Establishment Labs Holdings Inc.

Greetings and welcome to the Establishment Labs fourth quarter 2022 financial results conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to our host, Raj Denhoi, Chief Financial Officer. Thank you. You may begin.

Thank you, Operator, and thank you, everyone, for joining us. With me today is Juana Zay Chacon-Quiros, our Chief Executive Officer. Following our prepared remarks, we'll take your questions. Before we begin, I would like to remind you that comments made by management during this call will include forward-looking statements from the meeting of federal securities laws. These include statements on Establishment Labs' financial outlook and the company's plans and timing for product development and sales. These forward-looking statements are based on management's current expectations and involve risks and uncertainties. For discussion of the principal risk factors and uncertainties that may affect our performance or cause actual results to differ materially from these statements, I encourage you to review our most recent annual and quarterly reports on Form 10-K and Form 10-Q, as well as other SEC filings, which are available on our website at EstablishmentLabs.com. I'd also like to remind you that our comments will include certain non-GAAP financial measures with respect to our performance, including but not limited to sales results, which can be stated on a constant currency basis. Reconciliations to the most directly comparable GAAP financial measures can be found in today's press release, which is available on our website. Please also note that Establishment Labs received an investigational device exemption from the FDA for Motiva implants and is undergoing a clinical trial to support regulatory approval in the United States. We continually seek to expand the geographies in which our products are regulatory approved. Please check with the local authorities for specific product availability. The content of this conference call contains time-sensitive information accurate only as of the date of this live broadcast, February 27th, 2023. Except as required by law, Establishment Labs undertakes no obligation to revise or otherwise update any statement to reflect events or circumstances after the date of this call. With that, it is my pleasure to turn the call over to our CEO, Juan Jose.

Thank you, Raj, and good afternoon, everyone. Record revenue in the fourth quarter of 2022 totaled $43.8 million, a 24% increase over the fourth quarter of 2021. Excluding the negative impact of current currency changes, our growth in the fourth quarter would have been approximately 28%. For the full year of 2022, revenue totaled $161.7 million, a 28% increase over 2021. Excluding changes in currency, growth in 2022 would have been 32%. These results are at the midpoint of the pre-announced ranges we provided in early January. We are growing well in excess of our underlying markets. And the T2D's market share gains is our singular focus on building a new breast aesthetics and reconstruction industry on the fundamental pillars of women's health. This focus has allowed us to develop a 12-year track record of excellent clinical and aesthetic outcomes since we first commercialized Motiva implants. Over that period of time, we have elevated standards for breast aesthetics and reconstruction by bringing to market a number of meaningful innovations based on science and patient-centered design. And this will continue into 2023 and beyond. For 2023, we are providing revenue guidance in the range of $200 to $210 million. This outlook represents estimated growth of 24% to 30% over 2022. Raj will provide additional detail on our fourth quarter performance and our 2023 guidance in a moment. Last week was another big moment at Establishment Labs, and I am pleased to report that we filed Module 4 of our Modular PMA with the FDA. This is a significant step toward Motiva being approved for sale in the United States. The submission of the final module also represents a transition in the approval process where the FDA will now begin their formal review of our full PMA. Our interactions with the FDA through the modular review period have been very collaborative and the level of interaction has been high. We look forward to the relationship continuing on a positive path as we work to bring Motiva to the United States. On Mia Femtech, The new category we are creating in breast aesthetics, we provided an update in early January that we have signed up our first clinic partner. Seishin Plastic and Aesthetic Surgery Clinic operates a network of 10 high-end aesthetic practices in Japan. They will first offer Miya at their two locations in Tokyo, their flagship clinic in Roppongi and their newest clinic in Ginza. Seishin is one of the most prestigious aesthetic practices in the world. we are so happy to have them as our first partner in the global rollout of mia our practice development and medical education teams are actively engaged with them in preparation for our launch with mia we are creating a new category in aesthetics for women that don't want a traditional augmentation but are conscious about the shape and proportions of their breast mia offered these women a minimally invasive procedure that can be performed without general anesthesia in less than 15 minutes with an easy return to their daily activities. By providing a solution that is more appealing to consumers, we are opening up a whole new group of women to breast aesthetics. As we launch MIA, we are focused on demonstrating that this is a new category bringing new women into breast aesthetics and that surgeons are seeing improved efficiency and our partner clinics are benefiting from higher economics. These proof points will be important as we look to scale Nia into the multi-billion dollar opportunity that it has the potential to become. We look forward to providing updates over the coming months. In our aesthetic breast recon franchise, the rollout of our Motiva Flora Tissue Expander continues. The market feedback is very positive with more and more surgeons making it their expander of choice in post-mastectomy breast reconstruction. In November, we announced regulatory approval for Flora and Motiva implants in Japan. As we commented at the time, launching Flora with Motiva implants in the Japanese market is a significant step in changing the global standard in breast reconstruction. What continues to resonate with clinicians globally is that FLORA is a much improved offering with many new advances in what has unfortunately been a neglected category in breast reconstruction. FLORA is only the first step in our Aesthetic Breast Recon Initiative, where establishment labs will offer tools and techniques that allow women to receive reconstruction surgeries that achieve the aesthetic ideals to which they aspire. As a global medical device company focused on women's health, Establishment Labs has the opportunity and the responsibility to improve breast reconstruction. We are not only bringing to market new technologies like FLORA that can improve outcomes, but we are also engaging in advocacy efforts to promote education, awareness, and access. The need and the opportunity are significant. One in eight women globally will experience breast cancer in her lifetime. but very few of them will undergo a reconstruction as part of the recovery from the disease. As we make progress in our aesthetic breast recon initiatives, the global impact will be meaningful. On China, we continue to make progress in the regulatory approval process, and we expect approval for Motiva in this market in the first half of 2023. The recent lifting of COVID restrictions and the return to more normal activity in China are encouraging not only for our approval, but also for adoption once we launch into what is the second largest market in the world. In January, at the JPMorgan Healthcare Conference, we provided an outlook for establishment labs to achieve $500 million in revenue in 2026. This works out to an average annual growth rate of 33%, and it contemplates contributions from our existing markets. NIA, China, the US, and from breast reconstruction globally. With the many layers of growth behind this target, we don't expect growth will be linear over the next four years. However, the many layers also suggest that this target is well-supported, even conservative, and that growth will continue for many years beyond 2026. We are ready for the next chapter in our growth story, and providing a long-range view not only suggests the potential we see before us, but it provides us with a target around which to plan and organize. It is well within our reach to become the leading global company in breast aesthetics and reconstruction. We will continue to transform our markets and in doing so, we will create new opportunities for growth and more importantly, create new options for women around the world. I will now turn the call over to Raj.