Establishment Labs Holdings Inc. (NASDAQ: ESTA), a global
medical technology company dedicated to improving women’s health
and wellness, principally in breast aesthetics and reconstruction,
today announced financial results for the fourth quarter and full
year ended December 31, 2023 and provided 2024 guidance.
Fourth Quarter Highlights and
Outlook
- 2024 revenue guidance of $174 million to $184 million, an
increase of 5% to 11% over 2023. Guidance does not include revenue
from Motiva Implants® in the United States, which is expected in
2024.
- Fourth quarter revenue of $31.6 million, consistent with
preannouncement on January 9.
- Fourth quarter net loss from operations of $22.1 million
compared to a net loss of $13.2 million in the year-ago
period.
- Proforma cash balance of $90 million after $50 million private
placement on January 9.
- Positive amendment to Oaktree credit facility on February 22
with access to up to $50 million after FDA approval.
- Launched Motiva Implants® in China.
- First U.S. Commercial Procedure with Motiva Flora® Tissue
Expander.
- Continued progress with FDA on approval of Motiva
Implants®.
“Our markets are stabilizing and we are seeing improving
demand,” said Juan José Chacón-Quirós, Chief Executive Officer.
“Our global market checks suggest that we will have continued
improvement throughout 2024. During this period, we have taken
meaningful steps to reduce our expenses and cash use. We have also
secured our balance sheet with the recent $50 million private
placement and the amendment of our credit facility. Creating
shareholder value is of the utmost importance to us, and we remain
acutely focused on achieving positive adjusted EBITDA later this
year and becoming cash flow positive in 2025.”
“2024, the 20th anniversary of our founding, is a pivotal year
for Establishment Labs," Mr. Chacón-Quirós continued. “With
approval of our implants in China and the pending approval in the
US, we are becoming a true global player in our industry. Our
highly differentiated technologies position us well for multi-year
growth, and we are poised to take global market leadership in an
industry that has not seen meaningful innovation in decades.”
Fourth Quarter 2023 Financial
Results
Total revenue for the quarter ended December 31, 2023 was $31.6
million compared to $43.8 million for the same period in 2022.
Gross profit for the fourth quarter was $20.6 million, or 65.2%
of revenue, compared to $28.2 million, or 64.3% of revenue, for the
same period in 2022.
Total operating expenses for the fourth quarter were $42.7
million, an increase of $1.4 million compared to $41.3 million in
the fourth quarter of 2022.
SG&A expenses for the fourth quarter increased approximately
$2.1 million to $36.9 million compared to $34.8 million in the
fourth quarter of 2022. The increase in SG&A was primarily due
to costs associated with investment in growth initiatives and
expanding operations offset by expense reductions.
R&D expenses declined approximately $0.7 million to $5.8
million in the fourth quarter compared to $6.5 million for the same
quarter a year ago. The decline was due to the timing of regulatory
and compliance costs and cost reduction initiatives.
Net loss from operations for the fourth quarter was $22.1
million compared to a net loss of $13.2 million in the year ago
period.
Adjusted EBITDA for the fourth quarter was a loss of $17.3
million compared to a loss of $8.9 million in the year ago
period.
The Company’s cash balance on December 31, 2023 was $40.0
million. Cash decreased $26.3 million from December 31, 2022 and
$12.2 million from the prior quarter, primarily as a result of
operating activities and investments in new facilities offset by
expense reduction initiatives and the Company's share offering on
April 27, 2023.
Conference Call and Webcast
Information
Establishment Labs will host a conference call and webcast today
at 4:30 p.m. Eastern Time to discuss its financial results. The
conference call can be accessed by dialing (877) 407-8037 (U.S. and
Canada) or (201) 689-8037 (international) and using conference ID
number 13744589. In addition, the live and archived webcast will be
available on the Investor Relations section of the Company's
website at www.establishmentlabs.com.
About Establishment Labs
Establishment Labs Holdings Inc. is a global medical technology
company dedicated to improving women’s health and wellness through
the power of science, engineering, and technology. The Company
offers a portfolio of Femtech solutions for breast health, breast
aesthetics and breast reconstruction. The over three million
Motiva® devices Establishment Labs has delivered to plastic and
reconstructive surgeons since 2010 have created a new standard for
safety and patient satisfaction in the over 85 countries in which
they are available. The Motiva Flora® tissue expander is used to
improve outcomes in breast reconstruction following breast cancer
and it is the only regulatory-approved expander in the world with
an integrated port using radio-frequency technology that is MRI
conditional. Mia Femtech™, Establishment Lab’s unique minimally
invasive experience for breast harmony, is the Company’s most
recent breakthrough innovation. These solutions are supported by
over 200 patent applications in 25 separate patent families
worldwide and over 50 scientific studies and publications in peer
reviewed journals. Establishment Labs manufactures at two
facilities in Costa Rica compliant with all applicable regulatory
standards under ISO13485:2016 and FDA 21 CFR 820 under the MDSAP
program. In 2018, the Company received an investigational device
exemption (IDE) from the FDA for Motiva Implants® and began a
clinical trial to support regulatory approval in the United States.
Please visit our website for additional information at
www.establishmentlabs.com.
Establishment Labs' Motiva silicone gel-filled implants are
currently not approved for commercial distribution in the United
States. The Company’s implants are undergoing PMA clinical
investigation pursuant to U.S. FDA regulations for investigational
medical devices.
Non-GAAP Financial
Measures
To supplement our financial results presented in accordance with
GAAP, this release includes the following measures defined by the
Securities and Exchange Commission as non-GAAP financial measures:
EBITDA and Adjusted EBITDA. These non-GAAP measures are not based
on any comprehensive set of accounting rules or principles and
should not be considered a substitute for, or superior to,
financial measures calculated in accordance with GAAP, and may be
different from non-GAAP measures used by other companies, limiting
the usefulness of the measures for comparison with other
companies.
EBITDA is defined as net income or loss excluding: (1) interest
expense; (2) provision for income taxes; and (3) depreciation and
amortization. We consider EBITDA useful to an investor in
evaluating and facilitating comparisons of our operating
performance between periods by removing the impact of our capital
structure (primarily interest expense) and asset base (primarily
depreciation and amortization) from our operating results.
We also present Adjusted EBITDA which includes additional
adjustments for items such as other non-cash charges, gains or
losses on extinguishment of debt, share-based compensation and
foreign currency gains and losses. We believe that Adjusted EBITDA
provides useful supplemental information to investors regarding our
ongoing operating performance that, when considered with net income
and EBITDA, is beneficial to an investor's understanding of our
performance.
We believe disclosure of this information is also useful to
investors as it provides insight into the earnings that management
uses to make strategic decisions. These non-GAAP financial measures
should be considered along with, but not as alternatives to, net
income or loss as prescribed by GAAP as a measure of our operating
performance. EBITDA and Adjusted EBITDA do not represent cash
generated from operating activities under GAAP and should not be
considered as alternatives to cash flows from operations or any
other operating performance measure prescribed by GAAP. These
measures are not measures of our liquidity, nor are indicative of
funds available to fund our cash needs. These measurements do not
reflect cash expenditures for long-term assets and other items that
have been and will be incurred. EBITDA and Adjusted EBITDA may
include funds that may not be available for management’s
discretionary use due to functional requirements to conserve funds
for capital expenditures, property acquisitions, and other
commitments and uncertainties.
Please see “Reconciliation of EBITDA and Adjusted EBITDA” for a
reconciliation of these measures to net income (loss), the most
directly comparable financial measure. This release also includes
information about our expectations regarding Adjusted EBITDA on a
forward-looking basis. We have not provided a reconciliation of
such forward-looking Adjusted EBITDA information because a
reconciliation of such measure to our expected GAAP net income
(loss) on a forward-looking basis is not available without
unreasonable efforts. The timing or amount of various reconciling
items that would impact the forward-looking expectations for this
non-GAAP financial measure are uncertain, depend on various factors
and cannot be reasonable predicted. Such unavailable information
could be material to our results computed in accordance with U.S.
GAAP.
Forward-Looking
Statements
This press release contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”). You can find many (but not all) of
these statements by looking for words such as “approximates,”
“believes,” “expects,” “anticipates,” “estimates,” “intends,”
“plans,” “intends to,” “would,” “will,” “may” or other similar
expressions in this press release. Any statements that refer to
projections of our future financial or operating performance,
anticipated trends in our business, our goals, strategies, focus
and plans, including related product development and
commercialization and regulatory approvals, and other
characterizations of future events or circumstances, including
statements expressing general optimism about future operating
results, related to the company’s performance are forward-looking
statements. We claim the protection of the safe harbor contained in
the Private Securities Litigation Reform Act of 1995. We caution
investors that any forward-looking statements presented in this
report, or that we may make orally or in writing from time to time,
are expressions of our beliefs and expectations based on currently
available information at the time such statements are made. Such
statements are based on assumptions, and the actual outcome will be
affected by known and unknown risks, trends, uncertainties, and
factors that are beyond our control. Although we believe that our
assumptions are reasonable, we cannot guarantee future performance,
and some will inevitably prove to be incorrect. As a result, our
actual future results and the timing of events may differ from our
expectations, and those differences may be material. Factors, among
others, that could cause actual results and events to differ
materially from those described in any forward-looking statements
include risks and uncertainties relating to: our ability to
successfully, timely and cost-effectively develop, seek and obtain
regulatory clearance for and commercialize our product offerings;
the rate of adoption of our products by healthcare providers or
other customers; the success of our marketing initiatives; the safe
and effective use of our products; our ability to protect our
intellectual property; our future expansion plans and capital
allocation; our ability to expand upon and/or secure sources of
credit or capital; our ability to develop and maintain
relationships with qualified suppliers to avoid a significant
interruption in our supply chains; our ability to attract and
retain key personnel; our ability to scale our operations to meet
market demands; the effect on our business of existing and new
regulatory requirements; and other economic and competitive
factors. These and other factors that could cause or contribute to
actual results differing materially from our expectations include,
among others, those risks and uncertainties discussed in the
company’s annual report on Form 10-Q filed on November 7, 2023 and
will be discussed in the company's quarterly report on Form 10-K
that will be filed on February 29, 2024, which risks and
uncertainties may be updated in the future in other filings made by
the company with the Securities and Exchange Commission. The risks
included in those documents are not exhaustive, and additional
factors could adversely affect our business and financial
performance. We operate in a very competitive and rapidly changing
environment. New risk factors emerge from time to time, and it is
not possible for us to predict all such risk factors, nor can we
assess the impact of all such risk factors on our business or the
extent to which any factor, or combination of factors, may cause
actual results to differ materially from those contained in any
forward-looking statements. We are not undertaking any obligation
to update any forward-looking statements. Accordingly, investors
should use caution in relying on past forward-looking statements,
which are based on known results and trends at the time they are
made, to anticipate future results or trends.
ESTABLISHMENT LABS HOLDINGS
INC. Consolidated Statements of Operations (In thousands, except
share and per share data)
Three Months Ended December
31,
Year Ended December
31,
2023
2022
2023
2022
Revenue
$
31,560
$
43,813
$
165,151
$
161,700
Cost of revenue
10,975
15,648
58,174
55,105
Gross profit
20,585
28,165
106,977
106,595
Operating expenses:
Sales, general and administrative
36,880
34,846
145,575
125,984
Research and development
5,820
6,479
26,428
20,269
Total operating expenses
42,700
41,325
172,003
146,253
Loss from operations
(22,115
)
(13,160
)
(65,026
)
(39,658
)
Interest income
504
25
1,020
87
Interest expense
(4,338
)
(2,200
)
(15,393
)
(11,760
)
Change in fair value of derivative
instruments
—
—
—
703
Loss on extinguishment of debt
—
—
—
(19,019
)
Other income (expense), net
2,902
2,592
816
(3,177
)
Loss before income taxes
(23,047
)
(12,743
)
(78,583
)
(72,824
)
Benefit (provision) for income taxes
2,505
(819
)
81
(2,385
)
Net loss
$
(20,542
)
$
(13,562
)
$
(78,502
)
$
(75,209
)
Basic and diluted net loss per share
$
(0.79
)
$
(0.55
)
$
(3.07
)
$
(3.08
)
Weighted average outstanding shares used
for basic and diluted net loss per share
26,062,724
24,457,793
25,600,029
24,457,793
ESTABLISHMENT LABS HOLDINGS
INC. Consolidated Balance Sheets (In thousands)
December 31,
2023
2022
Assets
Current assets:
Cash
$
40,035
$
66,355
Accounts receivable, net of allowance for
doubtful accounts of $1,841 and $741 at December 31, 2023 and 2022,
respectively
46,918
35,423
Inventory, net
79,471
36,583
Prepaid expenses and other current
assets
8,477
11,543
Total current assets
174,901
149,904
Long-term assets:
Property and equipment, net of accumulated
depreciation
77,205
51,092
Goodwill
465
465
Intangible assets, net of accumulated
amortization
7,987
4,608
Right-of-use operating lease assets,
net
3,381
3,702
Other non-current assets
4,702
1,290
Total assets
$
268,641
$
211,061
Liabilities and shareholders’ equity
(deficit)
Current liabilities:
Accounts payable
$
41,624
$
20,034
Accrued liabilities
13,690
17,237
Other liabilities, short-term
1,836
1,688
Total current liabilities
57,150
38,959
Long-term liabilities:
Note payable, Oaktree, net of debt
discount and issuance costs
188,739
175,461
Madryn put option
—
—
Operating lease liabilities,
non-current
2,712
3,200
Other liabilities, long-term
1,645
1,626
Total liabilities
250,246
219,246
Shareholders’ equity (deficit):
Total shareholders’ equity (deficit)
18,395
(8,185
)
Total liabilities and shareholders’ equity
(deficit)
$
268,641
$
211,061
Reconciliation of
EBITDA and Adjusted EBITDA The following is a
reconciliation of net loss to EBITDA and Adjusted EBITDA:
Three Months Ended December
31,
Year Ended December
31,
2023
2022
2023
2022
(in thousands)
Net loss
$
(20,542
)
$
(13,562
)
$
(78,502
)
$
(75,209
)
Interest expense
(4,338
)
(2,200
)
(15,393
)
(11,760
)
Benefit (provision) for income taxes
2,505
(819
)
81
(2,385
)
Depreciation and amortization
(1,222
)
(989
)
(4,166
)
(3,870
)
EBITDA
(17,487
)
(9,554
)
(59,024
)
(57,194
)
Stock compensation expense
(3,452
)
(3,261
)
(14,362
)
(13,358
)
Change in fair value of derivative
instruments
—
—
—
703
Loss on extinguishment of debt
—
—
—
(19,019
)
Foreign currency gains (losses)
3,285
2,653
1,848
(2,982
)
Adjusted EBITDA
$
(17,320
)
$
(8,946
)
$
(46,510
)
$
(22,538
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240228040413/en/
Investor/Media Contact: Raj Denhoy 415-828-1044
rdenhoy@establishmentlabs.com
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