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 third quarter ended
September 30, 2023.
Third Quarter Highlights and
Outlook
- Third quarter worldwide revenue of $38.5 million increased 0.8%
year-over-year.
- 2023 revenue guidance updated to approximately $165 million, an
increase of 2% over 2022.
- Third quarter loss from operations was $21.0 million compared
to a loss of $10.5 million in the year-ago period.
- Cash balance of $52.2 million as of September 30, 2023.
- U.S. FDA clearance of the Motiva Flora® SmoothSilk® Tissue
Expander on October 13.
- Released data from Mia Femtech™ clinical study showing no
capsular contracture, rupture, or bleeding at two-years.
“Our results in the third quarter and updated guidance reflect
lower demand for breast procedures globally,” said Juan José
Chacón-Quirós, Chief Executive Officer. “Both precedent and our
experience suggest cycles of reduced demand in our industry are
transitory. While we still expect China approval in 2023, at this
point in the year we have removed it from our forecasts; this makes
up about a third of our change in guidance. With our core platform
and our pipeline of new products, we are taking market share
globally — and this should continue through the remainder of 2023
and into 2024.”
“We are taking steps during this period to prioritize our
near-term growth initiatives, namely the launch of Motiva into the
US and China, and the global rollout of Mia Femtech,” Mr.
Chacón-Quirós continued. “We are making meaningful progress on all
fronts, including the approval of Motiva Implants in the United
States. The recent clearance of the Motiva Flora SmoothSilk Tissue
Expander in the U.S. is only the first of what we expect will be a
number of meaningful developments over the coming months. We expect
strong growth for many years to come and we have a very solid
foundation on which to build in 2024. We remain highly confident in
the target we offered earlier this year of $500 million in revenue
in 2026.”
Third Quarter 2023 Financial
Results
Total revenue for the quarter ended September 30, 2023 was $38.5
million compared to $38.2 million for the same period in 2022.
Direct sales comprised approximately 54% of total sales, while
distributor sales made up the balance.
Gross profit for the third quarter was $26.1 million, or 67.7%
of revenue, compared to $26.0 million, or 68.1% of revenue, for the
same period in 2022.
Total operating expenses for the third quarter were $47.1
million, an increase of $10.5 million compared to $36.6 million in
the third quarter of 2022.
SG&A expenses for the third quarter increased approximately
$8.7 million to $40.0 million compared to $31.3 million in the
third quarter of 2022. The increase in SG&A was primarily due
to costs associated with investment in growth initiatives and
expanding operations.
R&D expenses increased approximately $1.8 million to $7.1
million in the third quarter compared to $5.3 million for the same
quarter a year ago. The increase was primarily due to an increase
in personnel, compliance and regulatory costs.
Net loss for the third quarter was $29.3 million compared to a
net loss of $18.6 million in the year ago period.
The Company’s cash balance on September 30, 2023 was $52.2
million. Cash decreased $14.2 million from December 31, 2022,
primarily as a result of increases in inventory and accounts
receivable, and investments in new facility construction offset by
the 1.265 million share follow-on offering completed on April
27.
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 13742370. In addition, the live and archived webcast will be
available in 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.
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-K filed on March 1, 2023 and
will be discussed in the company's quarterly report on Form 10-Q
that will be filed on November 8, 2023, 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)
(Unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2023
2022
2023
2022
Revenue
$
38,506
$
38,245
$
133,591
$
117,887
Cost of revenue
12,454
12,205
47,199
39,457
Gross profit
26,052
26,040
86,392
78,430
Operating expenses:
Sales, general and administrative
39,962
31,268
108,695
91,138
Research and development
7,128
5,289
20,608
13,790
Total operating expenses
47,090
36,557
129,303
104,928
Loss from operations
(21,038
)
(10,517
)
(42,911
)
(26,498
)
Interest income
271
10
516
62
Interest expense
(3,679
)
(3,880
)
(11,055
)
(9,560
)
Change in fair value of derivative
instruments
—
—
—
703
Other expense, net
(4,158
)
(3,618
)
(2,086
)
(5,769
)
Loss on extinguishment of debt
—
—
—
(19,019
)
Loss before income taxes
(28,604
)
(18,005
)
(55,536
)
(60,081
)
Provision for income taxes
(669
)
(603
)
(2,424
)
(1,566
)
Net loss
$
(29,273
)
$
(18,608
)
$
(57,960
)
$
(61,647
)
Basic and diluted net loss per share
$
(1.12
)
$
(0.76
)
$
(2.28
)
$
(2.53
)
Weighted average outstanding shares used
for basic and diluted net loss per share
26,034,185
24,511,495
25,444,155
24,406,389
ESTABLISHMENT LABS HOLDINGS
INC.
Consolidated Balance
Sheets
(In thousands)
September 30,
2023
December 31,
2022
(Unaudited)
Assets
Current assets:
Cash
$
52,190
$
66,355
Accounts receivable, net of allowance for
doubtful accounts of $1,459 and $741
54,693
35,423
Inventory, net
67,935
36,583
Prepaid expenses and other current
assets
11,903
11,543
Total current assets
186,721
149,904
Long-term assets:
Property and equipment, net of accumulated
depreciation
72,642
51,092
Goodwill
465
465
Intangible assets, net of accumulated
amortization
5,705
4,608
Right-of-use operating lease assets,
net
3,561
3,702
Other non-current assets
1,439
1,290
Total assets
$
270,533
$
211,061
Liabilities and shareholders’ equity
(deficit)
Current liabilities:
Accounts payable
$
28,928
$
20,034
Accrued liabilities
19,388
17,237
Other liabilities, short-term
1,986
1,688
Total current liabilities
50,302
38,959
Long-term liabilities:
Note payable, net of debt discount and
issuance costs
185,321
175,461
Operating lease liabilities,
non-current
2,918
3,200
Other liabilities, long-term
1,505
1,626
Total liabilities
240,046
219,246
Shareholders’ equity (deficit):
Total shareholders’ equity (deficit)
30,487
(8,185
)
Total liabilities and shareholders’ equity
(deficit)
$
270,533
$
211,061
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231107459803/en/
Investor/Media Contact: Raj Denhoy 415-828-1044
rdenhoy@establishmentlabs.com
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