5062434 24000001688757false00016887572023-02-282023-02-28

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
February 28, 2024
Date of Report (date of earliest event reported)
Establishment Labs Holdings Inc.
(Exact name of registrant as specified in its charter)
British Virgin Islands001-3859398-1436377
(State or other jurisdiction of
incorporation or organization)		(Commission File No.)
(I.R.S. Employer
Identification Number)
Buiding B15 and 25
Coyol Free Zone
Alajuela
Costa Rica
(Address of principal executive offices) (Zip Code)
+506 2434 2400
(Registrant’s telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading symbolName of each exchange on which registered
Common Shares, No Par ValueESTA
The NASDAQ Capital Market
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2) of this chapter.
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐


Item 2.02.     Results of Operations and Financial Condition.

On February 28, 2024, Establishment Labs Holdings Inc. (the “Company”) issued a press release announcing the Company’s financial results for the three and twelve months ended December 31, 2023 and recent corporate highlights. A copy of the press release is furnished herewith as Exhibit 99.1.*
* The information in Item 2.02 of this Form 8-K shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as expressly set forth by specific reference in such a filing.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.





SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.
ESTABLISHMENT LABS HOLDINGS INC.
Dated:
February 28, 2024
By:
/s/ Rajbir S. Denhoy
Name:
Rajbir S. Denhoy
Title:
Chief Financial Officer


image83.jpg
EXHIBIT 99.1

PRESS RELEASE
Investor/Media Contact:
Raj Denhoy
415 828-1044
rdenhoy@establishmentlabs.com
Establishment Labs Reports Fourth Quarter and Full Year 2023 Financial Results and Provides 2024 Guidance
NEW YORK, NY, February 28, 2024 -- 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 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,
2023202220232022
Revenue$31,560 $43,813 $165,151 $161,700 
Cost of revenue10,975 15,648 58,174 55,105 
Gross profit20,585 28,165 106,977 106,595 
Operating expenses:
Sales, general and administrative36,880 34,846 145,575 125,984 
Research and development5,820 6,479 26,428 20,269 
Total operating expenses42,700 41,325 172,003 146,253 
Loss from operations(22,115)(13,160)(65,026)(39,658)
Interest income504 25 1,020 87 
Interest expense(4,338)(2,200)(15,393)(11,760)
Change in fair value of derivative instruments— — — 703 
Loss on extinguishment of debt— — — (19,019)
Other income (expense), net2,902 2,592 816 (3,177)
Loss before income taxes(23,047)(12,743)(78,583)(72,824)
Benefit (provision) for income taxes
2,505 (819)81 (2,385)
Net loss$(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 share26,062,724 24,457,793 25,600,029 24,457,793 


ESTABLISHMENT LABS HOLDINGS INC.
Consolidated Balance Sheets
(In thousands)

December 31,
20232022
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, respectively46,918 35,423 
Inventory, net79,471 36,583 
Prepaid expenses and other current assets8,477 11,543 
Total current assets174,901 149,904 
Long-term assets:
Property and equipment, net of accumulated depreciation77,205 51,092 
Goodwill465 465 
Intangible assets, net of accumulated amortization7,987 4,608 
Right-of-use operating lease assets, net3,381 3,702 
Other non-current assets4,702 1,290 
Total assets$268,641 $211,061 
Liabilities and shareholders’ equity (deficit)
Current liabilities:
Accounts payable$41,624 $20,034 
Accrued liabilities13,690 17,237 
Other liabilities, short-term1,836 1,688 
Total current liabilities57,150 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-current2,712 3,200 
Other liabilities, long-term1,645 1,626 
Total liabilities250,246 219,246 
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,
2023202220232022
(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)


v3.24.0.1
Cover
Feb. 28, 2023
Cover [Abstract]  
Document Type 8-K
Document Period End Date Feb. 28, 2024
Entity Registrant Name Establishment Labs Holdings Inc.
Entity Incorporation, State or Country Code D8
Entity File Number 001-38593
Entity Address, Address Line One Buiding B15 and 25
Entity Address, Address Line Two Coyol Free Zone
Entity Address, City or Town Alajuela
Entity Address, Country CR
Country Region 506
City Area Code 24
Local Phone Number 34 2400
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Common Shares, No Par Value
Trading Symbol ESTA
Security Exchange Name NASDAQ
Entity Emerging Growth Company false
Entity Central Index Key 0001688757
Amendment Flag false
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