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 second quarter ended June
30, 2024.
Second Quarter Highlights and
Outlook
- Second quarter worldwide revenue of $44.1 million.
- 2024 revenue guidance remains $174 million to $184 million, an
increase of 5% to 11% over 2023.
- Gross profit for the second quarter was $28.9 million, or 65.6%
of revenue, compared to $30.3 million, or 62.3% of revenue in the
year-ago period.
- Second quarter loss from operations was $9.3 million compared
to a loss of $13.7 million in the year-ago period.
- Adjusted EBITDA loss of $4.3 million compared to a loss of $9.3
million in the year-ago period.
- Cash balance of $54.6 million as of June 30, 2024.
- FDA PMA preapproval inspection completed July 26, 2024.
- FDA approval of Motiva Implants expected shortly.
“The strong sequential revenue growth of 18.7% in the second
quarter is an important achievement as we return to growth. We also
saw the tangible results of our efforts to reduce our expense base,
with adjusted EBITDA improving to a loss of $4.3 million, less than
half the loss we saw in the year ago period,” said Juan José
Chacón-Quirós, Chief Executive Officer.
“Late last month, the U.S. FDA completed the PMA preapproval
inspection of our manufacturing facility. We expect approval of
Motiva Implants in the United States soon,” Mr. Chacón-Quirós
continued. “Our launch in the U.S. will be a watershed event in our
journey to transform breast aesthetics and reconstruction. The new
standard we have set for clinical and aesthetic outcomes in these
categories will now be available to women and surgeons in the
largest market in the world. We are on a clear path for global
market leadership and have many years of strong and healthy growth
ahead of us.”
Second Quarter 2024 Financial
Results
Total revenue for the quarter ended June 30, 2024 was $44.1
million compared to $48.6 million for the same period in 2023.
Gross profit for the second quarter was $28.9 million, or 65.6%
of revenue, compared to $30.3 million, or 62.3% of revenue, for the
same period in 2023. The increase in gross profit margin was
primarily driven by geographic mix and higher average selling
prices.
Total operating expenses for the second quarter were $38.3
million, a decrease of $5.7 million compared to $44.0 million in
the second quarter of 2023.
SG&A expenses for the second quarter decreased approximately
$4.2 million to $32.8 million compared to $37.0 million in the
second quarter of 2023. The decrease in SG&A was primarily the
result of the cost reduction initiatives, including headcount
reductions.
R&D expenses decreased approximately $1.4 million to $5.5
million in the second quarter compared to $6.9 million for the same
quarter a year ago. The decrease was primarily due to reductions in
personnel costs.
Net loss for the second quarter was $17.2 million compared to a
net loss of $16.7 million in the year ago period.
The Company’s cash balance on June 30, 2024 was $54.6 million.
Cash increased $14.6 million from December 31, 2023, primarily as a
result of the private placement offering completed on January 9,
partially offset by operating losses and investments in the new
manufacturing facility.
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 (800) 715-9871 (U.S. and
Canada) or (646) 307-1963 (international) and using conference ID
number 7160745. 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.
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
income and 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 reasonably 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-K filed on March 4, 2024 and
will be discussed in the company's quarterly report on Form 10-Q
that will be filed on August 7, 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)
(Unaudited)
Three Months Ended June
30,
Six Months Ended June
30,
2024
2023
2024
2023
Revenue
$
44,117
$
48,561
$
81,284
$
95,085
Cost of revenue
15,181
18,300
27,968
34,745
Gross profit
28,936
30,261
53,316
60,340
Operating expenses:
Sales, general and administrative
32,792
37,027
61,733
68,733
Research and development
5,488
6,947
9,761
13,480
Total operating expenses
38,280
43,974
71,494
82,213
Loss from operations
(9,344
)
(13,713
)
(18,178
)
(21,873
)
Interest income
556
170
1,044
245
Interest expense
(5,186
)
(3,620
)
(9,567
)
(7,376
)
Other income (expense), net
(2,779
)
1,343
(5,816
)
2,072
Loss before income taxes
(16,753
)
(15,820
)
(32,517
)
(26,932
)
Provision for income taxes
(428
)
(925
)
(866
)
(1,755
)
Net loss
$
(17,181
)
$
(16,745
)
$
(33,383
)
$
(28,687
)
Basic and diluted net loss per share
$
(0.62
)
$
(0.65
)
$
(1.21
)
$
(1.14
)
Weighted average outstanding shares used
for basic and diluted net loss per share
27,905,614
25,615,444
27,679,832
25,144,375
ESTABLISHMENT LABS HOLDINGS
INC.
Consolidated Balance
Sheets
(In thousands)
June 30, 2024
December 31,
2023
(Unaudited)
Assets
Current assets:
Cash
$
54,600
$
40,035
Accounts receivable, net of allowance for
credit losses of $2,019 and $1,841
59,982
46,918
Inventory, net
64,213
79,471
Prepaid expenses and other current
assets
7,337
8,477
Total current assets
186,132
174,901
Long-term assets:
Property and equipment, net of accumulated
depreciation
79,546
77,205
Goodwill
465
465
Intangible assets, net of accumulated
amortization
10,041
7,987
Right-of-use operating lease assets,
net
3,717
3,381
Other non-current assets
5,187
4,702
Total assets
$
285,088
$
268,641
Liabilities and shareholders’
equity
Current liabilities:
Accounts payable
$
28,420
$
41,624
Accrued liabilities
11,812
13,690
Other liabilities, short-term
1,660
1,836
Total current liabilities
41,892
57,150
Long-term liabilities:
Note payable, net of debt discount and
issuance costs
193,732
188,739
Operating lease liabilities,
non-current
2,989
2,712
Other liabilities, long-term
1,456
1,645
Total liabilities
240,069
250,246
Shareholders’ equity:
Total shareholders’ equity
45,019
18,395
Total liabilities and shareholders’
equity
$
285,088
$
268,641
ESTABLISHMENT LABS HOLDINGS
INC.
Reconciliation of EBITDA and
Adjusted EBITDA
(In thousands)
(Unaudited)
The following is a reconciliation of net
loss to EBITDA and Adjusted EBITDA:
Three Months Ended June
30,
Six Months Ended June
30,
2024
2023
2024
2023
Net loss
$
(17,181
)
$
(16,745
)
$
(33,383
)
$
(28,687
)
Interest expense
(5,186
)
(3,620
)
(9,567
)
(7,376
)
Interest income
556
170
1,044
245
Provision for income taxes
(428
)
(925
)
(866
)
(1,755
)
Depreciation and amortization
(1,268
)
(947
)
(2,690
)
(1,883
)
EBITDA
(10,855
)
(11,423
)
(21,304
)
(17,918
)
Stock compensation expense
(3,757
)
(3,616
)
(7,202
)
(6,940
)
Foreign currency gain (loss)
(2,764
)
1,460
(5,783
)
2,379
Adjusted EBITDA
$
(4,334
)
$
(9,267
)
$
(8,319
)
$
(13,357
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240806138099/en/
Investor/Media Contact: Raj Denhoy 415 828-1044
rdenhoy@establishmentlabs.com
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