Company Overview

Establishment Labs is a medical technology company that develops, manufactures, and markets silicone breast implants under the Motiva Implants brand. The company sells its products in 86 countries and is currently seeking FDA approval to sell Motiva Implants in the United States.

Financial Highlights

• Revenue for Q1 2024 was $37.2 million, a 20% decrease compared to Q1 2023. This decrease was driven by lower demand, especially in Asia-Pacific distributor markets.
• Net loss for Q1 2024 was $16.2 million compared to $11.9 million in Q1 2023.
  
• Cash balance as of March 31, 2024 was $73.0 million.

Recent Developments

• Submitted all modules of FDA application for Motiva Implants approval in the US
  
• Received FDA clearance for Motiva Flora SmoothSilk tissue expander
• Launched Motiva Implants in China and Motiva Flora tissue expander in the US
• Expanding manufacturing facilities in Costa Rica to increase capacity
• Completed 2-year clinical study of Mia Femtech for breast enhancement

Financial Outlook

• Demand slowed in 2H 2023 due to economic uncertainty and seasonality
• Seeing stabilization and improving demand so far in 2024
• Macroeconomic challenges continue to create market volatility
• Implemented cost reduction measures such as workforce downsizing
• Focusing investments on US launch, China market, and Mia Femtech

Financial Performance

Revenue

• Q1 2024 revenue decreased 20% to $37.2 million
• Driven by lower demand, especially in Asia-Pacific distributor markets
• Slight price increases globally partially offset revenue decrease
• European revenues remained stable

Revenue	Q1 2024	Q1 2023	Change
$(millions)	$37.2	$46.5	(20%)

Expenses

• Q1 2024 gross margin was 65.6%, up from 64.7% in Q1 2023
  • Benefited from price increases and geographic mix
• Reduced operating expenses, including 8.8% decrease in SG&A
• R&D spending decreased 33.8% due to clinical trial and personnel savings

Expense	Q1 2024	Q1 2023	Change
SG&A	$28.9	$31.7	(8.8%)
R&D	$4.3	$6.5	(33.8%)
Total Operating Expenses	$33.2	$38.2	(13.1%)

Profitability

• Higher interest expense increased net loss
• Q1 2024 net loss of $16.2 million vs $11.9 million in Q1 2023
• Accumulated deficit is $376.3 million as of March 31, 2024

Metric	Q1 2024	Q1 2023
Net Loss	$(16.2) million	$(11.9) million
Accumulated Deficit	$(376.3) million

Liquidity & Capital Resources

• Cash balance of $73.0 million as of March 31, 2024
• Completed equity offering in January 2024, raising $49.7 million
  
• Amended debt agreement to extend commitment dates
• Short-term liquidity sufficient for next 12 months
• May raise additional capital to fund US regulatory activities and growth

Key Takeaways

• Seeing signs of stabilizing demand after slowdown in 2H 2023
• Implemented cost reduction measures to align with market dynamics
• Advancing growth drivers like US regulatory approval and China launch
• Maintaining solid cash position and access to additional capital
• Monitoring macroeconomic climate for ongoing uncertainty