below.
SONENDO, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(in thousands, except share
data)
March 31,
December 31,
2023
2022
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents
$
12,648
$
17,665
Short-term investments
62,299
73,784
Accounts receivable, net
6,432
5,798
Inventory
15,969
15,462
Prepaid expenses and other current
assets
9,091
8,397
Total current assets
106,439
121,106
Property and equipment, net
2,843
2,860
Operating lease right-of-use assets
3,932
2,455
Intangible assets, net
2,126
2,292
Goodwill
8,454
8,454
Other assets
118
118
Total assets
$
123,912
$
137,285
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities:
Accounts payable
$
5,392
$
4,438
Accrued expenses
4,217
5,357
Accrued compensation
2,429
3,616
Operating lease liabilities
1,246
1,114
Other current liabilities
1,949
2,191
Total current liabilities
15,233
16,716
Operating lease liabilities, net of
current
2,470
1,095
Term loan, net of current
36,891
36,746
Other liabilities
735
773
Total liabilities
55,329
55,330
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.001 par value;
authorized —10,000,000 shares; issued and outstanding - none
—
—
Common stock, $0.001 par value; authorized
— 500,000,000 shares; issued and outstanding— 51,252,466 shares as
of March 31, 2023 and 49,974,281 shares as of December 31, 2022
51
50
Additional paid-in-capital
453,002
451,060
Accumulated other comprehensive loss
(5
)
(61
)
Accumulated deficit
(384,465
)
(369,094
)
Total stockholders’ equity
68,583
81,955
Total liabilities and stockholders’
equity
$
123,912
$
137,285
SONENDO, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF
OPERATIONS AND COMPREHENSIVE
LOSS
(unaudited)
(In thousands, except share
and per share data)
Three Months Ended March
31,
2023
2022
Product revenue
$
8,678
$
7,203
Software revenue
2,046
1,830
Total revenue
10,724
9,033
Cost of sales
7,378
6,754
Gross profit
3,346
2,279
Operating expenses:
Selling, general and administrative
14,666
11,985
Research and development
3,494
4,850
Total operating expenses
18,160
16,835
Loss from operations
(14,814
)
(14,556
)
Other expense, net:
Interest and financing costs, net
(557
)
(966
)
Loss before income tax expense
(15,371
)
(15,522
)
Income tax expense
—
—
Net loss
$
(15,371
)
$
(15,522
)
Other comprehensive income (net of
tax):
Unrealized gain on short-term
investments
56
—
Comprehensive loss
$
(15,315
)
$
(15,522
)
Net loss per share – basic and diluted
$
(0.16
)
$
(0.59
)
Weighted-average shares outstanding –
basic and diluted
93,391,444
26,405,252
SONENDO, INC.
RECONCILIATION OF GAAP TO
NON-GAAP
LOSS FROM OPERATIONS
(In thousands)
Three Months Ended March
31,
2023
2022
GAAP loss from operations
$
14,814
$
14,556
Adjustments:
Stock based compensation:
Included in cost of sales
(148
)
(101
)
Included in selling, general and
administrative
(1,562
)
(978
)
Included in research and development
(232
)
(315
)
Depreciation and amortization
Included in cost of sales
(235
)
(171
)
Included in selling, general and
administrative
(239
)
(193
)
Included in research and development
(31
)
(48
)
Non-GAAP loss from operations
$
12,367
$
12,750
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230509006207/en/
Investor Contact: Gilmartin Group Greg Chodaczek
IR@Sonendo.com
Sonendo (NYSE:SONX)
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