ESTA - Earnings call transcript Q1 2019 | Establishment Labs Holdings Inc.

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Operator

Good morning. Welcome to Establishment Labs First Quarter 2019 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 is being recorded. call Kaitlyn the Shandwick. from turn now over Rawlett to Weber I'll go Please ahead.

Kaitlyn Rawlett

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

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

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

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

Juan José Chacón-Quirós

year. pleased a strong report to first and am start Thank I Kaitlyn, and to everyone. you, the morning, good quarter

and strong increased of high XX.X%. driven worldwide. our our Establishment revenue is of performance first Labs of the direct Implants, million adoption sales ongoing a record Motiva the increase XXXX, quarter performance $XX.X for continued by This distributors For representing year-over-year is the a was effort of and

did enthusiastic existing fourth with started demand women's from in reduction our we for Even about to not health. increasingly of to customers. differentiated the volumes. and Motiva informed quarter continue and that in industry Implants We and the surgical and see commitment products surgeons a Patients our are new XXXX, see both strong headwinds

Motiva surgeons We increased part continue new to their of attract patient adopting can in and consistent practice inquiries. feedbacks Implants as that received result

experienced $XX we are anticipate of $XX first With now million million. the range XXXX the issuing and to in revenues the continued momentum guidance quarter, in

with experienced and In remain focused across shareholder increased We value share pleased share our years quarter, come. are and our market market very business expanding growth for We highlights. on all to first regions. delivering

product who portfolio, advanced of surgeons a incorporates implants. have Our wide sciences, which is material variety many attracting used

in and worldwide. expand in February to our continue now geographic available We Motiva XX than of and are commercially commercial performance the regulatory our contribute We for approval continued in to from these direct received our countries meaningful and and the are Thailand, salesforce quarter. Motiva more growth footprint in Europe, Taiwan now The our Implants Implants launch in quarter. markets first preparing the to in current to launch in XXXX launch in resulted

Our direct be ability than Brazil. with is on our vital the Europe ever across surgeons and working closely markets ground, more in to

our of Brazil direct total comprised we report, we market our For grow accounted XXX to to quarter. revenue. revenues to total over for expect account saw well. continued quarter perform continue our activated new Brazil XX% the Brazilian first XX% conversion XXXX. more quarter, our figure revenue than this to the first The first in According market and in in of

from contractors. business, of members XX sales dedicated for Brazil XX% global market our of the XX procedures, second-largest the ongoing during sales success team we potential. to more is world the growth worldwide augmentation our growth in breast and by team our expanded To support indicative than As our the in quarter

President of announce respectively. surgery in Europe. to I also They would as this to to Operations Executive like experiences in Ivan Commercial Plastic another growth. note, Carole moment Of We expert Aesthetic benefits as our industry. breast our peer-reviewed and take one Vice and Surgery bring sixth-generation consensus implants. continued notably, Director across the published Allergan Journal silicone a Most from talents Motiva Senior of Chan, in surgeons attract sources about Implant Bilic, teaching POLYTECH accomplished Sales Implants strongest the of breast as remains of one the of Motiva disclosed the

expert We practitioners are planning help techniques. selection, confident will surgical that and preoperative consensus with implant this

a and extensive experiences number more Motiva, results. and their more will As regarding need with experience publish expected surgeons we

we as to advantages part educate MotivaImagine XX advancement and in our surgeon to we workshops expansion hosting benefits and and continued pleased portfolio gears surgeons the and Motiva pipeline. As expanded report Through products. of education I the This to including progress them on Brazil. more community, our our am year, Implants the regulatory our are portfolio. on to product product than of efforts XXX month these, have work MotivaEDGE. known educate ongoing worldwide, medical program directly we our last Shifting with of

We trial. are our with progressing clinical FDA

XXX We for primary cohorts, of revision our patient augmentation with have XXX enrollment completed enrollment and respectively. and total which a aesthetic include

invasive implants patients discuss expander these CE-Mark surgery the approval shortly. Motiva is modified to submitted expect the actively team like Motiva to we Flu minimally I'd in R&D begin reconstruction portfolio. and on We product to is and to our to efforts and for enrolling cohorts our still working call our products and turn financials reconstruction for to We additions EU Furthermore, breast detail. in the are enrollment over tissue This XXXX. of in growth body. to Ergonomix to that, anticipate Renee our the With completing to start breast Renee? our contribute

Renee Gaeta

José. Juan you, Thank

have stated XXXX to happy we strong our quarter momentum first Juan results. into are in report José carried XXXX As earlier, and

earnings plan details to Form find additional first quarter can You we our and of later financials in our our XX-Q, file which today. press release

revenues a to XX.X% XXXX. million, the represents when of for quarter increase first were Our total quarter $XX.X the which compared first

selling are quarter quarter due in by acquisitions, a the increase quarter. continued to direct first highest distributors sales prior this across amortization Total say by operating growth our XX.X% revenues, alongside of for selling and prices gross We organic recorded average of for geographies quarter values our direct the of of the margin improved quarter market fourth and for related offset first profit XXXX by our was by higher revenue market approximately the XX% in asset compared from Gross for when to prices, volume the inventory the the The increased the that from the gross generally production of for was result Labs. or the which during average are our was amortization very first have fair growing during quarter markets margins first million, quarter decreased strategy driven Establishment pleased and quarter growth $XX.X in to compared profit quarter expenses total of the Europe. XX.X% period. XXXX. of or million XXXX. increase in first to The revenues, XX.X% key an million revenue as the The $XX.X $X.X gross were of to Brazil recorded

growth freight an While are additional marketing $X.X an to hiring making well related we increase investments or insurance. million, primarily expenses employees, as of necessary administrative $XX.X marketing and increased working we and stage our in a expenses, ensure due in to our to the as costs sales, to activities, are million result as personnel XX.X% SG&A long-term expenses trajectory. early to and company manage still consultants,

to $X.X expenses to personnel million in of R&D due the same million costs FDA loss Our quarter million, in $XX.X $X.X XX.X% $X.X our increase an our support of in and to result first investments a increased trial. period in increase primarily or increase from operations an market the was growth Net expected million our XXXX as XXXX, of in demand. our continued for

balance $XX.X XXXX. We million as position a held remains Our XX, of of cash cash strong. March

to our capital continue our efforts We market will first resources share. for the quarter, that increase manage allocating to

today. Our cash position is strong

reserves – as impact our the future having includes plans financial financial strong well. Our in

Our financial our quarter our and to and in increase access performance our enhanced are interest working while extending the rate. we debt prudently capacity, operational reducing lower borrowing second to capital and cost has maturities

make to marketing in strategic sales. our direct investments Looking manufacturing, will ahead, and we continue

Additionally, we innovation. in that drive clinical significant other R&D our and initiatives investments continue FDA in to make help trial product

$XX mentioned, turn Juan the José the full-year in for now I of to over Juan we concluding some $XX back Juan will to call million anticipate XXXX. revenues for As the José? range José million remarks.

Juan José Chacón-Quirós

the markets, great momentum. and on to XXXX in breast We expanding be our innovation mission, and much there reconstruction driving bringing we of launch our multiple ahead the safer a catalysts is is outcomes. needed our continuing will that can remain We will patients aesthetic markets, start. improve recognized to direct entering this to existing serve off and products products and new Renee. believe choice patients market surgeons that breast aesthetic are surgeons believe by on a maintain Thanks, are model With we us to strategy sales alike focused and growth and reconstruction. in better organic focused where this is our our new innovative aesthetics would allow

I cylinders on With a the to over to for record and this our the hand believe our market we that, to all testament differentiated are reported portfolio. firing our will share call product is win Q&A. We sales ability quarter with operator

Operator

And Instructions] Jefferies. Denhoy first Raj from question [Operator you. our Thank comes with

open. Your line is

Raj Denhoy

that share if that market to can you to what's the sort quarter. as there the start And available? Hi. of Maybe to I just results and with now market you're Good strong accounts playing number Europe and well? anything Juan recalls, curious can anything share so terms and Brazil happened amount about France into of terms how been I'm the on share morning. of itself dynamics. lot the started in Clearly the us any reaching up a there's out of dislocation you José, you of terms in in can in of be with you Congratulations open with seeing? strong are asked that's of in with has Is

Juan José Chacón-Quirós

you by lot adoption driven is Raj see that Motiva like a clear previous growth from same that in innovation reason primarily Revenue you growth of in the it to is behind was QX just of us, Well, years. the Implants. saw continued that

a from our coming see of direct it You efforts and distributors. from sales lot also

just over have for that in the markets, surgical affected a optimism the could market reduction the quarter our do prospect. volume. reinforces think last certain we think but dynamics see long-term not I Company's that did We

FDA quarters. behind us gives and ANSM the both that execute to panels with in that the us, think need our confidence plan just it we on we just So coming

Raj Denhoy

right, something guess reached been dislocation still anything to such France. number of there of volume started are it we have there new that people sales also to of in sense can perhaps has an to part going to the that out I that Great. share dynamic you or amazing your a out can maybe that that go. with the of accounts results recalls now in in that has you though the looking help expect new terms Is or play for places forward? whether is Has

Juan José Chacón-Quirós

think I going light years public fact But for it really surgeons, became the very for with for as investor the been this ANSM has well that to for and the many plastic in it that patients. FDA brought community. Well, many panels, on

So such themselves we become it's are to few on think thing, to the have available. years. the safety to instruct We that that going seen demand products that time new of going accounts a more patients for who it's last a reaction from are public from have the the have fact

think those adoption reasons. health to going going of the anything commitment we going It's As precisely our been on years. is think in deepens But happens, this if continue resonate continued Implants for is to be to belief that And a that of market. do don't because women's there's I the Motiva to new.

Raj Denhoy

one new just on maybe And helpful. products. It's

of Are fascinate for you’ve novel you point? have the Where at also with filed you but in breast that? stand Have sort think that through you Europe? implant a tissue watching shaped sort to in I shaped of cavity. the mentioned in close You times, move does you've that implant, to trials expander this Europe, mentioned at a tabs clinical

Juan José Chacón-Quirós

in available for for that. – So been last product product year of and the thank the European us That market. you that reminding has

implant Europe. in So the anatomical smooth it available only is

we about who lot anatomical like a implants, course, of are implants. plastic So concerned have of inquiries but seen who from have textured surgeons that patients

do in So available that type anatomical of are looking are those strong the market happy to for surgeons see And implant the have from we demand we only options. new in Europe. smooth

Raj Denhoy

The north Renee. then And to Great. one appreciate of raising the – lastly million you just maybe for last guidance, now. $XX guidance I

You in did guys of just north quarter. the million $XX first

that you of conservatism I step-up question So it run year Because at your guidance. there guess you're kind at into the of as if least rate you'll do that? the is progresses, lower still end at the with the just additional is, some continue baked no

curious just so the thinking on And into I'm guidance? what the went

Renee Gaeta

we're significant I Yes. your we're with the definitely so seeing Raj. improvement where for Thanks, comfortable Right XXXX, over at. now, they're projections appreciate confidence. and XXXX are

Of we doctors of But assessment current of ground as those. we results watching through refine or closely. continue the to the a with in ground talking and current as and we'll deploy our year markets course, lot on move the we year, quarter on more results that of boots did the European those boots the

Raj Denhoy

That's great.

Okay. Thank you.

Juan José Chacón-Quirós

Thank you.

Operator

Our comes Cowen. with Jennings question next Josh Thank you. from [Operator Instructions]

Your line is open.

Josh Jennings

the on strong Thanks Hi. on one taking congratulations Good want Raj's for start I a to of the question. morning. and follow-up to questions year. just

other fuss now together the textured you the aware in any and those be any meetings prohibiting that happen implanted we countries – about regulatory - the that we bodies discuss implants. Just there controversies the on France implants and of? in Is textured be country's docket getting should to to polyurethane around textured

Juan José Chacón-Quirós

Thank market I you, a do that impact Yes, international have many Josh regulatory lot the you should what FDA think because have were that mentioning the before, bodies like debating of we and for had panels ANSM just in this. about they question.

think I textured of risk countries, In you lot do management. have about implants. some a it's

reactions banned like, rightly see do France You did, them. what out

local You use you plastic had do their countries see society in like smooth to Switzerland, recommending implants. other the only surgeons scientific

where using they smooth should patients basically implants. in countries only to you about You had thinking advisories be Singapore, like told

their So there of patients. option available their about reactions will more they options one realize the from was best markets. reaction of think variety instructing think I that most their Patients comes in reading themselves, in their are with Motiva reading I they a more important options and probably find about different and

in innovation in we look many continue markets. women's should these in health. the we of to situation at focused So regulatory remain But commitment to our

Josh Jennings

the for textured that specifically implants the of dynamic there answer the question believe And reached this. is panel to of historically. understanding on more thanks and decision ongoing can you XXX% just Is France? now that anything got just penetration share one FDA in there to terms meeting Brazil. that My and But are that in sorry the close we've

Juan José Chacón-Quirós

we the hear question. Josh, to you. It to we're going have was you not – to ask repeat couldn't

Josh Jennings

about wondering, point to that just here, not I wanted to wanted is My apologize. Brazil understanding sorry, I to close ongoing you dynamics Brazil. that say, textured a but I specifically. believe I'm in had with that specifically ask could share just to the if any implant are penetrated country by XXX%.

Now post we France the have FDA and the that decision panel?

Juan José Chacón-Quirós

a for Brazil worldwide you market. the And not it Well, is thank only textured breast for two and augmentation Yes. that. market had been number traditionally

of work in market ago, smooth plastic generation to years to almost of has lot coming surgeons since devices. the teach at of use So Brazil two our a on been

through paid off. sales and through education happy medical reps our are interactions those we So that has

And now this continue You diligently Motiva to more revenues and to we of our QX. month. XX bring quarter, last just Brazil representing medical for just XX% education, more workshops work see

devices. development lot of in loyalty customers of So in sense plastic our see translate to Brazil think will there's as advantages devices. are on that But our how business because these more also the into we teaching that they we a from use surgeons going

really a it's So large market.

in So terms that there more for opportunities of we share. are ahead do think market us gaining

Josh Jennings

[indiscernible]? what's invasive is on that about last Can required My just developing. just pipeline Establishment Excellent. the and question the you minimally for talk procedure

Juan José Chacón-Quirós

Josh, again. sorry, we hear you but can't

Josh Jennings

now? apologize. me can José, Juan I you hear

Juan José Chacón-Quirós

sir. Yes

Josh Jennings

the just procedure Japan pipeline take Okay. for should steps required the question. you. invasive is developing. are Minimally of Can through if about us we disruption in launch that Establishment I and there. occur the asking for the about? I still Thank thinking that XXXX be was that to Again, I apologize. early you just end by the apologize timeline that's

Juan José Chacón-Quirós

the that we important minimally it used different the the case through Certificate have is and then prescription. surgeon And already through From most depending are case be Sale Europe, Free go on for for a that Well, have there In In been will done CE-Mark. that the now is fully we steps invasive has be it can Thank product. the to of you. thing Japan, used on implant markets. of validated.

that Brazil by end the think in that of clinics do we first time So ready implant on when been on invasive our innovation been products you. start the that the validated. invasive. has will the minimally comes invasive. using the to for of In that tools year, together for the want is for market minimally forefront with for group remind for everyone go minimally be Japan I and front Japan the to that always it has market a

invasive a it. to there at Japan minimally and we do that continue because need see for So a we it to bring to market will work be demand strong in will for

Josh Jennings

Great. again. Thanks

Operator

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

Juan José Chacón-Quirós

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

I opportunity to experience we José, with our your let our a Before We are hosting look many San Investor to everyone Day innovation talented Costa on to forward. we seeing global providing of of meet XX. know want firsthand headquarters Company in and our you June there workforce you the go, Rica forward first an driving and at

Global down on XX Conference June Conference hope the upcoming Investor Jefferies UBS you it Healthcare May make Healthcare Thanks see to we X. of adios. one can't Day, including conferences, you If on and the for again at the or

Operator

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

Establishment Labs (ESTA) 15 May 192019 Q1 Earnings call transcript