Welcome to the Sientra's Earnings Conference Call. My name is Hilda, and I will be your operator for today. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session. During the question and answer session, if you have a question, please press zero one on your touchtone phone. As a reminder, this conference is being recorded. I will now turn the call over to Mr. Oliver Bennett. Mr. Bennett, you may begin. Good afternoon, and welcome to the Sientra Third Quarter 2022 Earnings Conference Call. On our call today, we have Ron Menezes, Sientra's President and Chief Executive Officer, Andy Schmidt, Sientra's Chief Financial Officer, Lisa Rosas, Sientra's Senior Vice President of Sales and Marketing, and Dr. Denise Dajles, Senior Vice President of R&D and Regulatory. We are excited that you could join us today as we report yet another record-breaking quarter and provide our vision for why we believe Sientra is positioned to continue our market-beating growth into 2023 and beyond. As reported earlier today, Sientra had Q3 revenues of $22.6 million, which is not only a record third quarter, representing 15% year-over-year growth, but also equals one of the highest quarterly revenue performances for the company ever. We are extremely proud of this achievement as it comes not only in the seasonally lowest quarter of the year, but also at a time when our competitors have reported declines in their United States breast aesthetic businesses. Not only did we report record revenues for the third quarter of 2022, but we also reported a record low free cash outflow of $3.6 million for the quarter. As Andy will detail later in our call, our continued focus on bottom-line discipline is yielding results without compromising our top-line revenue growth. Of course, I have to remind everyone that in our remarks today, we will be including forward-looking statements both in our prepared remarks and in response to any questions you may ask. These forward-looking statements are based on management's current assumptions and expectations of future events and trends. Our actual results may differ materially from those expressed in or implied by the forward-looking statements. The company undertakes no obligation to update or review any estimate, projection, or forward-looking statement. For more detailed discussion of the company's risks and uncertainties, I would refer you to our SEC filings, including our Form 10-K and Form 10-Q available on the company's website. With that reminder, I would now like to ask Ron to provide you with his comments on the quarter and where he sees the company heading into 2023 and beyond. Oliver set the stage perfectly. Even in the slowest quarter, and in spite of microeconomic headwinds, we're reporting on the best quarters ever. These results validate our strategy and demonstrate the strong demand for Sientra's industry-leading products are backed by unrivaled safety profile and innovative programs. Our strategy is focused on driving the top and bottom lines, and we see ample market opportunities in both augmentation and reconstruction. In augmentation, we'll continue to outperform the market. The average of our top-tier surgeons of Sientra's revenue grew by 7% this quarter versus Q3 2021. In addition, we added 130 new accounts during the same time period. Now, looking at reconstruction, we have seen accelerated market penetration. In our top-tier hospital accounts, they grew by about 10% this quarter compared to third quarter 2021. We also added 160 new accounts this past quarter. Now, given what we've seen in the overall market, it is extremely encouraging that we'll continue to see the momentum from this past quarter into fourth quarter. We are now preparing to launch our novel enhanced viability fat transfer product in January. You're gonna hear more from how we're getting ready to launch this product from Lisa and from Denise. Sientra benefits from a deep infrastructure in the U.S. market, which we have worked on for almost a decade. This positions us well to grow our current business and introduce new lines of products without excessive funding requirements. I've asked Lisa to take a few minutes to highlight how we continue to grow and take market share away from our competitors in both augmentation and reconstruction. As we continue to grow the Sientra brand, we've increased our penetration in both augmentation and reconstruction, knowing we have considerable upside in both segments. We also measure market dynamics to involve our strategies based on macroeconomic and other conditions. The reconstruction segment remains strong and stable, which has enabled us to continue the strategies set in place earlier this year. The augmentation category has proven to be resilient over time, and we recently validated that by surveying a group of potential patients, learning that demand remains strong, with 90% of them planning to continue forward with surgery in the next twelve months. We also know that we can outperform the market by continuing to expand our footprint of accounts. We have strong anecdotal evidence that affirms we are disrupting the traditional decision-making process among both patients and surgeons. We continue to grow our global presence, fueled by our safety profile and the strength of our portfolio. We received approval for our breast implants in Saudi Arabia, and we also received approval from Health Canada for our newest implant, the Low Plus Profile. From the beginning, Sientra has been selective in bringing innovative technologies with meaningful advantages backed by long-term proven safety data, which is crucial for patients, physicians, and regulatory bodies. Sientra's long-term solid clinical data, as well as differentiated portfolio, has kept us in a position of strength, increasing our market share as well as expediting global approvals. Our entire team is driven by a shared dedication to make the surgical journey better for women and all our patients. Believe that providing products with an unrivaled safety profile and putting them in the best hands, which is that of the board-certified plastic surgeon, we are truly doing something unique in our space. I'm very confident that we will continue the high-growth trend while realizing efficiencies, fully recognizing the commercial team's success is linked to the overarching corporate goals of both growth and profitability. Dr. Denise Dajles will now share how we are preparing to commercialize our game-changing fat transfer technology, which will be unveiled next month at the Beauty Through Science Conference in New York City. With the launch of our novel fat transfer system, we will become a much more diversified company that provides a full line of products for breast surgery and other body areas, enabling us to be the leader in total body transformation. This will expand our TAM by at least 25% and offer surgeons unique benefits to address unmet needs in the space and obtain safe, natural, predictable, and reliable outcomes. I am very happy to share that this year we've made significant progress in the fat transfer clinical study, with over 10 sites actively enrolling patients. As patients reach the six-month follow-up mark, surgeons are impressed with the consistently high retention they are obtaining with our enhanced viability fat transfer system. We have also been performing cases in other areas beyond the breast, with surgeons using our system for facial fat transfer and even for treating burns. Our early experience has validated the decision to acquire Origin. We strategically invested the time to improve system functionality and enhance the clinical data that is so valued in this category. We are confident that this product will be well received in the market. Now I'll turn it over to Andy to discuss the financial outlook. Highlighting our financial success this quarter, I'll reiterate our record revenue performance of $22.6 million, demonstrating strong performance from all sectors, reconstruction, augmentation, and international. Another key financial highlight was our non-GAAP EBITDA and free cash flow performance. Our non-GAAP EBITDA for Q3 2022 was an $8.6 million loss, our lowest this year. More impressive was our free cash flow performance. Our Q3 2022 free cash flow of a $3.6 million use of cash is a record low cash burn for the company. Diving into our revenue growth, the current period's $22.6 million compares to $19.6 million in Q2 2021, an increase of 15%. Year-to-date 2022 rev of $65.5 million compares to $58 million for 2021, an increase of 13%. The gross margin for Q3 2022 was 56.6%, which compares favorably to 54% for the same period last year. The key driver for gross margins is product and channel mix. Q3 2022 gross margins benefited from the continued expansion of the reconstruction business, which was balanced by the lower margin augmentation in international sectors. Total GAAP operating expense for Q3 2022 was $25.3 million, which compares to $22.3 million in Q3 2021. Non-GAAP or cash-based operating expenses for Q3 2022 was $21.7 million, compared to $19.2 million for Q3 2021. The increase includes the investment in sales and marketing and R&D initiatives to support the imminent launch of our fat transfer products. Our current period non-GAAP operating expense of $21.7 million continues our favorable expense trend this year, comparing to $22.3 million in Q2 2022 and $24.8 million in Q1 2022. Our current non-GAAP expense run rate of $88 million annualized is below our $90 million-$94 million non-GAAP operating expense guidance. Looking forward to 2023, we expect to see continued improvement in non-GAAP operating expense performance as we realize efficiencies but leverage our infrastructure. Year-to-date 2022 GAAP operating expense of $83 million compares to $64.6 million in 2021. Year-to-date 2022 non-GAAP operating expenses of $68.8 million compares to $54.1 million for 2021 and is again partially attributed to current year investment in commercial activities to support new product launches. Total GAAP loss from continuing operations for Q3 2022 was $14.9 million, as compared to a profit of $28.5 million for previous year period. The previous year period includes several significant adjustments, including the fair value of derivative liability adjustment of positive $35.6 million. Switching to key balance sheet items. Our big news are the events that occurred after our September 30th, 2022 period end, and is documented in our Form 10-Q subsequent events section. In October, we took several initiatives to shore up our balance sheet. As previously disclosed, we entered into a new debt facility with Deerfield that achieved several important goals. One, extending the maturity date of our debt to 2026 and beyond. Two, reducing our overall interest expense. And three, lowering our total debt to $73 million. We also completed secondary equity offering, which resulted in approximately $14 million of additional cash for the company. We believe these steps provide us with sufficient balance sheet strength and flexibility to continue executing on their growth plans, including the commercial launch of our fat transfer technology early next year. Q3 has been a busy and fantastic quarter for Sientra. Our record Q3 financial results, the imminent launch of our novel fat transfer product, and our shored up balance sheet are inflection points that set the stage for a great Q4 2022 that will slingshot us into 2023. At this point, I'll turn the call back to the operator. Thank you. We will now begin the question and answer session. If you have a question, please press zero one on your touchtone phone. If you wish to be removed from the queue, please press zero two. If you are using a speakerphone, you may need to pick up the handset first before pressing the numbers. Once again, if you have a question, please press zero one on your touchtone phone. We have a question from Alex Nowak. Please go ahead. Hey, great. Good afternoon, everyone. I was hoping to start actually on the financials there, just, to your last point, Andy, around this year and then slingshot the next year. I just wanted to confirm, are you reiterating the guidance that was given a couple weeks back of $90 million-$95 million for the full year 2022? Just how are you thinking about growth into next year? Obviously, you've got more focus on the recon side. You've got the fat grafting solution launching. How are you thinking about next year? Sure. Thanks for the question. Yeah, we're not changing our guidance that we had out previously. We are confident in that guidance. In terms of our expense guidance, we had $90 million-$93 million. We're coming in at the lower end of that guidance range, again, from continued very good cost performance through this year. We expect good continued cost performance into Q4 and certainly into 2023. We're looking at lower annual numbers. We don't have guidance out yet, but we're very bullish in terms of our ability to continue with the efficiencies that we've reached so far. In terms of market and whatnot and what we expect to see in 2023, obviously financially from my perspective, fat grafting is gonna be a very big contributor. In Lisa's prepared remarks, she had mentioned that we're gonna have the reveal in essentially now a number of weeks. It's right on top of us. Very exciting time for us, and we expect to be shipping in Q1. That's gonna be a big plus. In terms of other market activities, have better experts here on the phone to answer those questions. From a modeling perspective, recon's gonna continue to build. We keep adding accounts, and that's like a waterfall. We keep adding, and those accounts keep building their multiple year contracts. Okay. No, that's extremely helpful. Maybe a multipart here, just, one is your take on the FDA AdCom around tissue expanders. Just what's the thought process coming out of that meeting for what it means for the existing tissue expander out there, but also the pipeline AlloX2 Pro. Second, is the clinical trial expected to read out for the fat grafting solution read out at this conference next month, or does that come out sometime next year? Yeah. Thanks, Alex. I'll have Denise answer those questions. She heads the regulatory team. Denise? Yeah. Thank you, Ron, and hi, Alex. With regards to the tissue expanders, after the panel, now it's a period of public consultation. FDA still has to make a decision and give a ruling regarding Class II or Class III classification. We at this moment do not foresee any impacts on products currently marketed. Even if a Class III classification is selected, current products on the market would have the opportunity to submit a PMA, which of course we will be ready to do. With regards to Pro, it's still under active review with the FDA, and we continue to have active conversations with them through the review process. Again, no ruling has been made from the FDA. With regards to the fat transfer clinical study, during the BTS conference in December, we will have some of the investigators from our study give their perspective. We expect to release first results when we launch the product early next year. That's great. Appreciate the update. Thank you. Thank you. Our next question comes from Kyle Rose. Please go ahead. Hey, this is Caitlin on for Kyle. Just a couple questions. On the fat technology, can you just elaborate more on the conversations you mentioned last quarter that you had with GPOs about the product? Yeah. We are already approaching some of the GPOs with that, as a part of our bidding process and bundling process. We've discussed some of them already. It's too early to tell about timeline of when it'll be added to their GPOs. Got it. Just on Aug, you mentioned on the Q2 call that Aug was down about 7% in the quarter. Did that weakness kind of continue into the Q3? I know you noted kind of a drop in activity in your middle-of-the-road accounts last quarter, while your kind of A and D accounts were continually strong. Are you kind of seeing this similar dynamic into Q3 and into the Q4? Let me just give a little bit of color on the augmentation market and then how we're performing against that. In terms of the augmentation market, there has been a slowdown, but we have shown that we consistently outgrow the market, and it's really a function of both our superior product profile and our innovative programs. The Q3 Aug revenue for Sientra grew double- digits, in fact 16% versus last year, which is significantly better than the market, which is still below traditional levels. No matter what the market does, we have and we continue to grow. What we've seen is over the last three years, about a tripling in our market share. We know that this is a durable market, that it ebbs and flows, but being an important part of our business, we do measure account performance and our top group of doctors, which Ron mentioned earlier, continue to be busy and perform at a very high level. Got it. Just a quick one, any market share data you could share in terms of Aug or recon would be great. Yes. Our market share is still performing very well. What we would anticipate, looking at progress through Q3 and through the end of the year, is augmentation to continue growing, ending the year in the mid-teens, with reconstruction, in the high teens. Awesome. Thanks so much. Thank you. Our next question comes from Anthony Vendetti. Please go ahead. Hi, this is Jeremy on the line for Anthony. Thanks for taking my question. Just briefly on the overall accounts, I know you added about 290 this quarter. What does that bring your total number of accounts to between Aug and recon? Yeah. We're a little over 3,000 now, accounts, total accounts. It's still about. So- 60% Aug and 40% recon. That's a little. You said a little over 3,000? Yes, that's correct. Just, I mean, I know, I think that was the same, approximately the same amount you had at the end of last quarter. Just, can we assume that what size do you have any statistics on the attrition rate and those accounts that are leaving, maybe some, a little more information why you think they're leaving? We, you know, some accounts leave, some accounts don't order for a quarter, so we're looking at what has been ordered this past quarter. Some accounts, because of, obviously, the impact of the market, have less. The great thing is by adding new accounts, we pretty much minimize that impact if someone has had a slow quarter, an account has a slow quarter. The good thing is we don't have many accounts leaving us for a competitor. They may have less orders because of the market, and that's why we continue to add new accounts and continue to expand share with existing accounts. Okay, understood. You're saying they're not leaving to go to competitors. They're just leaving because, you know, macroeconomic factors. Understood. That's helpful. Yeah. You mentioned about the fat study. There's gonna be 200 patients. Do you have how many of those have been enrolled so far, and when can we expect, you know, the enrollment to be finished? Denise, do you wanna jump in on that, this one? With regards to enrollment to the fat transfer study. We are on track to all of our projections. We are making significant progress. We have over 10 sites, and we will have first six-month data to share when we launch. Great. Right now, the study's on track. It depends by site, but enrollment is as expected. Sorry, what was that? I missed that last. No, that enrollment is as we expected since the beginning of the year. Okay. Just last question, maybe you could also then, I know you know, you have a soft launch by the end of this year for the Viality system and then full commercial launch in 2023. Is there maybe any more information you can share what that looks like to you? Yeah, I'll take that one. Our fat transfer product is very unique. As you know, the team had mentioned it's novel. It gives us the opportunity to leverage deficiencies in the market and differentiate our approach from typical fat grafting. One of the things that Denise is working on and that we've identified is the opportunity to go after long-term retention, consistent results. What we're planning is a soft launch, the first weekend in December in New York City, with a group of surgeons and then a full commercial launch in January to our sales force, to be sold in early Q1, directly to our customers. We're planning a disciplined approach to launch, building momentum and adoption with this approach among both our core customer base and with new customers. We're very excited about it. The early feedback from the clinical users has been very positive. We're getting all of the pieces together to launch in just a few weeks. Okay. That sounds great. Um- Oh, sorry, yeah. Just a quick follow-up there, Denise. No, I was just gonna add to Lisa's comment that the expectation among the plastic surgeons based on what they've heard from their peers who are part of the study, it's really high. Okay, that's great. Just a quick follow-up. Is there any plans to maybe bundle you know, the breast implants with the fat grafting technology for customers, or that's, you know, haven't been really thought about yet? Yes. Yes, absolutely. There are a number of benefits with this technology underneath the Sientra umbrella, and that is one of them, that it gives us the opportunity to expand the total product portfolio. We do have plans in place to do that right out of the gate. Obviously, there's a high level of strategic fit within our organization, subject matter expertise in the breast area, you know, the opportunity to continue growing within our existing customer base and new customers. You know, kind of the adjacencies are numerous. But to answer your question directly, yes, we do have plans to approach it from a total portfolio standpoint. Okay, thank you so much. I'll hop back in queue. Thank you. The next question comes from Jonathan Block. Please go ahead. Thanks, guys. Good afternoon. Maybe just the first question, I'll sort of go down the fat transfer road. You're certainly very excited about that product. Let me be more specific. Is there a year-one revenue contribution that we should be thinking about, and what about the gross margin profile of that product as it ramps throughout 2023? Yeah, sure. As we've commented before, we expect to start the year with fat grafting, fat transfer representing at least 5% of revenue and exiting the year at 10% revenue. The way I like to look at it is we expect it to have the type of attach rate that a tissue expander does. Our tissue expander is up to 25% of revenue. The fat transfer, you're looking at the same customer base, right? We've already got the embedded customers. It can perform the same way. It's gonna be how fast we ramp. Other great news, we are having our reveal here in a number of weeks. We're already manufacturing, so we're good to go on that. We don't have any material questions or issues. Since we're manufacturing ourselves, we are in complete control of the cost of goods sold. It's gonna be north of 70% margin product, and so it's gonna be very additive in terms of both revenue and gross margins next year. Okay, great. Very helpful. Thanks. Maybe you mentioned the gross margins. Let me follow up on that. Andy, I didn't hear anything one time, maybe I missed it, but I think the GMs were 56% and change in the quarter and sort of a step back from that more normalized 60% and change in 1H. It seems like gross margins are really gonna be a key determinant in eventually turning a corner on cash flow, right? You can only get so thin on OpEx. Can you help us with gross margins, why the step back in 3Q 2022, and maybe more importantly, how that trajectory looks like going forward? Thanks for your time, guys. Sure. Again, we like to use right now, the way we're wired, about 60% is a good benchmark, and it's gonna change quarter to quarter. In our current quarter, we had actually some very good performance out of international. International is more of a distributor model, which is fantastic on cash and contribution margin, but it's a little bit different gross margin profile. That's one factor that came into play. Other factor that came into play is we have some fantastic loyalty programs that are very targeted, very pulse programs that come into play in Q3, possibly part of Q4, end of year type. What that does is it allows us to actually gain this market share that we're pretty darn proud of, but also what it does is it does not touch our basic pricing. We feel our base pricing is protected. We don't see price compression, but we do choose to use, again, very targeted marketing programs that are loyalty based, depending on which period we're in. Thank you. We have a question from Margaret Kaczor. Please go ahead. Hey, everyone. This is Maggie Boeye on for Margaret today. Thanks for taking our questions. I wanted to first start, maybe on reconstruction for the quarter. You guys talked about the growth that you're seeing in your top-tier accounts. Maybe if you could just parse out the overall growth you're seeing, just as you continue to gain share and that business continues to see acceleration. Thanks. Hi, it's Lisa. The recon market is up double- digits year- over- year. It's a very stable market where we've been able to make inroads due to our strong product advantages that are really designed to help the women's journey and make it easier. For us, we did also grow double digits. We continue to see that trend moving forward as well as market share gains. We've seen over the past two years, about a doubling in our market share. We anticipate that moving forward, and as I mentioned earlier, ending in the high teens, the end of 2022, and then moving into the twenties in 2023. Got it. Thanks so much. Maybe if I could just ask one for you, Andy, on operating expenses expectations, just as we think about as you guys are gearing up for limited launch in Q4 with the fat grafting technology and then as we enter into 2023 and what we should kind of expect there. Thank you. Sure. Again, it's been a great trend this year in terms of getting our OpEx to where we want it. It's based on efficiencies, not cutting into muscle by any means. Our $21.6-$2 1.7 that we saw this quarter is probably the low part. We'll be a little higher than that in Q4 just because of the launch in terms of the fat grafting launch. As we go into 2023, however, we have a lot of different efficiencies that are gonna come into play to where we expect that to continue to drop. When we do give out guidance, we will give out cash-based OpEx expectations here in the future. It's gonna be a number that's less than what we see today. We're trending at the low end of our guidance right now, but our run rate actually is at $88 million or lower per year. You know, a little bit of a precursor. We're gonna come in lower than that next year. We're working on what that number's gonna be, but we really do expect to see some great leverage in 2023 with rising revenues, lower cost, and very good cash performance. Great. Thank you all. Thank you. At this moment, we have no other questions. I would like to send the call back to our presenters for any final remarks. No, thank you, Operator. Thanks, everyone, for joining us on the call. Look forward to a great finish to 2022 and a great start with the launch of our new technology in next year. Thanks, everyone. Have a good day. Thank you. Ladies and gentlemen, this concludes today's conference. We thank you for participating. You may-