Sonendo, Inc. Reports First Quarter 2024 Financial Results and Announces Strategic Reset Priorities
Recent Highlights
-
Recorded total revenue of
$7.0 million for first quarter of 2024, exceeding previously issued guidance of$6.0 million ; ending the quarter with installed base of 1,142 and achieved a healthy console backlog -
Increased average procedure instrument selling price from
$71.60 in the fourth quarter of 2023 to$75.00 in the first quarter of 2024 by limiting certain discount programs and focusing on utilization opposed to shipments. In the future quarters, we expect procedure instrument shipments to align with customer utilization - Announced strategic reset of commercial and operational priorities including commercial strategy, cash conservation, and margin expansion
-
Divested TDO practice management software segment in
March 2024 , resulting in a gain of$5.7 million - First quarter GAAP gross margin of 28%; non-GAAP gross margin of 30%, an improvement of more than 700 basis points over the first quarter of 2023
-
First quarter GAAP operating loss of
$10.2 million ; non-GAAP operating loss of$7.5 million , a 41% improvement over the first quarter of 2023 -
Raised 2024 full year revenue guidance range to
$29 million to$31 million , from prior guidance of$28 million to$30 million
“Building on our learnings over the past two years,
First Quarter 2024 Financial Results
Except as otherwise indicated, the GAAP and non-GAAP financial measures presented in this press release exclude discontinued operations.
Total revenue from continuing operations was
Gross margin from continuing operations for the first quarter of 2024 was 28%, compared to 23% for the first quarter of 2023. During the first quarter of 2024, we recorded in cost of sales
Total operating expenses for the first quarter of 2024 were
Operating loss was
Net loss from both continuing and discontinued operations was
Cash and cash equivalents and short-term investments as of
2024 Financial Guidance
The company expects total revenue for the full year of 2024 to be in the range of
Webcast and Conference Call Information
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Forward Looking Statements
This press release includes forward-looking statements (statements which are not historical facts) within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to, express or implied forward-looking statements relating to the Company’s anticipated business and financial performance on an on-going basis and Sonendo’s 2024 financial guidance. You are cautioned that such statements are not guarantees of future performance and that our actual results may differ materially from those set forth in the forward-looking statements. Forward-looking statements are predictions, projections and other statements about future events that are based on current expectations and assumptions; speak only as of the date they are made; and, as a result, are subject to risks and uncertainties that may change at any time. Factors that could cause the Company’s actual results to differ materially from these forward-looking statements are described in detail in our registration statements, reports and other filings with the
Use of Non-GAAP Financial Measures
Sonendo’ financial results are prepared in accordance with generally accepted accounting principles in
For a reconciliation of our Non-GAAP measures presented herein to GAAP measures, the most directly comparable GAAP financial measure, please see “Reconciliation of GAAP to Non-GAAP Gross Profit and Gross Margin” and “Reconciliation of GAAP to Non-GAAP Operating Loss” in the financial schedules below.
CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except share data) |
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2024 |
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2023 |
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(Unaudited) |
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ASSETS |
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Current assets: |
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Cash and cash equivalents |
|
$ |
18,580 |
|
|
$ |
14,009 |
|
Short-term investments |
|
|
15,009 |
|
|
|
32,773 |
|
Accounts receivable, net |
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|
4,176 |
|
|
|
4,790 |
|
Inventory |
|
|
12,116 |
|
|
|
11,074 |
|
Prepaid expenses and other current assets |
|
|
1,611 |
|
|
|
1,969 |
|
Current assets of discontinued operations |
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|
1,162 |
|
|
|
656 |
|
Total current assets |
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52,654 |
|
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|
65,271 |
|
Property and equipment, net |
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|
767 |
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|
461 |
|
Operating lease right-of-use assets |
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|
3,227 |
|
|
|
2,703 |
|
Other assets |
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|
127 |
|
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|
128 |
|
Non-current assets of discontinued operations |
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— |
|
|
|
9,597 |
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Total assets |
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$ |
56,775 |
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$ |
78,160 |
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
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Current liabilities: |
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Accounts payable |
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$ |
916 |
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$ |
1,142 |
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Accrued expenses |
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|
2,737 |
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|
|
3,072 |
|
Accrued compensation |
|
|
1,470 |
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|
|
2,413 |
|
Operating lease liabilities |
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|
1,172 |
|
|
|
1,250 |
|
Current portion of term loan |
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|
10,800 |
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|
|
24,900 |
|
Other current liabilities |
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|
1,786 |
|
|
|
1,844 |
|
Current liabilities of discontinued operations |
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|
73 |
|
|
|
700 |
|
Total current liabilities |
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18,954 |
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|
|
35,321 |
|
Operating lease liabilities, net of current |
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|
1,888 |
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|
|
1,423 |
|
Term loan, net of current |
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|
10,911 |
|
|
|
12,467 |
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Other liabilities |
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|
491 |
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|
|
530 |
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Total liabilities |
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32,244 |
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|
49,741 |
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Commitments and contingencies |
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Stockholders’ equity: |
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Preferred stock, |
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— |
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— |
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Common stock, |
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70 |
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64 |
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Additional paid-in-capital |
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461,237 |
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458,357 |
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Accumulated other comprehensive loss |
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(1 |
) |
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|
11 |
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Accumulated deficit |
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(436,775 |
) |
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(430,013 |
) |
Total stockholders’ equity |
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24,531 |
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|
28,419 |
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Total liabilities and stockholders’ equity |
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$ |
56,775 |
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$ |
78,160 |
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (unaudited) (In thousands, except share and per share data) |
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Three Months Ended |
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2024 |
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2023 |
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Revenue, net |
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$ |
7,047 |
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$ |
8,678 |
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Cost of sales |
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Product and service |
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|
4,900 |
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|
6,700 |
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Impairment of long-lived assets |
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|
146 |
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|
|
— |
|
Total cost of sales |
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|
5,046 |
|
|
|
6,700 |
|
Gross profit |
|
|
2,001 |
|
|
|
1,978 |
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Operating expenses: |
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Selling, general and administrative |
|
|
10,061 |
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|
14,114 |
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Research and development |
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|
2,189 |
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|
2,927 |
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Total operating expenses |
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12,250 |
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|
17,041 |
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Operating loss |
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|
(10,249 |
) |
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|
(15,063 |
) |
Other expense, net: |
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Interest and financing costs, net |
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|
(1,940 |
) |
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|
(579 |
) |
Loss before income tax expense |
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(12,189 |
) |
|
|
(15,642 |
) |
Income tax expense |
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|
— |
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— |
|
Loss from continuing operations, net of tax |
|
|
(12,189 |
) |
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|
(15,642 |
) |
Income from discontinued operations, net of tax |
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|
5,427 |
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|
271 |
|
Net loss |
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$ |
(6,762 |
) |
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$ |
(15,371 |
) |
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Other comprehensive income (net of tax): |
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Unrealized (loss) gain on short-term investments |
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(12 |
) |
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|
56 |
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Comprehensive loss |
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$ |
(6,774 |
) |
|
$ |
(15,315 |
) |
Net loss per share from continuing operations – basic and diluted |
|
$ |
(0.13 |
) |
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$ |
(0.16 |
) |
Net income per share from discontinued operations – basic and diluted |
|
$ |
0.06 |
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$ |
0.00 |
|
Net loss per share – basic and diluted |
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$ |
(0.07 |
) |
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$ |
(0.16 |
) |
Weighted-average shares outstanding – basic and diluted |
|
|
94,822,835 |
|
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|
93,391,444 |
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RECONCILIATION OF GAAP TO NON-GAAP GROSS PROFIT AND GROSS MARGIN (unaudited, in thousands) |
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Three Months Ended |
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|
2024 |
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2023 |
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Gross profit |
|
$ |
2,001 |
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|
$ |
1,978 |
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Gross margin |
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28 |
% |
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23 |
% |
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Adjustments: |
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Impairment of long-lived assets |
|
|
146 |
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— |
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Non-GAAP gross profit |
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$ |
2,147 |
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$ |
1,978 |
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Non-GAAP gross margin |
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|
30 |
% |
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23 |
% |
RECONCILIATION OF GAAP TO NON-GAAP OPERATING LOSS (unaudited, in thousands) |
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Three Months Ended |
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|
2024 |
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2023 |
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GAAP operating loss |
|
$ |
10,249 |
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$ |
15,063 |
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Adjustments: |
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Stock based compensation: |
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Included in cost of sales |
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|
(302 |
) |
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|
(139 |
) |
Included in selling, general and administrative |
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(1,724 |
) |
|
|
(1,540 |
) |
Included in research and development |
|
|
(495 |
) |
|
|
(224 |
) |
Depreciation and amortization |
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Included in cost of sales |
|
|
— |
|
|
|
(177 |
) |
Included in selling, general and administrative |
|
|
(55 |
) |
|
|
(150 |
) |
Included in research and development |
|
|
— |
|
|
|
(31 |
) |
Impairment of long-lived assets |
|
|
|
|
|
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Included in cost of sales |
|
|
(146 |
) |
|
|
— |
|
Non-GAAP operating loss |
|
$ |
7,527 |
|
|
$ |
12,802 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20240508041029/en/
Investor Contact:
IR@Sonendo.com
Source: