View printer-friendly version << Back

LeMaitre Vascular Q4 2011 Sales $13.4mm (+5% Organic), Op. Profit $0.8mm

02/27/12

BURLINGTON, Mass., Feb. 27, 2012 (GLOBE NEWSWIRE) -- LeMaitre Vascular, Inc. (Nasdaq:LMAT), a provider of peripheral vascular devices and implants, today reported Q4 2011 and full-year 2011 financial results. The Company posted Q4 2011 sales of $13.4mm and operating income of $0.8mm, and full-year 2011 sales of $57.7mm and operating income of $3.7mm. The Company also increased its cash dividend to $0.025 per share and provided Q1 2012 and full-year 2012 updated guidance.

Q4 2011 sales increased 5% organically vs. Q4 2010.  Sales in the Americas grew 4% organically, while International increased 7%.  Q4 2011 reported sales declined 7% due to the Company's mid-2011 stent graft exit.  Full-year 2011 sales increased 3% on a reported and organic basis, hampered by the stent graft exit.  

Gross margin was 71.0% in Q4 2011, versus 71.7% in the prior year period. For full-year 2011 the Company reported a gross margin of 69.7% vs. 74.4% in 2010.  Gross margin declines in both periods were largely due to manufacturing inefficiencies, including the AlboGraft factory transition. Sequentially, gross margin improved 2.4% from Q2 2011 to Q4 2011, largely due to the Company's recent stent graft exit.

Q4 2011 operating income was $0.8mm, vs. an operating loss of $1.3mm in Q4 2010. Excluding special items in both periods, operating income was $0.9mm in Q4 2011 and Q4 2010, as the absence of stent graft sales in Q4 2011 was offset by lower operating expenses.  Full-year 2011 operating income was $3.7mm vs. $4.0mm in 2010.  

Net income in Q4 2011 was $0.3mm or $0.02 per diluted share, vs. $2.0mm or $0.12 per diluted share in Q4 2010. Full-year 2011 net income was $2.1mm or $0.13 per diluted share, vs. $6.0mm or $0.37 per diluted share in 2010. Both comparisons reflect a one-time non-cash tax benefit in Q4 2010 of $3.2mm.

George W. LeMaitre, Chairman and CEO said, "International sales were up 7% organically in Q4, reflecting a more focused vascular sales offering, the absence of a stent-graft drag, and direct sales in Spain and Denmark. Looking ahead, our significantly-expanded worldwide sales force and our two recently-launched products, the Over-the-Wire LeMaitre Valvulotome and The UnBalloon, should bolster sales growth.  In 2012 these two products are selling at an annualized run-rate of about $500,000. Also, the two 2011 factory closures should enable gross margin expansion going forward."

The Company ended Q4 2011 with 78 sales representatives, up from 67 at the end of Q4 2010.

Q4 2011 operating expenses were $8.7mm, a 25% decrease from $11.6mm in Q4 2010. Excluding special items in both periods, operating expenses in Q4 2011 were $8.6mm, a 9% decrease from Q4 2010. The improvement was driven by reduced selling expenses and the absence of stent graft clinical trials.  Full-year operating expenses were $36.5mm in 2011, a 3% decrease from 2010. Excluding special items in both periods, 2011 operating expenses were $35.0mm, a 1% decrease from 2010.

Cash and marketable securities were $20.1mm at December 31, 2011, a decrease of $3.0mm during the quarter.  The decrease was driven by $0.7mm of share repurchases, $0.6mm of Italian closing costs, $0.5mm for the Spanish/Danish transitions and the LifeSpan acquisition, $0.5mm of factory build-out, and $0.3mm of dividends.

Quarterly Dividend

The Company's Board of Directors approved the payment of a quarterly cash dividend, and a 25% increase in the dividend rate to $0.025 per share of common stock.  The dividend is payable on April 3, 2012 to shareholders of record on March 20, 2012.  Future declarations of quarterly dividends and the establishment of future record and payment dates are subject to the final determination of the Company's Board of Directors.

Business Outlook

The Company expects Q1 2012 sales of $13.8mm (+8% organic versus Q1 2011), and reported operating income of $0.8mm. The Company also expects 2012 full-year sales of $57.5mm (+9% organic vs. 2011), and reported operating income of $5.0mm. Changes in foreign currency exchange rates since the Company's previous guidance lowered full-year 2012 sales guidance by approximately $725,000. The Company's previous full-year 2012 organic sales guidance was +8%.

The Company's Q1 2012 and full-year 2012 guidance includes the effects of its stent graft exit, which accounted for $4.0mm of sales ($2.1mm of gross profit) in 2011. 

Except as otherwise stated, all guidance amounts exclude the effects of future acquisitions, foreign exchange rate changes, distributor terminations and factory consolidations.  

Conference Call Reminder

Management will conduct a conference call at 5:00 p.m. EST 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 800-706-7749 (+1 617-614-3474 for international callers), using pass-code 95815151. For individuals unable to join the live conference call, a replay will be available on the Company's website.

About LeMaitre Vascular

LeMaitre Vascular is a provider of devices for the treatment of peripheral vascular disease, a condition that affects more than 20 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.

The LeMaitre Vascular, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=10015

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. These non-GAAP measures result from facts and circumstances that vary in frequency and/or impact on continuing operations. Investors should consider these non-GAAP measures 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 financial measures, adjusted operating income and operating expenses, which exclude restructuring charges associated with the consolidation of the dacron and ePTFE graft manufacturing facilities in Burlington, the gain related to the termination of the Endologix distribution relationship, and certain charges which consisted of European severance payments, inventory write-offs related to the Endofit stent graft divestiture, termination charges associated with distributor buyouts in Spain and Denmark, and impairment charges associated with certain intangible assets. 

In addition, this press release includes sales growth after adjusting for foreign exchange, business development transactions, and other events. The Company refers to this as "organic" sales growth, and it differs from the manner in which the Company has calculated the "organic" sales growth in previous quarters in that previously divestitures were adjusted from the current year reported sales and are now adjusted from the prior year reported sales. The Company analyzes net sales on a constant currency basis net of acquisitions and other non-recurring events 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 highly variable in sales impact, 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 both management and the Company's investors. During Q4 2010, the Company acquired its LifeSpan Vascular Graft business and discontinued its Italian OEM manufacturing operations, and in Q3 2011, the Company completed its divestiture of the TAArget and UniFit product lines and ceased distributing the Endologix Powerlink stent graft. 

Forward-Looking Statements

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, statements regarding the financial and operational guidance, future sales growth, commercial success of the launch of the Over-the-Wire LeMaitre Valvulotome or The UnBalloon or other products, manufacturing consolidations, effectiveness of the expanded sales force, acceptance of the product portfolio mix, and the addition of direct-sales territories are forward-looking, involving risks and uncertainties. The Company's current quarterly financial results, as discussed in this release, are preliminary and unaudited, and subject to adjustment. 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 predicted. These risks and uncertainties include, but are not limited to, the risk that the Company experiences significant fluctuations in its quarterly and annual results; the risk that assumptions about the market for the Company's products may not be correct;  the productivity of our direct sales force and distributors; risks related to product demand and market acceptance of the Company's products; risks that the Company's products may fail to provide the desired safety and efficacy; risks related to attracting, training and retaining sales representatives and other employees; risks related to government mandated or voluntary recalls that could occur as a result of component failures, manufacturing errors or design defects,  the significant competition the Company faces from other companies, technologies, and alternative medical procedures; the risk that the Company may fail to expand its product offerings through internal development or acquisition; the risk that the Company is not successful in transitioning to a direct-selling model in new territories; the risk that the Company experiences production delays or quality difficulties in the consolidation of its manufacturing operations; the general uncertainty related to seeking regulatory approvals for the Company's products; adverse conditions in the general domestic and global economic markets 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.globenewswire.com/newsroom/ctr?d=247231&amp;l=28&amp;u=http%3A%2F%2Fwww.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.

Financial Statements

LEMAITRE VASCULAR, INC (NASDAQ: LMAT)    
CONDENSED CONSOLIDATED BALANCE SHEETS     
(amounts in thousands)    
     
  December 31, 2011 December 31, 2010
  (unaudited)  
Assets    
     
Current assets:    
Cash and cash equivalents  $ 20,132  $ 22,614
Accounts receivable, net  8,541  8,475
Inventories  8,003  8,375
Other current assets  3,011  3,447
Total current assets  39,687  42,911
     
Property and equipment, net  4,661  3,806
Goodwill  11,917  11,917
Other intangibles, net  2,985  3,686
Deferred tax assets  6  134
Other assets  431  820
     
Total assets  $ 59,687  $ 63,274
     
Liabilities and stockholders' equity    
     
Current liabilities:    
Accounts payable  $ 981  $ 1,320
Accrued expenses  5,539  8,628
Acquisition-related obligations   19  441
Total current liabilities  6,539  10,389
     
Deferred tax liabilities  989  443
Other long-term liabilities  71  86
Total liabilities  7,599  10,918
     
Stockholders' equity    
Common stock  163  161
Additional paid-in capital  64,619  64,642
Accumulated deficit  (6,440)  (8,583)
Accumulated other comprehensive loss  (606)  (429)
Less: treasury stock  (5,648)  (3,435)
Total stockholders' equity  52,088  52,356
     
Total liabilities and stockholders' equity  $ 59,687  $ 63,274
         
         
LEMAITRE VASCULAR, INC (NASDAQ: LMAT)        
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS        
(amounts in thousands, except per share amounts)        
(unaudited)        
         
  For the three months ended For the year ended
  December 31, 2011 December 31, 2010 December 31, 2011 December 31, 2010
         
Net sales  $ 13,411  $ 14,431  $ 57,685  $ 56,060
Cost of sales  3,888  4,084  17,458  14,341
         
Gross profit  9,523  10,347  40,227  41,719
         
Operating expenses:        
Sales and marketing  4,729  5,070  19,375  19,409
General and administrative  2,711  2,864  11,228  10,506
Research and development  1,139  1,475  4,425  5,488
Restructuring charges  112  1,816  2,161  1,816
Gain on termination of distribution agreement  --  --  (735)  --
Impairment charges  --  417  83  485
         
Total operating expenses  8,691  11,642  36,537  37,704
         
Income (loss) from operations  832  (1,295)  3,690  4,015
         
Other income (loss):        
Interest income, net  4  6  11  26
Other income (loss), net  (52)  (13)  51  (16)
         
Total other income (loss), net  (48)  (7)  62  10
         
Income (loss) before income taxes  784  (1,302)  3,752  4,025
         
Provision (benefit) for income taxes  438  (3,266)  1,609  (1,988)
         
Net income   $ 346  $ 1,964  $ 2,143  $ 6,013
         
Net income per share of common stock:        
Basic  $ 0.02  $ 0.13  $ 0.14  $ 0.38
Diluted  $ 0.02  $ 0.12  $ 0.13  $ 0.37
         
Weighted average shares outstanding:        
Basic  15,407  15,596  15,458  15,627
Diluted  15,821  16,148  15,989  16,114
         
         
Cash dividends declared per common share   $ 0.02  $ --   $ 0.08  $ -- 
                 
LEMAITRE VASCULAR, INC (NASDAQ: LMAT)                
SELECTED NET SALES INFORMATION                
(amounts in thousands)                
(unaudited)                
                 
  For the three months ended  For the year ended 
  December 31, 2011 December 31, 2010 December 31, 2011 December 31, 2010
  $ % $ % $ % $ %
Net Sales by Product Category:                
Open Vascular  $ 11,004 82%  $ 10,287 71%  $ 44,408 77%  $ 40,022 71%
Endovascular and other 2,407 18% 4,144 29% 13,277 23% 16,038 29%
Total Net Sales  $ 13,411 100%  $ 14,431 100%  $ 57,685 100%  $ 56,060 100%
                 
Net Sales by Geography                
Americas  $ 8,974 67%  $ 8,768 61%  $ 36,958 64%  $ 34,575 62%
International 4,437 33% 5,663 39% 20,727 36% 21,485 38%
Total Net Sales  $ 13,411 100%  $ 14,431 100%  $ 57,685 100%  $ 56,060 100%
                       
LEMAITRE VASCULAR, INC (NASDAQ: LMAT)                      
IMPACT OF FOREIGN CURRENCY AND BUSINESS ACTIVITIES                  
(amounts in thousands)                        
(unaudited)                        
       
  2011 2010 2009
  Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1
                         
Total net sales  13,411  14,564  15,112  14,598  14,431  13,656  14,158  13,815  13,584  13,346  12,630  11,348
Impact of currency exchange rate fluctuations (1)  15  431  669  10  (420)  (418)  (336)  314  613  (215)  (699)  (622)
Net impact of acquisitions and distributed sales, excluding currency exchange rate fluctuations (2)  260  319  335  328  156  --  --  95  397  333  234  101
Net impact of discontinued products, excluding excluding currency rate fluctuations (3)  (1,904)  (370)  (76)  (45)  (100)  (105)  (65)  --  --  --  --  --
                         
(1) Represents the impact of the change in foreign exchange rates compared to the corresponding quarter of the prior year based on the weighted average exchange rate for each quarter.  
(2) Represents the impact of sales of products of acquired businesses and distributed sales of other manufacturers' based on 12 months' sales following the date of the event or transaction, for the current period only.
(3) Represents the impact of sales related to discontinued and divested products, and discontinued distributed sales of other manufacturers' products, based on 12 months' sales following the date of the event or transaction, for the prior period only.
         
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 ending December 31, 2011        
Net sales as reported  $ 13,411      
Impact of currency exchange rate fluctuations  (15)      
Net impact of acquisitions and distributed sales excluding currency   (260)      
Adjusted net sales    $ 13,136    
         
For the three months ending December 31, 2010        
Net Sales as reported  $ 14,431      
Net impact of discontinued products sales excluding currency   (1,904)      
Adjusted net sales    $ 12,527    
         
Adjusted net sales increase for the three months ending December 31, 2011     $ 609 5%  
         
Reconciliation between GAAP and Non-GAAP Americas sales growth:        
For the three months ending December 31, 2011        
Net sales as reported  $ 8,974      
Net impact of acquisitions and distributed sales excluding currency   (12)      
Adjusted net sales    $ 8,962    
         
For the three months ending December 31, 2010        
Net Sales as reported  $ 8,768      
Net impact of discontinued products sales excluding currency   (126)      
Adjusted net sales    $ 8,642    
         
Adjusted net sales increase for the three months ending December 31, 2011     $ 320 4%  
         
Reconciliation between GAAP and Non-GAAP International sales growth:        
For the three months ending December 31, 2011        
Net sales as reported  $ 4,437      
Impact of currency exchange rate fluctuations  (15)      
Net impact of acquisitions and distributed sales excluding currency   (248)      
Adjusted net sales    $ 4,174    
         
For the three months ending December 31, 2010        
Net Sales as reported  $ 5,663      
Net impact of discontinued products sales excluding currency   (1,778)      
Adjusted net sales    $ 3,885    
         
Adjusted net sales increase for the three months ending December 31, 2011     $ 289 7%  
         
Reconciliation between GAAP and Non-GAAP sales growth:        
For the year ending December 31, 2011        
Net sales as reported  $ 57,685      
Impact of currency exchange rate fluctuations  (1,125)      
Net impact of acquisitions and distributed sales excluding currency   (1,242)      
Adjusted net sales    $ 55,318    
         
For the year ending December 31, 2010        
Net Sales as reported  $ 56,060      
Net impact of discontinued products sales excluding currency   (2,395)      
Adjusted net sales    $ 53,665    
         
Adjusted net sales increase for the year ending December 31, 2011     $ 1,653 3%  
         
  For the three months ended For the year ended
  December 31, 2011 December 31, 2010 December 31, 2011 December 31, 2010
Reconciliation between GAAP and Non-GAAP income from operations:        
Income (loss) from operations as reported  $ 832  $ (1,295)  $ 3,690  $ 4,015
Inventory write-off from terminated product line  --   --   361  -- 
Restructuring charges  112  1,816  2,161  1,816
Gain on termination of distribution agreement  --   --   (735)  -- 
Impairment charges  --   417  83  485
         
Adjusted income from operations  $ 944  $ 938  $ 5,560  $ 6,316
         
  For the three months ended For the year ended
  December 31, 2011 December 31, 2010 December 31, 2011 December 31, 2010
Reconciliation between GAAP and Non-GAAP operating expenses:        
Operating expenses as reported  $ 8,691  $ 11,642  $ 36,537  $ 37,704
Restructuring charges  (112)  (1,816)  (2,161)  (1,816)
Gain on termination of distribution agreement  --   --   735  -- 
Impairment charges  --   (417)  (83)  (485)
         
Adjusted operating expenses  $ 8,579  $ 9,409  $ 35,028  $ 35,403
         
Reconciliation between GAAP and Non-GAAP sales growth for Quarterly Guidance:        
For the three months ending March 31, 2012        
Net sales per guidance  $ 13,840      
Impact of currency exchange rate fluctuations  149      
Adjusted net sales    $ 13,989    
         
For the three months ending March 31, 2011  14,594      
Net impact of discontinued products sales excluding currency   (1,584)      
Adjusted net sales    $ 13,010    
         
Adjusted net sales increase for the three months ending March 31, 2012     $ 979 8%  
         
Reconciliation between GAAP and Non-GAAP sales growth for Annual Guidance:        
For the year ending December 31, 2012        
Net sales per guidance  $ 57,500      
Impact of currency exchange rate fluctuations  701      
Adjusted net sales    $ 58,201    
         
For the year ending December 31, 2011  57,685      
Net impact of discontinued products sales excluding currency   (4,068)      
Adjusted net sales    $ 53,617    
         
Adjusted net sales increase for the year ending December 31, 2012     $ 4,584 9%  
CONTACT: J.J. Pellegrino
         Chief Financial Officer
         LeMaitre Vascular Inc.
         781- 425-1691
         jpellegrino@lemaitre.com