Sonendo, Inc. (OTCQX: SONX) (“Sonendo” or the “Company”), a
leading dental technology company and developer of the GentleWave®
System, today reported financial results for the quarter and year
ended December 31, 2023.
Highlights
- Total revenue of $43.9 million for the full year 2023,
representing growth of 5% over the full year 2022
- As of December 31, 2023, the installed base was 1,134 units,
representing growth of approximately 16% compared to December 31,
2022
- In March 2024, finalized divestiture of our TDO practice
management software segment, resulting in gross proceeds of
approximately $16.0 million
- Restructured our Perceptive term loan including a one-time
$15.0 million principal repayment and initiate monthly principal
repayments beginning in March 2024 along with modifications to
certain other terms including revenue covenants.
“We are pleased to have closed the year with a strong installed
base and improved operating leverage despite prevailing
macroeconomic headwinds. In the fourth quarter we made significant
strides in gross margin improvement and cash burn reduction,” said
Bjarne Bergheim, President and Chief Executive Officer of Sonendo.
“As we start 2024, we are refining our commercial strategy.
Following the sale of TDO, our core business is supported by a
healthier balance sheet that allows us to acutely focus on
GentleWave procedure adoption.”
Fourth Quarter 2023 Financial Results
Total revenue was $11.7 million for the fourth quarter of 2023,
an decrease from $12.2 million for the fourth quarter of 2022.
GentleWave Console revenue was $2.9 million for the fourth quarter
of 2023, a decrease from $3.9 million for the fourth quarter of
2022. Procedure instrument revenue was $5.1 million, an increase
from $5.0 million for the fourth quarter of 2022. Software revenue
was $2.7 million, an increase from $2.4 million for the fourth
quarter of 2022. As of December 31, 2023, ending installed base was
1,134 units, representing growth of approximately 16% compared to
December 31, 2022.
Gross margin for the fourth quarter of 2023 was 33%, compared to
27% for the fourth quarter of 2022. During the fourth quarter of
2023, we recorded a $0.2 million charge for impairment of
long-lived assets in cost of sales. Excluding this charge, non-GAAP
gross margin for the fourth quarter of 2023 would have been
35%.
Total operating expenses for the fourth quarter of 2023 were
$13.7 million, compared to $18.1 million for the fourth quarter of
2022.
Loss from operations was $9.9 million for the fourth quarter of
2023, compared to $14.8 million for the fourth quarter of 2022.
Non-GAAP loss from operations was $8.0 million for the fourth
quarter of 2023 compared to $11.9 million for the fourth quarter of
2022. Non-GAAP loss from operations excludes stock-based
compensation expense, depreciation and amortization expense and
impairment of long-lived assets.
Net loss was $10.9 million for the fourth quarter of 2023,
compared to $10.9 million for the fourth quarter of 2022.
Cash and cash equivalents and short-term investments as of
December 31, 2023 totaled $46.8 million.
Full Year 2023 Financial Results
Total revenue was $43.9 million for the full year 2023, an
increase from $41.7 million for the full year 2022. GentleWave
Console revenue was $9.2 million for 2023, a decrease from $10.8
million for 2022. Procedure instrument revenue was $21.6 million,
an increase from $18.9 million for 2022. Software revenue was $9.2
million, an increase from $8.4 million for 2022.
Gross margin for the full year 2023 was 24% , compared to 25%
for the full year 2022. During 2023, we recorded a $1.6 million
charge for impairment of long-lived assets in cost of sales.
Excluding the charges, non-GAAP gross margin for the full year 2023
would have been 28%.
Total operating expenses for 2023 were $68.5 million, compared
to $68.7 million for 2022. During 2023, we recorded $2.1 million in
impairment charges of long-lived assets in operating expenses.
Loss from operations was $57.7 million for 2023, compared to
$58.2 million for 2022. Non-GAAP loss from operations was $45.1
million for 2023, compared to $49.0 million for 2022. Non-GAAP loss
from operations excludes stock-based compensation expense,
depreciation, amortization expense and impairment of long-lived
assets.
Net loss was $60.9 million for 2023 compared to $57.1 million
for 2022.
2024 Financial Guidance
The Company expects the full year 2024 total revenue to be in
the range of $28.0 million to $30.0 million, which excludes all
revenues from the TDO software segment.
Webcast and Conference Call Information
Sonendo will host a conference call to discuss the fourth
quarter and full year 2023 financial results after the market close
on Monday, March 11, 2024 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) 975-4839 for international callers, using access code:
426330. 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. In March 2024, Sonendo divested the
TDO® Software segment by selling substantially all the assets and
liabilities of TDO Software, Inc.
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
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
Securities and Exchange Commission, including the “Risk Factors”
set forth in our Annual Report on Form 10-K, as supplemented by our
quarterly reports on Form 10-Q. Such filings are available on our
website or at www.sec.gov. We undertake no obligation to publicly
update or revise forward-looking statements to reflect subsequent
developments, events, or circumstances, except as may be required
under applicable securities laws. Readers are cautioned not to put
undue reliance on forward-looking statements, and the Company
assumes no obligation and does not intend to update or revise these
forward-looking statements, whether as a result of new information,
future events, or otherwise.
Use of Non-GAAP Financial Measures
Sonendo’ financial results are prepared in accordance with
generally accepted accounting principles in the United States of
America (“GAAP”). This press release and the reconciliation tables
included in the financial schedules below include non-GAAP gross
profit, non-GAAP gross margin and non-GAAP loss from operations
(collectively, the "Non-GAAP measures"). Non-GAAP gross profit and
non-GAAP gross margin exclude impairment of long-lived assets.
Non-GAAP loss from operations exclude, as applicable, stock-based
compensation expense, depreciation and amortization and impairment
of long-lived assets. Management believes that Non-GAAP measures
are 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 measures, 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 for each of the Non-GAAP
measures 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 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
Loss from Operations” in the financial schedules below.
SONENDO, INC.
CONSOLIDATED BALANCE
SHEETS
(in thousands, except share
data)
December 31,
December 31,
2023
2022
ASSETS
Current assets:
Cash and cash equivalents
$
14,009
$
17,665
Short-term investments
32,773
73,784
Accounts receivable, net
5,081
5,798
Inventory
11,074
15,462
Prepaid expenses and other current
assets
2,334
8,397
Total current assets
65,271
121,106
Property and equipment, net
664
2,860
Operating lease right-of-use assets
2,974
2,455
Intangible assets, net
661
2,292
Goodwill
8,454
8,454
Other assets
136
118
Total assets
$
78,160
$
137,285
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities:
Accounts payable
$
1,176
$
4,438
Accrued expenses
3,266
5,357
Accrued compensation
2,758
3,616
Operating lease liabilities
1,377
1,114
Current portion of term loan
24,900
—
Other current liabilities
1,844
2,191
Total current liabilities
35,321
16,716
Operating lease liabilities, net of
current
1,423
1,095
Term loan, net of current
12,467
36,746
Other liabilities
530
773
Total liabilities
49,741
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 as of December 31, 2023 and 2022; issued —
63,547,467 shares as of December 31, 2023 and 49,974,281 shares as
of December 31, 2022; outstanding — 63,547,467 shares as of
December 31, 2023 and 49,974,281 shares as of December 31, 2022
64
50
Additional paid-in-capital
458,357
451,060
Accumulated other comprehensive gain
(loss)
11
(61
)
Accumulated deficit
(430,013
)
(369,094
)
Total stockholders’ equity
28,419
81,955
Total liabilities and stockholders’
equity
$
78,160
$
137,285
SONENDO, INC.
CONSOLIDATED STATEMENTS
OF
OPERATIONS AND COMPREHENSIVE
LOSS
(In thousands, except share
and per share data)
Three Months Ended December
31,
Year Ended December
31,
2023
2022
2023
2022
(Unaudited)
Product revenue
$
9,024
$
9,840
$
34,628
$
33,280
Software revenue
2,668
2,390
9,237
8,376
Total revenue
11,692
12,230
43,865
41,656
Cost of sales:
Product and software
7,617
8,900
31,559
31,176
Impairment of long-lived assets
243
—
1,584
—
Total cost of sales
7,860
8,900
33,143
31,176
Gross profit
3,832
3,330
10,722
10,480
Operating expenses:
Selling, general and administrative
11,163
14,513
54,022
51,906
Research and development
2,514
3,580
12,355
16,776
Impairment of long-lived assets
37
—
2,088
—
Total operating expenses
13,714
18,093
68,465
68,682
Loss from operations
(9,882
)
(14,763
)
(57,743
)
(58,202
)
Other income (expense), net:
Interest and financing cost, net
(994
)
(469
)
(3,174
)
(3,228
)
Employee retention credit
—
4,382
—
4,382
Loss before income tax expense
(10,876
)
(10,850
)
(60,917
)
(57,048
)
Income tax expense
(2
)
(2
)
(2
)
(2
)
Net loss
$
(10,878
)
$
(10,852
)
$
(60,919
)
$
(57,050
)
Other comprehensive income (loss) (net of
tax):
Unrealized gain (loss) on marketable
securities
17
(12
)
72
(61
)
Net comprehensive loss
$
(10,861
)
$
(10,864
)
$
(60,847
)
$
(57,111
)
Net loss per share attributable to common
stock – basic and diluted
$
(0.12
)
$
(0.12
)
$
(0.65
)
$
(1.27
)
Weighted-average shares outstanding –
basic and diluted
94,536,827
93,138,031
93,988,749
44,932,952
SONENDO, INC.
RECONCILIATION OF GAAP TO
NON-GAAP
GROSS PROFIT AND GROSS
MARGIN
(in thousands)
Three Months Ended December
31,
Year Ended December
31,
2023
2022
2023
2022
Gross profit
$
3,832
$
3,330
$
10,722
$
10,480
Gross margin
33
%
27
%
24
%
25
%
Adjustments:
Impairment of long-lived assets
243
—
1,584
—
Non-GAAP gross profit
$
4,075
$
3,330
$
12,306
$
10,480
Non-GAAP gross margin
35
%
27
%
28
%
25
%
SONENDO, INC.
RECONCILIATION OF GAAP TO
NON-GAAP
LOSS FROM OPERATIONS
(In thousands)
Three Months Ended December
31,
Year Ended December
31,
2023
2022
2023
2022
GAAP loss from operations
$
9,882
$
14,763
$
57,743
$
58,202
Adjustments:
Stock based compensation:
Included in cost of sales
(65
)
(198
)
(359
)
(562
)
Included in selling, general and
administrative
(1,301
)
(1,909
)
(6,228
)
(5,729
)
Included in research and development
(125
)
(304
)
(689
)
(1,191
)
Depreciation and amortization
Included in cost of sales
(67
)
(202
)
(807
)
(709
)
Included in selling, general and
administrative
(22
)
(242
)
(780
)
(855
)
Included in research and development
(22
)
(30
)
(116
)
(152
)
Impairment of long-lived assets
Included in cost of sales
(243
)
—
(1,584
)
—
Included in operating expenses
(37
)
—
(2,088
)
—
Non-GAAP loss from operations
$
8,000
$
11,878
$
45,092
$
49,004
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240311314845/en/
Investor Contact: Gilmartin Group Greg Chodaczek
IR@Sonendo.com
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