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Press Release

LeMaitre Q1 2018 Sales $26.0mm (+8%), EPS $0.19 (+17%)

April 25, 2018 at 4:05 PM EDT

BURLINGTON, Mass., April 25, 2018 (GLOBE NEWSWIRE) -- LeMaitre Vascular, Inc. (Nasdaq:LMAT), a provider of vascular devices, implants and services, today reported Q1 2018 results, provided guidance, and announced a $0.07/share dividend.

Q1 2018 Results

  • Sales of $26.0mm, +8% vs. Q1 2017
  • Operating income of $4.9mm vs. $4.2mm, +16%
  • Net income of $3.9mm vs. $3.2mm, +20%
  • Earnings of $0.19 per diluted share vs. $0.16, +17%
  • EBITDA of $5.9mm vs. $5.2mm, +13%

Q1 2018 sales of $26.0mm increased 8% (+3% organic) vs. Q1 2017.  Allografts, patches and valvulotomes led growth.  Sales in the Americas and Europe/Middle East/Africa were up 6% and 15% respectively, while sales in Asia/Pac Rim decreased 11%.

Gross margin decreased to 71.1% in Q1 2018 from 71.9% in Q1 2017, primarily due to product mix and manufacturing inefficiencies.

Operating expenses in Q1 2018 were $13.6mm, a 3% increase vs. the year-earlier quarter. The Company ended the quarter with 94 sales reps vs. 95 at the end of Q1 2017.

George W. LeMaitre, Chairman and CEO said, “We continue to pursue 10% annual reported sales growth and 20% annual operating income growth.”

Business Outlook

  Previous Guidance (2/21/2018) Current Guidance
Q2 2018 Sales N/A $26.6mm - $27.4mm
(Midpoint: +5% reported, +5% organic)
Q2 2018 Gross Margin N/A 69.0%
Q2 2018 Operating Income N/A $11.1mm - $11.7mm* 
(Midpoint: +106%)
Q2 2018 Earnings Per Share N/A $0.41 - $0.43
(Midpoint: +83%)
2018 Sales $110.0mm - $111.6mm
(Midpoint: +10% reported, +7% organic)
$106.0mm - $109.0mm
(Midpoint: +7% reported, +6% organic)
2018 Gross Margin 71.5% 71.0%
2018 Operating Income $25.4mm - $26.6mm
(Midpoint: +23%)
$27.9mm - $30.0mm* 
(Midpoint: +37%)
2018 Earnings Per Share $0.96 - $1.00
(Midpoint: +14%)
$1.05 - $1.13
(Midpoint: +27%)
*Included in operating income guidance is an estimated $5.8mm gain from the divestiture described below.  This amount is subject to change based on final accounting treatment. 

Divestiture of General Surgery Product Lines

On April 5, 2018, the Company divested its general surgery product lines to Symmetry Surgical, Inc. for $7.4 million.  Included in the divestiture were the Reddick Cholangiogram Catheter and Reddick Saye-Screw, both used during laparoscopic cholecystectomy procedures.  With this transaction complete, all of LeMaitre’s remaining 14 product lines are focused on the vascular surgeon.  In 2017, these product lines accounted for $3.3 million in revenue and $2.5 million in gross profit.

Quarterly Dividend

On April 23, 2018, the Company's Board of Directors approved a quarterly dividend of $0.07/share of common stock. The dividend will be paid June 7, 2018 to shareholders of record on May 22, 2018.

Conference Call Reminder

Management will conduct a conference call at 5:00pm ET today to review the Company's financial results and discuss its business outlook for the remainder of the year. The conference call will be broadcast live over the Internet. Individuals who are interested in listening to the webcast should log on to the Company's website at www.lemaitre.com/investor. The conference call may also be accessed by dialing 844-239-5284 (+1 512-961-6497 for international callers), using passcode 1197775. For individuals unable to join the live conference call, a replay will be available on the Company's website.

A reconciliation of GAAP to non-GAAP results is included in the tables attached to this release.

About LeMaitre Vascular

LeMaitre Vascular is a provider of devices, implants and services for the treatment of peripheral vascular disease, a condition that affects more than 200 million people worldwide. The Company develops, manufactures and markets disposable and implantable vascular devices to address the needs of its core customer, the vascular surgeon.

LeMaitre and the LeMaitre Vascular logo are registered trademarks of LeMaitre Vascular, Inc. This press release contains other trademarks and trade names of the Company.

For more information about the Company, please visit http://www.lemaitre.com.

Use of Non-GAAP Financial Measures

LeMaitre Vascular management believes that in order to better understand the Company's short-term and long-term financial trends, investors may wish to consider certain non-GAAP financial measures as a supplement to financial performance measures prepared in accordance with GAAP. Non-GAAP financial measures are not based on a comprehensive set of accounting rules or principles and do not have standardized meanings. These non-GAAP measures result from facts and circumstances that may vary in frequency and/or impact on continuing operations. Non-GAAP measures should be considered in addition to, and not as a substitute for, financial performance measures in accordance with GAAP. In addition to the description provided below, reconciliation of GAAP to non-GAAP results is provided in the financial statement tables included in this press release.

In this press release, the Company has reported non-GAAP sales growth percentages after adjusting for the impact of foreign currency exchange, business development transactions, and/or other events as well as EBITDA or earnings before interest, taxes, depreciation and amortization. The Company refers to the calculation of non-GAAP sales percentages as "organic." The Company analyzes non-GAAP sales on a constant currency basis, net of acquisitions and other non-recurring events, and EBITDA to better measure the comparability of results between periods. Because changes in foreign currency exchange rates have a non-operating impact on net sales, and acquisitions, product discontinuations, and other strategic transactions are episodic in nature and are highly variable to the reported sales results, the Company believes that evaluating growth in sales on a constant currency basis net of such transactions provides an additional and meaningful assessment of sales to management. The Company believes that evaluating EBITDA provides an approximation of the cash generating ability of its operations.

Forward-Looking Statements

The Company's current financial results, as discussed in this release, are preliminary and unaudited, and subject to adjustment. This press release contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Statements in this press release regarding the Company's business that are not historical facts may be "forward-looking statements" that involve risks and uncertainties. Specifically, forward-looking statements in this release include, but are not limited to, statements about the Company's expectations regarding Q2 2018 and 2018 sales, gross margin, operating income and earnings per share. Forward-looking statements are based on management's current, preliminary expectations and are subject to risks and uncertainties that could cause actual results to differ from the results expected, including, but not limited to, the risk of significant fluctuations in our quarterly and annual results due to numerous factors; the risk that we may not be able to maintain our recent levels of profitability; the risk that the Company may not realize the anticipated benefits of its strategic activities; the risk that assumptions about the market for the Company's products and the productivity of the Company's direct sales force and distributors may not be correct; risks related to the integration of acquisition targets; risks related to product demand and market acceptance of the Company's products and pricing; the risk that a recall of our products could result in significant costs or negative publicity; the risk that the Company is not successful in transitioning to a direct-selling model in new territories; and other risks and uncertainties included under the heading "Risk Factors" in our most recent Annual Report on Form 10-K, as updated by our subsequent filings with the SEC, all of which are available on the Company's investor relations website at http://www.lemaitre.com and on the SEC's website at http://www.sec.gov. Undue reliance should not be placed on forward-looking statements, which speak only as of the date they are made. The Company undertakes no obligation to update publicly any forward-looking statements to reflect new information, events, or circumstances after the date they were made, or to reflect the occurrence of unanticipated events.

CONTACT: J.J. Pellegrino, CFO
LeMaitre Vascular
781-425-1691
jjpellegrino@lemaitre.com

           
LEMAITRE VASCULAR, INC (NASDAQ: LMAT)        
CONDENSED CONSOLIDATED BALANCE SHEETS        
(amounts in thousands)        
           
           
      March 31, 2018   December 31, 2017
      (unaudited)    
Assets        
           
Current assets:        
  Cash and cash equivalents   $ 22,781     $ 19,096  
  Short-term marketable securities     22,613       22,564  
  Accounts receivable, net     14,510       15,000  
  Inventory and other deferred costs     21,833       21,046  
  Prepaid expenses and other current assets     2,271       2,605  
Total current assets     84,008       80,311  
           
Property and equipment, net     12,170       12,378  
Goodwill     23,810       23,844  
Other intangibles, net     7,806       8,234  
Deferred tax assets     1,419       1,378  
Other assets     197       178  
           
Total assets   $ 129,410     $ 126,323  
           
           
Liabilities and stockholders' equity        
           
Current liabilities:        
  Accounts payable   $ 1,440     $ 1,543  
  Accrued expenses     9,118       9,770  
  Acquisition-related obligations     2,084       1,876  
Total current liabilities     12,642       13,189  
           
Deferred tax liabilities     2,177       2,176  
Other long-term liabilities     1,121       1,188  
Total liabilities     15,940       16,553  
           
Stockholders' equity        
  Common stock     208       207  
  Additional paid-in capital     94,040       93,127  
  Retained earnings     30,836       28,333  
  Accumulated other comprehensive loss     (2,006 )     (2,289 )
  Treasury stock     (9,608 )     (9,608 )
Total stockholders' equity     113,470       109,770  
           
Total liabilities and stockholders' equity   $ 129,410     $ 126,323  
           


         
  LEMAITRE VASCULAR, INC (NASDAQ: LMAT)    
  CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS    
  (amounts in thousands, except per share amounts)      
  (unaudited)      
         
    For the three months ended
    March 31, 2018   March 31, 2017
         
Net sales $ 25,994   $ 24,139
Cost of sales   7,520     6,786
         
Gross profit   18,474     17,353
         
Operating expenses:      
  Sales and marketing   7,090     6,954
  General and administrative   4,697     4,548
  Research and development   1,825     1,658
         
         
Total operating expenses   13,612     13,160
         
Income from operations   4,862     4,193
         
Other income:      
  Other income (loss), net   54     46
         
Income before income taxes   4,916     4,239
         
Provision for income taxes   1,063     1,020
         
Net income $ 3,853   $ 3,219
         
Earnings per share of common stock      
  Basic $ 0.20   $ 0.17
  Diluted $ 0.19   $ 0.16
         
Weighted - average shares outstanding:      
  Basic   19,283     18,631
  Diluted   20,181     19,707
         
         
Cash dividends declared per common share $ 0.070   $ 0.055
         


                 
  LEMAITRE VASCULAR, INC (NASDAQ: LMAT)        
  SELECTED NET SALES INFORMATION            
  (amounts in thousands)              
  (unaudited)              
                 
                 
    For the three months ended
    March 31, 2018   March 31, 2017
    $   %   $   %
Net Sales by Geography              
  Americas $ 15,860   61 %   $ 14,980   62 %
  Europe/Middle East/Africa   8,755   34 %     7,614   32 %
  Asia/Pacific Rim   1,379   5 %     1,545   6 %
Total Net Sales $ 25,994   100 %   $ 24,139   100 %
                 


                   
LEMAITRE VASCULAR, INC (NASDAQ: LMAT)              
NON-GAAP FINANCIAL MEASURES              
(amounts in thousands)              
(unaudited)              
                   
                   
Reconciliation between GAAP and Non-GAAP sales growth:              
  For the three months ended March 31, 2018              
    Net sales as reported   $ 25,994            
    Impact of currency exchange rate fluctuations     (1,196 )          
    Net impact of acquisitions excluding currency     -            
    Adjusted net sales       $ 24,798        
                   
  For the three months ended March 31, 2017              
    Net sales as reported   $ 24,139            
    Net impact of divestitures excluding currency     -            
    Adjusted net sales       $ 24,139        
                   
    Adjusted net sales increase for the three months ended March 31, 2018   $ 659     3 %  
                   
                   
Reconciliation between GAAP and Non-GAAP sales growth:              
  For the three months ended June 30, 2018              
    Net sales per guidance   $ 27,025            
    Impact of currency exchange rate fluctuations     (978 )          
    Net impact of acquisitions excluding currency     -            
    Adjusted net sales       $ 26,047        
                   
  For the three months ended June 30, 2017              
    Net sales as reported   $ 25,753            
    Net impact of divestitures excluding currency     (852 )          
    Adjusted net sales       $ 24,901        
                   
    Adjusted net sales increase for the three months ended June 30, 2018   $ 1,146     5 %  
                   
                   
Reconciliation between GAAP and Non-GAAP sales growth:              
  For the year ended December 31, 2018              
    Net sales per guidance   $ 107,450            
    Impact of currency exchange rate fluctuations     (2,867 )          
    Net impact of acquisitions excluding currency     -            
    Adjusted net sales       $ 104,583        
                   
  For the year ended December 31, 2017              
    Net sales as reported   $ 100,867            
    Net impact of divestitures excluding currency     (2,492 )          
    Adjusted net sales       $ 98,375        
                   
    Adjusted net sales increase for the year ended December 31, 2018     $ 6,208     6 %  
                   
                   
                   
        For the three months ended    
        March 31, 2018   March 31, 2017      
Reconciliation between GAAP and Non-GAAP EBITDA              
  Net income as reported   $ 3,853     $ 3,219        
  Interest (income) expense, net     (95 )     (20 )      
  Amortization and depreciation expense     1,036       979        
  Provision for income taxes     1,063       1,020        
                   
  EBITDA   $ 5,857     $ 5,198        
                   
  EBITDA percentage increase         13%        
                   

 

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Source: LeMaitre Vascular, Inc.