UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
Current Report
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): 7/28/2010
LeMaitre Vascular, Inc.
(Exact name of registrant as specified in its charter)
Commission File Number: 001-33092
| Delaware | 04-2825458 | |
| (State or other jurisdiction of incorporation) |
(IRS Employer Identification No.) |
63 Second Avenue
Burlington, MA 01803
(Address of principal executive offices, including zip code)
781-221-2266
(Registrant’s telephone number, including area code)
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Information to be included in the report
| Item 2.02. | Results of Operations and Financial Condition |
On July 28, 2010, LeMaitre Vascular, Inc. issued a press release regarding its financial and operational results for the second quarter ended June 30, 2010. A copy of the press release is furnished as Exhibit 99.1 to this report.
The information in this report, including the Exhibit attached hereto, is intended to be furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as expressly set forth by specific reference in such filing.
| Item 9.01. | Financial Statements and Exhibits |
The following exhibit is furnished as part of this report, where indicated:
| (d) | Exhibits. |
| Exhibit No. |
Description | |
| 99.1 |
Press release issued by LeMaitre Vascular, Inc. on July 28, 2010, announcing its financial and operational results for the second quarter ended June 30, 2010, furnished herewith. | |
Signature(s)
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| LeMaitre Vascular, Inc. | ||||||
| Date: July 28, 2010 | By: | /S/ AARON M. GROSSMAN | ||||
| Aaron M. Grossman | ||||||
| Secretary | ||||||
Exhibit Index
| Exhibit No. |
Description | |
| EX-99.1 |
Press Release | |
Exhibit 99.1
For information contact:
J.J. Pellegrino
Chief Financial Officer
LeMaitre Vascular Inc.
781.221.2266 x106
jpellegrino@lemaitre.com
LeMaitre Vascular Q2 2010 Sales $14.2mm (+15% Organic) & Op. Profit $2.0mm
BURLINGTON, MA, July 28, 2010 — LeMaitre Vascular, Inc. (NASDAQ: LMAT), a provider of peripheral vascular devices and implants, today announced Q2 2010 financial results. The Company posted record quarterly sales of $14.2mm and record operating income of $2.0mm. The Company also increased its share repurchase program to $5mm and raised its sales and operating income guidance for 2010.
Q2 2010 sales increased 12% versus Q2 2009, or 15% on an organic basis. By category, Vascular was up 23% organically while Endovascular increased 2%. Vascular sales benefited from a larger sales force and strength across nearly all product lines. Geographically, organic sales growth was 23% in the Americas and 5% internationally.
The Company reported a gross margin of 75.3% in Q2 2010, up from 72.2% in Q2 2009. The increase was driven by higher average selling prices, manufacturing efficiencies, and geographic mix (63% of Q2 2010 sales were in the Americas, where gross margins are comparatively favorable).
Q2 2010 operating income was $2.0mm versus $1.0mm in Q2 2009. Net income in Q2 2010 was $1.5mm or $0.09 per diluted share, versus $925,000, or $0.06 per diluted share in Q2 2009.
George W. LeMaitre, Chairman & CEO said, “I was pleased to see strong sales, an improved gross margin and continued expense control all come together in Q2 to produce a record bottom-line, including a healthy 14% operating margin. I was also pleased to note that our newer direct markets including France, Japan and Italy continued to perform well, increasing 54%, 26% and 8%, respectively, from Q2 2009.”
As of June 30, 2010 cash and marketable securities was $26.0mm. Excluding share repurchases, the Company’s cash increased by $2.2mm during the quarter. The increase was primarily the result of $1.5mm in net income and $573,000 of depreciation, amortization and stock-based compensation.
Sales and marketing expenses increased 12% in Q2 2010 to $4.7mm. The spending increase was driven by the larger sales force and increased sales commissions. The Company ended Q2 2010 with 61 sales reps versus 54 at the end of Q2 2009.
General and administrative expenses increased 3% in Q2 2010 to $2.5mm.
Q2 2010 research and development expenses decreased 7% to $1.3mm, primarily driven by reduced regulatory and clinical spending. In addition, the Company received six regulatory approvals in Q2 2010, notably the AnastoClip GC in the U.S., and the F3 Pruitt Shunt in Europe.
Share Repurchase
During Q2 2010 the Company repurchased 76,209 shares of its common stock at an average price of $5.02 per share, for a total of $383,000. The Company’s Board of Directors increased the size of the share repurchase program by $3mm, authorizing up to $5mm of its common stock to be purchased from time to time in the open market or in privately negotiated transactions. Repurchases may be made under a Rule 10b5-1 plan, which would permit shares to be repurchased when the Company might otherwise be precluded from doing so under insider trading laws. The repurchase program may be suspended or discontinued at any time and will conclude no later than December 31, 2011, unless otherwise extended by the Company’s Board of Directors. The program is funded by the Company’s cash and cash equivalents.
Business Outlook
The Company increased its 2010 sales and operating income guidance to $55.8mm and $6.2mm, respectively. This 2010 sales guidance implies 12% organic growth versus 2009. The Company expects Q3 2010 sales of $13.8mm and operating income of $1.4mm. This Q3 2010 sales guidance implies 8% organic growth versus Q3 2009. Guidance amounts exclude the effects of acquisitions, restructurings, foreign exchange fluctuations, and distributor terminations.
Conference Call Reminder
Management will conduct a conference call at 5:00 p.m. EDT 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 800-277-1181 (+1-617-597-5358 for international callers), using passcode 28493376. 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. The Company develops, manufactures and markets disposable and implantable vascular devices to address the needs of vascular surgeons. The Company’s devices are used to treat peripheral vascular disease; a condition the Company believes affects at least 20 million people worldwide.
Well-known to vascular surgeons, the Company’s diversified product portfolio consists of brand name devices used in arteries and veins outside of the heart, including the Expandable LeMaitre Valvulotome, Pruitt F3 Carotid Shunt, TAArget Thoracic Stent Graft, and AlboGraft Vascular Graft.
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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 and third parties.
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 properly understand the Company’s short-term and long-term financial trends, investors may wish to consider the impact of certain non-cash or non-recurring items, when used as a supplement to financial performance measures in accordance with GAAP. These items result from facts and circumstances that vary in frequency and/or impact on continuing operations. In addition, management uses results of operations before such items to evaluate the operational performance of the Company and as a basis for strategic planning. 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.
This press release includes sales growth after adjusting for foreign exchange, business development transactions, and other non-recurring events. We refer to this as “organic” sales growth. 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 Q2 2010, the Company divested the OptiLock Implantable Port and discontinued sales of the aSpire Stent.
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 Company’s financial guidance 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 does not generate sufficient operating scale to maintain or increase profitability; risks related to product demand and market acceptance of the Company’s products; the possibility that the Company’s new products may fail to provide the desired safety and efficacy or may not be accepted by the market for other reasons; 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 general uncertainty related to seeking regulatory approvals for the Company’s
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products; 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.
Financial Statements
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LEMAITRE VASCULAR, INC (NASDAQ: LMAT)
CONDENSED CONSOLIDATED BALANCE SHEETS
(amounts in thousands)
| June 30, 2010 | December 31, 2009 | |||||||
| (unaudited) | ||||||||
| Assets |
||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ | 25,608 | $ | 23,192 | ||||
| Marketable securities |
342 | 808 | ||||||
| Accounts receivable, net |
7,861 | 7,778 | ||||||
| Inventories |
6,140 | 6,498 | ||||||
| Other current assets |
1,243 | 1,274 | ||||||
| Total current assets |
41,194 | 39,550 | ||||||
| Property and equipment, net |
2,233 | 2,101 | ||||||
| Goodwill |
11,022 | 11,022 | ||||||
| Other intangibles, net |
2,768 | 3,316 | ||||||
| Other assets |
832 | 917 | ||||||
| Total assets |
$ | 58,049 | $ | 56,906 | ||||
| Liabilities and stockholders’ equity |
||||||||
| Current liabilities: |
||||||||
| Accounts payable |
$ | 1,072 | $ | 1,136 | ||||
| Accrued expenses |
5,630 | 5,412 | ||||||
| Total current liabilities |
6,702 | 6,548 | ||||||
| Long term debt |
137 | 188 | ||||||
| Deferred tax liabilities |
1,686 | 1,546 | ||||||
| Other long-term liabilities |
347 | 411 | ||||||
| Total liabilities |
8,872 | 8,693 | ||||||
| Stockholders’ equity |
||||||||
| Common stock |
159 | 159 | ||||||
| Additional paid-in capital |
63,938 | 63,475 | ||||||
| Accumulated deficit |
(12,064 | ) | (14,596 | ) | ||||
| Accumulated other comprehensive income (loss) |
(1,217 | ) | 94 | |||||
| Less: treasury stock |
(1,639 | ) | (919 | ) | ||||
| Total stockholders’ equity |
49,177 | 48,213 | ||||||
| Total liabilities and stockholders’ equity |
$ | 58,049 | $ | 56,906 | ||||
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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 six months ended | ||||||||||||||
| June 30, 2010 |
June 30, 2009 |
June 30, 2010 |
June 30, 2009 |
||||||||||||
| Net sales |
$ | 14,158 | $ | 12,630 | $ | 27,973 | $ | 23,978 | |||||||
| Cost of sales |
3,502 | 3,508 | 6,999 | 6,590 | |||||||||||
| Gross profit |
10,656 | 9,122 | 20,974 | 17,388 | |||||||||||
| Operating expenses: |
|||||||||||||||
| Sales and marketing |
4,747 | 4,249 | 9,641 | 8,395 | |||||||||||
| General and administrative |
2,495 | 2,412 | 5,109 | 4,937 | |||||||||||
| Research and development |
1,338 | 1,435 | 2,878 | 2,746 | |||||||||||
| Restructuring charges |
— | — | — | 1,777 | |||||||||||
| Impairment charge |
68 | 33 | 68 | 106 | |||||||||||
| Total operating expenses |
8,648 | 8,129 | 17,696 | 17,961 | |||||||||||
| Income (loss) from operations |
2,008 | 993 | 3,278 | (573 | ) | ||||||||||
| Other income: |
|||||||||||||||
| Interest income (expense), net |
9 | 15 | 12 | (7 | ) | ||||||||||
| Other income (loss), net |
(54 | ) | 106 | (28 | ) | 20 | |||||||||
| Total other income (loss), net |
(45 | ) | 121 | (16 | ) | 13 | |||||||||
| Income (loss) before income taxes |
1,963 | 1,114 | 3,262 | (560 | ) | ||||||||||
| Provision for income taxes |
452 | 189 | 730 | 396 | |||||||||||
| Net income (loss) |
$ | 1,511 | $ | 925 | $ | 2,532 | $ | (956 | ) | ||||||
| Net income (loss) per share of common stock: |
|||||||||||||||
| Basic |
$ | 0.10 | $ | 0.06 | $ | 0.16 | $ | (0.06 | ) | ||||||
| Diluted |
$ | 0.09 | $ | 0.06 | $ | 0.16 | $ | (0.06 | ) | ||||||
| Weighted average shares outstanding: |
|||||||||||||||
| Basic |
15,613 | 15,670 | 15,646 | 15,655 | |||||||||||
| Diluted |
16,050 | 15,866 | 16,045 | 15,655 | |||||||||||
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LEMAITRE VASCULAR, INC (NASDAQ: LMAT)
SELECTED NET SALES INFORMATION
(amounts in thousands)
(unaudited)
| For the three months ended | For the six months ended | |||||||||||||||||||||||
| June 30, 2010 | June 30, 2009 | June 30, 2010 | June 30, 2009 | |||||||||||||||||||||
| $ | % | $ | % | $ | % | $ | % | |||||||||||||||||
| Net Sales by Product Category: |
||||||||||||||||||||||||
| Vascular |
$ | 10,207 | 72 | % | $ | 8,481 | 67 | % | $ | 19,764 | 71 | % | $ | 15,965 | 67 | % | ||||||||
| Endovascular |
2,944 | 21 | % | 3,051 | 24 | % | 6,236 | 22 | % | 5,983 | 25 | % | ||||||||||||
| General Surgery |
965 | 7 | % | 976 | 8 | % | 1,920 | 7 | % | 1,856 | 7 | % | ||||||||||||
| 14,116 | 100 | % | 12,508 | 99 | % | 27,920 | 100 | % | 23,804 | 99 | % | |||||||||||||
| OEM |
42 | 0 | % | 122 | 1 | % | 53 | 0 | % | 174 | 1 | % | ||||||||||||
| Total Net Sales |
$ | 14,158 | 100 | % | $ | 12,630 | 100 | % | $ | 27,973 | 100 | % | $ | 23,978 | 100 | % | ||||||||
| Net Sales by Geography |
||||||||||||||||||||||||
| Americas |
$ | 8,872 | 63 | % | $ | 7,269 | 58 | % | $ | 16,920 | 60 | % | $ | 13,950 | 58 | % | ||||||||
| International |
5,286 | 37 | % | 5,361 | 42 | % | 11,053 | 40 | % | 10,028 | 42 | % | ||||||||||||
| Total Net Sales |
$ | 14,158 | 100 | % | $ | 12,630 | 100 | % | $ | 27,973 | 100 | % | $ | 23,978 | 100 | % | ||||||||
LEMAITRE VASCULAR, INC (NASDAQ: LMAT)
IMPACT OF FOREIGN CURRENCY AND BUSINESS ACTIVITIES
(amounts in thousands)
(unaudited)
| 2010 | 2009 | 2008 | |||||||||||||||||||||||
| Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||
| Total net sales |
14,158 | 13,815 | 13,584 | 13,346 | 12,630 | 11,348 | 12,111 | 12,023 | 12,739 | 11,847 | |||||||||||||||
| Impact of currency exchange rate fluctuations (1) |
(336 | ) | 314 | 613 | (215 | ) | (699 | ) | (622 | ) | (448 | ) | 452 | 836 | 674 | ||||||||||
| Net impact of acquisitions, distributed sales and discontinued products, excluding currency exchange rate fluctuations (2) |
(65 | ) | 95 | 397 | 333 | 234 | 101 | 235 | 703 | 929 | 1,133 | ||||||||||||||
| (1) | Represents the impact of the change in foreign exchange rates compared to the corresponding quarter of the prior year based on the weighted averge exchange rate for each quarter. |
| (2) | Represents the impact of sales of products of acquired businesses and distributed sales of other manufacturers' products, net of sales related to discontinued products and other activities, based on 12 months’ sales following the date of the event or transaction, for the current period only. |
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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 June 30, 2010 |
|||||||||
| Net sales as reported |
$ | 14,158 | |||||||
| Impact of currency exchange rate fluctuations |
336 | ||||||||
| Net impact of acquisitions, distributed sales and discontinued products, excluding currency |
65 | ||||||||
| Adjusted net sales |
$ | 14,559 | |||||||
| For the three months ending June 30, 2009 |
|||||||||
| Net Sales as reported |
$ | 12,630 | |||||||
| Adjusted net sales increase for the three months ending June 30, 2010 |
$ | 1,929 | 15 | % | |||||
| Reconciliation between GAAP and Non-GAAP sales growth for Vascular: |
|||||||||
| For the three months ending June 30, 2010 |
|||||||||
| Net sales as reported |
$ | 10,207 | |||||||
| Impact of currency exchange rate fluctuations |
193 | ||||||||
| Adjusted net sales |
$ | 10,400 | |||||||
| For the three months ending June 30, 2009 |
|||||||||
| Net Sales as reported |
$ | 8,481 | |||||||
| Adjusted net sales increase for the three months ending June 30, 2010 |
$ | 1,919 | 23 | % | |||||
| Reconciliation between GAAP and Non-GAAP sales growth for Endovascular |
|||||||||
| For the three months ending June 30, 2010 |
|||||||||
| Net sales as reported |
$ | 2,944 | |||||||
| Impact of currency exchange rate fluctuations |
132 | ||||||||
| Net impact of acquisitions, distributed sales and discontinued products, excluding currency |
41 | ||||||||
| Adjusted net sales |
$ | 3,117 | |||||||
| For the three months ending June 30, 2009 |
|||||||||
| Net Sales as reported |
$ | 3,051 | |||||||
| Adjusted net sales increase for the three months ending June 30, 2010 |
$ | 66 | 2 | % | |||||
| Reconciliation between GAAP and Non-GAAP sales growth for the Americas: |
|||||||||
| For the three months ending June 30, 2010 |
|||||||||
| Net sales as reported |
$ | 8,872 | |||||||
| Net impact of acquisitions, distributed sales and discontinued products, excluding currency |
44 | ||||||||
| Adjusted net sales |
$ | 8,916 | |||||||
| For the three months ending June 30, 2009 |
|||||||||
| Net Sales as reported |
$ | 7,269 | |||||||
| Adjusted net sales increase for the three months ending June 30, 2010 |
$ | 1,647 | 23 | % | |||||
| Reconciliation between GAAP and Non-GAAP sales growth for International: |
|||||||||
| For the three months ending June 30, 2010 |
|||||||||
| Net sales as reported |
$ | 5,286 | |||||||
| Impact of currency exchange rate fluctuations |
336 | ||||||||
| Net impact of acquisitions, distributed sales and discontinued products, excluding currency |
21 | ||||||||
| Adjusted net sales |
$ | 5,643 | |||||||
| For the three months ending June 30, 2009 |
|||||||||
| Net Sales as reported |
$ | 5,361 | |||||||
| Adjusted net sales increase for the three months ending June 30, 2010 |
$ | 282 | 5 | % | |||||
| Reconciliation between GAAP and Non-GAAP sales growth for Quarterly Guidance: |
|||||||||
| For the three months ending September 30, 2010 |
|||||||||
| Net sales per guidance |
$ | 13,800 | |||||||
| Impact of currency exchange rate fluctuations |
515 | ||||||||
| Net impact of acquisitions, distributed sales and discontinued products, excluding currency |
106 | ||||||||
| Adjusted net sales |
$ | 14,421 | |||||||
| For the three months ending September 30, 2009 |
|||||||||
| Net Sales as reported |
$ | 13,345 | |||||||
| Adjusted net sales increase for the three months ending September 30, 2010 |
$ | 1,076 | 8 | % | |||||
| Reconciliation between GAAP and Non-GAAP sales growth for Annual Guidance: |
|||||||||
| For the year ending December 31, 2010 |
|||||||||
| Net sales per guidance |
$ | 55,800 | |||||||
| Impact of currency exchange rate fluctuations |
1,169 | ||||||||
| Net impact of acquisitions, distributed sales and discontinued products, excluding currency |
183 | ||||||||
| Adjusted net sales |
$ | 57,152 | |||||||
| For the year ending December 31, 2009 |
|||||||||
| Net Sales as reported |
$ | 50,908 | |||||||
| Adjusted net sales increase for the year ending December 31, 2010 |
$ | 6,244 | 12 | % | |||||
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