ESTA - Earnings call transcript Q4 2018 | Establishment Labs Holdings Inc.

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Operator

Good afternoon. Welcome to Establishment Labs’ Fourth Quarter and Full Year 2018 Earnings Call. At this time, all participants will be on mute. At the end of this call, we will open the lines for a question-and-answer session and instructions will follow at that time. [Operator Instructions] As a reminder, this conference call may be recorded. to Shandwick. call like Rawlett to now Weber from would turn over the Kaitlyn I ahead. go Please

Kaitlyn Rawlett

Thank you, thank operator and today's participating call. on you everyone for

Founder and from Chief Officer. me the includes José Joining Company Executive Gaeta, Renee Chacón-Quirós, Officer; Chief Financial Juan and

would of sales. begin, caution to laws. include the management federal I made forward-looking statements timing Company's listeners forward-looking financial the will statements for this securities call materially. Before differ include outlook material comments product and within statements These and by risks Company's and the like involve we that on during the actual the Company's meaning These development and and plans may uncertainties results

I The information accurate a conference as filed will Company Executive of visit you time-sensitive be to annual to call. content With law, events call broadcast is today contains the of Chacón-Quirós. XX-K, Except Founder over this as of For by to this statement factors, XX, the the with of live which of March later discussion this SEC. the revise encourage date turn date the report or risk being only Company's José on Chief circumstances the no Form said, reflect to any update the and my that it to required Officer, call otherwise Juan after or undertakes pleasure Company's XXXX. obligation

Juan José Chacón-Quirós

to I pleased We finish increase report $XX.X to company. XXXX. compared am everyone. in with a quarter afternoon, publicly good first our a to outstanding million and year and XXXX XX.X% fourth Kaitlyn, an you, as when Thank ended sales, traded strong a

fourth a were quarter XX.X% Our of increase compared $XX.X sales to million, fourth the XXXX. quarter

invest United and markets, come. invested improved by driven be direct the in we growth the to across clinical Motiva salesforce of in across continued in In enhanced XXXX, markets. science safety In States and our to business to particular, ensure differentiated years our for Implants were to trials adoption continues many success which our our European outcomes. primarily Our all we

we our pursued improved we as pipeline. in global initiatives infrastructure multiple Additionally, our manufacturing R&D capabilities and

XX% on in color and breast market it the implant for from expect continues performance, to strategies sales, procedures. Brazil second market to for environment experienced and perform quarter. a and towards years. cycle. in Since remains time, this continue additional as here, are Some We with quarter new represents strong market approximately in entering market, our Direct We well surgeons at consistent coming have fourth share. allows on today's XXXX, penetration our market continued the of an revenues largest this be and breast percentage augmentation regulatory quarter, with communicate fourth and market world's market during come that the focused we we focus the a important market growth and consider in us XX% the impact this stages the us, of continued high increasing capturing still to directly to of follow fourth additional closely early ourselves direct and we

most recent the XXXX event that the not results. and feel meaningful While market, quarter regulatory a we about our we did on late surgeons to have talk impact started regularly the in they

patient implant share that the regulatory legacy in substantial benefits and strong regards commitment of surgeons safety breast merit products the portfolio many us is industry women. dynamics has incorporated yet the understanding with answer the The has an our that Labs breast We bodies technologies. for utmost and continued and and implant to Establishment communicate to positioned implant is and the with technology develop the confidence widespread engineering, material product of plastic meet that our founded an profile quarter our adoption to and fully to of biomedical reinforces latest Motiva a importance of to needs our of of industry in response Implants of the was years that and breast complications substantially Motiva bit fewer confidence market In need our [indiscernible] have level fourth scientific any other improved to are traditional developments discussion. and committed regulatory team latest the clearly is Implants implants. groups women or of today, world performance we the of patented textured with demonstrate believe differentiated in the to a sold highest the of both so, safety The from so our safety beyond the this it doing XXXX, implants. implant ongoing smooth to our improved quite implants R&D trust the around of result surface critical biocompatibility, an profile. regulatory to many than which Going do designing the from and technology. patients a for and concerns sciences,

unequivocally significant. share prestigious the the optimizes Also, blinded opportunity exclusive third-party and in As continue competitive surface capture XXXX, biocompatibility implants confirmed technology tissue introduce pilot that characterized In a at a LNE, founded independent the Langer to implant the many smooth patented reactions. the Lab laboratory that of and adhesion month, to our are MIT is past inflammatory through unique a are body's the cell by differentiated in you study market with surface based implant completed in testing category. in design France aware, reduces our

seek across a and see our these of times, Our improved product continue more in to distribution that natural as is new with Europe resonating both an story in expectations. Especially customers. aesthetic and a is than Brazil, an inquiries line profile key centers and about their more including influx from surgeons portfolio women safety markets, ever

aesthetic we breast in markets largest capture these considered to and with of and excited to In significant across existing opportunity markets enter geographic are of growth us in Thailand share, organic the to continued our markets, one present addition including markets Thailand Taiwan. Both market to Asia. new be XXXX, the is

which with report clinical as first aesthetic pleased are that Turning include filed announce targets and FDA, cohorts, US with enrollment now IDE to IDE revision, our a week, our primary patients, the this for United trial, past the total is and for and an annual in FDA reached This important have of XXX to and our path milestone towards devices step respectively. our to we States. augmentation the initial study-defined XXX approval a necessary of been

continuing to remaining quarter. are cohorts We believe coming are remaining and the all this of track in to targets enroll subjects meet in the on enrollment we

and are directly the and Our substantially beyond. invest XX At is XXXX efforts do so our part in new our to Mark we and future, R&D for ensure efforts success expander the submitted R&D end registration, minimally and anatomical minimally our to Ergonomix, XXXX, create our breast the we in Motiva attempts to market invasive success past CE now ongoing years equal smooth continue mark of aesthetics. to and initiatives. attributable expansion of version These initial breast surgeries a latest of within over tissue for we'll in into reconstruction our our invasive and which

platform. to as sometime are expect encouraged our by these belief the progress and procedure is Separately, bringing have developments, meaningful plan to our results certain until RFID on reported Company, financial surface implant on XXXX that made features, of was In technologies year such as we and to as we demonstrated remarkable we look we for our do our we safety had on launch continue we enhancing line on and While we reconstruction on improvements as can to contributions work It strong to bio-sensing capabilities on our not top market big deliver XXXX. forward these a of recognize impact biocompatibility strategic in conclusion, initiatives. market. a an ability cautious commitments, and our have

that that can opportunity continue across May. complete, Renee. physicians, value that, to look I am even is shareholders our to see strong those I'd not turn employees create results and forward Although over to more to to you to of patients, the the we for first excited tell quarter call lies Renee? With business, in ahead XXXX you for reporting we alike. and like yet I the growth

Renee Gaeta

I'd and us all thank to for call joining like you the today. Thank Juan again you, José, on

in with As year Juan cap a off to we very XXXX our it stated quarter. earlier, proud accomplishments of strong the and pleasure another José is are

additional today. find financials fourth Form in our earnings and our quarter file full-year release to on XXXX press our can later and plan our details XX-K, You which we

Brazil. million, fourth the for quarter representing in XX, were revenues which December represents XX.X% to when increase a when for were compared XXXX, driven fourth the our The total XX.X ending XX.X% a addressable continued by increase XX.X XXXX. the direct to improved quarter revenues the all year same average growth in Our million, was XXXX. Europe strategies fourth growth compared and Total selling alongside the markets, due quarter period market in price of across the in the volume our to primarily

to quarter in and audit when year gross revenues, XX.X SG&A XX% to revenues, the market and XXXX, model. increased XX.X our the ended new XXXX. X.X with production with pleased capturing to profit in additional of same XX% and the Gross quarter average administrative expenses our to were a sales quarter-to-quarter to XXXX. XX.X% an young fourth manage remind our XX, the as of in we and footprint, of future fourth and in as revenues investors in in to million, due as of Gross The higher employees, our are enhancements extremely for increase increase was due still and or volume X.X in consulting higher to margin expenses million contribution or for We December prices. profit mainly compared profit of and insurance ended XX.X hiring operating business share we quarter markets gross growth generally compared can direct confident year the selling of very was ability and million increase sales profit for of for the XX.X% are quarter XXXX revenues December from continued continue or million are million, beyond. or in same additional fourth an XXXX, and compared the increase we XX.X%, period the X.X or fluctuate of the We fees XX.X% XX, the Total costs. results XX.X company XXXX that quarter market million in revenues make was global of entering an million of XXXX XXXX. in fourth gross to

increased R&D in X.X to United the X.X trial to primarily XX.X%, clinical our in States. million FDA Our million, due investments expenses or

ended year For were of our in period XX the expenses operating operating XX, XXXX. XX.X same December increase to an the compared expenses million with for $XX.X million, of XXXX, million,

Net an operation. XX.X% for costs trial at fourth million, the loss needs. a primarily the of operating to clinical of FDA period is company a this in support and our States, our increase, it expanding resulting of as same growth While United operations our with quarter reflects loss year-over-year expected XXXX, initiation for X.X business the was from associated result XX.X million from increase our in continued a net public as

XXXX, the to market million change to from for XX.X For fair the the net increase our full to XX.X the geographies. same allocating bring efforts note fourth We Madryn entered our XXXX. resources our was help in XXXX. into ended attributable year of increased the our new We in facility capital credit and managed non-cash decrease from will year products XX, during that net full a effectively derivative December losses in we in the million August that share for primarily losses value to quarter, period

in will marketing key Looking to Europe. we growth forces like and our investments direct in make sales and engineering, Brazil strategic ahead, continue markets

as XX, make FDA and strong in to in have held that we intend balance investments XXXX. our product to will significant Company's States clinical trial we December a United XX.X innovation. position of million remains Additionally, The help cash in drive research cash new and continue of

potential numbers. that about said, point analysts' are indicated, at Juan the amount business. business we to comfortable organic the early this and is As That the ask see for upside meaningful time work particularly think the nature in of is implant in upside we for knowledge, for our strong XXXX environment our breast within in as given think to estimates analysts industry, consensus that you with a fluid continue very today's promising. quantifying use is growth we our growth you their of of there XXXX and this now QX the José difficult so With

Juan Juan positive issue concluding José? the turn catalysts and I'd José beyond, see additional well to XXXX we year. some remarks. for That As call on we solidify very guidance calls future the being over in this like may back said, to

Juan José Chacón-Quirós

Renee. you, Thank

We the meeting our results, are and full deliver pleased to this year. fourth for exceeding year quarter XXXX goals and

to Labs to the the a upon our will this entire we year that, of open success beyond. the the I deliver and partners am in steadfast turn operator to call the globe. the dedication will build and and With we experienced are accomplishments in growth across call confident Establishment the now XXXX Q&A. incredible back to continued work XXXX I Our testament to seen

Operator

from first Raj [Operator Denhoy Jefferies. comes question Instructions] Our of

Raj Denhoy

on with I I but you there for next guidance, the on you the end just specific quite could of I at know, year in thoughts -- thinking the be guidance at sure the not XX% top and I'm terms as would Renee, think could you're out on what more north spread had higher I you or are guys the the line, more if behind just where XX% our shaking on broad, the know just start so the analyst growth end. for perhaps of giving lower additional commentary of anything or estimates end, in appreciate helpful. where we're guidance, below helpful comfortable, more any the the don’t you do

Renee Gaeta

appreciate definitely Yes, comfortable at now. of sort the that fully point Yes, we're of focused consensus definitely that that. with time, the average in numbers. the range appreciate Raj, but I decent of this that's we're right a on I

Raj Denhoy

Okay.

So, good. midpoint you the where guys are is

Renee Gaeta

Correct.

Raj Denhoy

with as currently? little can a removing maybe all of more activity, heavily the aware, you the US the seeming been And FDA implants couple the in dynamics questions textured breast a and a Okay. about Europe breast José, focus we're of on to now -- Juan ask have I lot marketplace There's implants safety. bit

guys getting accounts is to around given of for you? seen I'm a a talk levels is that are is the -- anything the rethinking enhanced you're And competitive scrutiny -- then that from the risk wanting to seeing couple an really to or or augmentation are procedure? it lot what there previously breast any competitive increase marketplace surgeons or in women from you opening question question, now this Have standpoint, you you a the the around suggest curious So, second would creating perhaps competitive seeing this? all

Juan José Chacón-Quirós

Raj. I you, Thank No, the that's big question. and think

our We differentiated and to implants we opportunity an have and a capture in all share markets. see competitive market introduce

for this amount markets important cancel seen of that now, we influx we alone, One directly of around countries an their patients thing where we that let not where of are we inquiries now to seeing are in postponing new or, involved, But We the until of because are monitoring them. is say all have the the direct potential surgeries monitor that. can directly.

of dynamics, watchful not So, the we have seen over we remain those will reduction number potential to but in any procedures. date

Raj Denhoy

last end about one How how acquisition year. off, for towards last Okay, and Renee, numbers that's as the the just sorry, think I'll helpful. one hop revenue about Maybe the then that contributed? of much Spain that base? you here does distributors curious to the add And you Germany XXXX, has in I of for and was your but, much

Renee Gaeta

three some a acquisitions, that's that the a couple them had quarter. the good happened them of Yes, later question, fourth of in and in Raj, the of we all quarter,

dynamic. So, subsidiaries through 'XX. actually substantial working the impact working and into through up We're have obviously a setting that they of QX didn't

contribution. significant a not So,

and expecting pull we're contribution of So, in to forward. majority see really that start the XXXX

Raj Denhoy

And you that in you haven't quantified of that for have terms could us, what be?

Renee Gaeta

haven't. I No,

Operator

Josh Our comes of question Instructions] [Operator Cowen. Jennings next from

Josh Jennings

the market and year. the could from market strong is internationally when CE on new the about up it mentioned to that is follow Hi. anatomical of tissue Could version impact Thank like for era? commercialize expanders, hoping on Ergonomix it? this tissue textured? big and you Good it expander expanders submitting in CE updated commercialization. some the remarks on then have And Ergonomix, important a And you you Mark XXXX how about congratulations two most I you one could and pipeline release the ask invasive. is end minimally sounds tissue the And first, to commercialize, we expander can for I introduce how expanders tissue today on when the prepared Are you just tissue afternoon. talk submission. and the -- in was Mark to questions macro smooth press about see the

Juan José Chacón-Quirós

of focused reconstruction because Thank to super you, that have extremely ahead patients to can breast work to safety in market. in we've opportunities been are a excited much become And our course, us is aesthetics in us in that player that very for meaningful Josh. important I expander breast our tell differentiated so taken improvement testament the breast that that now, outcomes, the an technology, you breast of reconstruction. and we have in we of reconstruction. believe tissue a the has impact lie commitment for Until

SmoothSilk have years is a surface tissue expander. that that patients eight now So a last seen well so in the expander, for over performs tissue we that

we there, course, in At want undergoing but the the market, we to patients expansion. international not results point, tissue what see, this an will quantify the are products of size So improvement is who for tell of the you technologies expanders. can are macro and textured I textured the Most or out of is are other important. of say would latest companies the that I opportunity tissue that

on we to the but possible, as undergoing how there product these take. are long So, days, are hoping these and uncertainty this to we get process processes as market soon is

we market in some that start to revenue we while as possible, want the you why, will seeing be XXXX. that in that's of So, soon think as

Josh Jennings

it Without the question. market a the reconstructive you ask just through then to see tissue on significant pull with follow-up expander that next of could into quick expander, and great, Motiva just a And of Ergonomix the tissue reconstructive cases? is currently, penetrate be tough would to portion my

Juan José Chacón-Quirós

Our have to tissue have been breast the reconstruction. just possibilities we used able is because spectrum in a that been of not of that for provide need breast implants having It in years patients reconstruction. expander, not full

several prestigious and years excellent in However, have institution surgeons safety last using Europe had for excellent outcomes. some presented most from with SmoothSilk presentations And with now. they implants have European we Ergonomix of the Plus Motiva year, results who been Motiva

there more. So we opportunities expander now the see to tissue even with a continue and

Josh Jennings

be CE procedure understand what's that one, us into incremental to most changed see you natural Thanks for about Motiva procedure talk more about in in follow you of the regions? the the first submission of we Mark and minimally that. the more and being recent that And a version help procedure with when on just seemed Ergonomix a to secondly, up then how you bit technique invasive color out just can any [indiscernible] talking and done internationally and then plan roll might you countries terms can Ergonomix, of

Juan José Chacón-Quirós

to say the have implant. Thank and transformed that, that you. then so-called when you worldwide Ergonomix launched a options for anatomical we had implant implant round And I in we women XXXX, before the because

our selling now this we do are is put generation going into what Ergonomix product that become So has and of implant. to worldwide implant a best market Ergonomix second

proven side inflammatory that has other along it has properties been surface reduce to contracture capsular conditions. improved to and mechanical So, SmoothSilk this chronic

mechanical believe we well course, lends because of it of for minimally So, invasive procedures. properties, very that itself those

processes market again, current soon XXXX. But regulatory of on are and excited as the in potential environment the bring that implant new the see So those again, this to in possible. perhaps we revenues as we version are, to regulatory super counting

Operator

like any the remarks. Thank at Juan I José this you. further showing to for time. turn call not over questions back would any further to now I'm

Juan José Chacón-Quirós

today's us Thank you call. joining on everyone earnings for

please on out. speaking if do Thank any look hesitate to and have next not forward always, you As reach We you our adios. to call. with questions, earnings you follow-up

Operator

Everyone, This and day. conference. you. wonderful for gentlemen, Ladies thank participating disconnect. Thank today’s does and you conclude program in may a today’s all you have

Establishment Labs (ESTA) 20 Mar 192018 Q4 Earnings call transcript