Establishment Labs(ESTA) - 2021 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Total revenue for Q4 2021 was $35.3 million, reflecting a 31% growth year-over-year, with foreign currency changes reducing growth by approximately 3 percentage points [21][22] - Gross profit for the quarter was $24.2 million, representing a gross margin of 68.6%, up from 54.3% in Q4 2020, attributed to improved production volumes and a return to a more normalized geographic mix [23] - Net loss from operations for Q4 was $9.4 million, compared to a net loss of $8 million in the same period last year [27] Business Line Data and Key Metrics Changes - Direct sales accounted for approximately 44% of total revenue, while distributor sales made up the remainder [22] - The launch of the Joy program and the introduction of the Motiva Ergonomix2 implants are expected to enhance market positioning and patient satisfaction [12][13] Market Data and Key Metrics Changes - Sales in Europe comprised approximately 38% of global sales, with Asia Pacific and the Middle East at 24%, and Latin America making up the balance [22] - Brazil, the largest market, accounted for approximately 14.7% of total quarterly sales, indicating strong performance in Latin America [22] Company Strategy and Development Direction - The company aims to expand its market share through innovation in women's health and the introduction of new products and geographies [7][34] - Establishment Labs is preparing for entry into the U.S. and Chinese markets, which are the largest globally, and plans to launch Motiva Mia to open a new customer base in breast aesthetics [35][46] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving 2022 revenue guidance of $155 million to $165 million, representing a growth of 22% to 30% over 2021 [7][29] - The company is closely monitoring the pandemic's impact and expects to manage supply chain disruptions effectively [30][31] Other Important Information - The company has signed a nonbinding term sheet to refinance its existing credit facility, which is expected to support growth initiatives [28] - The establishment of a Women's Health Hub in Barcelona is aimed at enhancing direct-to-consumer marketing and patient advocacy efforts [11] Q&A Session Summary Question: Insights on Motiva Mia commercialization - Management highlighted the importance of surgeon education and the establishment of a Women's Health Hub to effectively market Motiva Mia and bring in new customers [38][39] Question: Operating expenses and growth guidance - Management indicated that operating expenses are expected to trend down as a percentage of revenue despite increased investments in new initiatives [42] Question: China market strategy - The company is excited about entering the Chinese market, leveraging successful strategies from South Korea, and plans to launch Motiva by the end of the year [45][46] Question: Impact of Allergan's exit from the market - Management noted that the exit of Allergan has created opportunities for market share expansion, particularly in Brazil, and emphasized ongoing medical education efforts [50] Question: U.S. launch preparations - The company is preparing for the U.S. launch by establishing necessary infrastructure and hiring key personnel while being judicious with spending [54] Question: Gradual revenue growth from new products - Management indicated that revenue from new product launches like Flora and Mia is expected to grow gradually, with a focus on ensuring successful market expansion [57]