Sonendo, Inc. (“Sonendo”), a leading dental technology company
and developer of the GentleWave® System, today reported financial
results for the quarter ended June 30, 2023.
Recent Highlights
- Total revenue of $11.0 million for the second quarter of 2023,
representing growth of 5%, compared to prior year period
- Procedure instrument revenue of $5.6 million for the second
quarter of 2023, representing growth of approximately 16% compared
to prior year period
- Ending installed base as of June 30, 2023, was 1,040 units
- On August 1, 2023, announced CleanFlowTM Procedure Instrument
now indicated for use on anterior teeth
“As we reach the mid-point of 2023, I am encouraged by the
progress we have made increasing adoption of CleanFlow, bringing
assembly of our new GentleWave G4 console in-house, and the
reception we are receiving from the general dentist community,”
said Bjarne Bergheim, president and chief executive officer of
Sonendo. “The recent announcement of CleanFlow use for anterior
teeth marks an important milestone in our pathway to one procedure
instrument, improving workflow and efficiencies for both our
GentleWave Providers and internal production. Our focus remains
steadfast in expanding the number of GentleWave Providers and
making the GentleWave Procedure the standard of care for root canal
therapy.”
Second Quarter 2023 Financial Results
Total Revenue was $11.0 million for the second quarter of 2023,
an increase from $10.5 million for the second quarter of 2022.
GentleWave console revenue was $2.2 million for the second quarter
of 2023 and $2.7 million for the second quarter of 2022. Procedure
instrument revenue was $5.6 million, an increase from $4.8 million
for the second quarter of 2022. Other product related revenue was
$1.0 million for the second quarter of 2023 and $0.9 million for
the second quarter of 2022. Software revenue was $2.3 million, an
increase from $2.1 million for the second quarter of 2022.
Gross margin for the second quarter of 2023 was 10%, compared to
24% for the second quarter of 2022. During the second quarter of
2023, we recorded two charges relating to inventory, a $1.7 million
charge due to reduced sales volumes of our legacy Gen3 console and
a $1.2 million charge due to phasing out our legacy procedure
instruments, the molar and anterior pre-molar as we move to the
CleanFlow procedure instrument.
Total operating expenses for the second quarter of 2023 were
$18.0 million, compared to $16.8 million for the second quarter of
2022.
Loss from operations was $17.0 million for the second quarter of
2023, compared to $14.3 million for the second quarter of 2022.
Non-GAAP loss from operations was $14.4 million for the second
quarter of 2023 compared to $11.9 million for the second quarter of
2022. Non-GAAP loss from operations excludes stock-based
compensation expense, and depreciation and amortization
expense.
Net loss was $17.7 million for the second quarter of 2023,
compared to $15.1 million for the second quarter of 2022.
Cash and cash equivalents and short-term investments as of June
30, 2023 totaled $65.9 million, which included all of the $4.4
million payment of Employee Retention Credit ("ERC") recognized in
other income in 2022.
2023 Financial Guidance
The Company expects total revenue for the third quarter of 2023
to be in the range of $10.2 million to $10.6 million and now
anticipates total revenue for the full year of 2023 to be in the
range of $44.0 million to $46.0 million.
Webcast and Conference Call Information
Sonendo will host a conference call to discuss the second
quarter 2023 financial results after the market close on Wednesday,
August 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 (404) 975-4893
for international callers, using access code: 052150. 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)
June 30,
December 31,
2023
2022
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents
$
12,567
$
17,665
Short-term investments
53,320
73,784
Accounts receivable, net
6,308
5,798
Inventory
13,161
15,462
Prepaid expenses and other current
assets
1,854
8,397
Total current assets
87,210
121,106
Property and equipment, net
2,777
2,860
Operating lease right-of-use assets
3,619
2,455
Intangible assets, net
1,960
2,292
Goodwill
8,454
8,454
Other assets
118
118
Total assets
$
104,138
$
137,285
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities:
Accounts payable
$
1,092
$
4,438
Accrued expenses
4,235
5,357
Accrued compensation
2,690
3,616
Operating lease liabilities
1,290
1,114
Other current liabilities
2,038
2,191
Total current liabilities
11,345
16,716
Operating lease liabilities, net of
current
2,132
1,095
Term loan, net of current
37,043
36,746
Other liabilities
574
773
Total liabilities
51,094
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— 52,659,684 shares as
of June 30, 2023 and 49,974,281 shares as of December 31, 2022
53
50
Additional paid-in-capital
455,176
451,060
Accumulated other comprehensive loss
(30
)
(61
)
Accumulated deficit
(402,155
)
(369,094
)
Total stockholders’ equity
53,044
81,955
Total liabilities and stockholders’
equity
$
104,138
$
137,285
SONENDO, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF
OPERATIONS AND COMPREHENSIVE
LOSS
(unaudited)
(In thousands, except share
and per share data)
Three Months Ended June
30,
Six Months Ended June
30,
2023
2022
2023
2022
Product revenue
$
8,763
$
8,442
$
17,441
$
15,645
Software revenue
2,280
2,105
4,326
3,935
Total revenue
11,043
10,547
21,767
19,580
Cost of sales
9,945
7,994
17,323
14,748
Gross profit
1,098
2,553
4,444
4,832
Operating expenses:
Selling, general and administrative
14,751
12,822
29,417
24,807
Research and development
3,298
4,018
6,792
8,868
Total operating expenses
18,049
16,840
36,209
33,675
Loss from operations
(16,951
)
(14,287
)
(31,765
)
(28,843
)
Other expense, net:
Interest and financing costs, net
(739
)
(850
)
(1,296
)
(1,816
)
Loss before income tax expense
(17,690
)
(15,137
)
(33,061
)
(30,659
)
Income tax expense
—
—
—
—
Net loss
$
(17,690
)
$
(15,137
)
$
(33,061
)
$
(30,659
)
Other comprehensive income (loss) (net of
tax):
Unrealized (loss) gain on short-term
investments
(25
)
(42
)
31
(42
)
Comprehensive loss
$
(17,715
)
$
(15,179
)
$
(33,030
)
$
(30,701
)
Net loss per share – basic and diluted
$
(0.19
)
$
(0.57
)
$
(0.35
)
$
(1.16
)
Weighted-average shares outstanding –
basic and diluted
93,684,289
26,468,515
93,538,676
26,437,058
SONENDO, INC.
RECONCILIATION OF GAAP TO
NON-GAAP
LOSS FROM OPERATIONS
(In thousands)
Three Months Ended
Six Months Ended June
30,
2023
2022
2023
2022
GAAP loss from operations
$
16,951
$
14,287
$
31,765
$
28,843
Adjustments:
Stock based compensation:
Included in cost of sales
(91
)
(140
)
(239
)
(241
)
Included in selling, general and
administrative
(1,781
)
(1,407
)
(3,343
)
(2,385
)
Included in research and development
(187
)
(407
)
(419
)
(722
)
Depreciation and amortization
—
Included in cost of sales
(248
)
(168
)
(483
)
(339
)
Included in selling, general and
administrative
(257
)
(188
)
(496
)
(381
)
Included in research and development
(31
)
(41
)
(62
)
(89
)
Non-GAAP loss from operations
$
14,356
$
11,936
$
26,723
$
24,686
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230809890152/en/
Investor Contact: Gilmartin Group Greg Chodaczek
IR@Sonendo.com
Sonendo (NYSE:SONX)
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