BURLINGTON, Mass., March 3, 2009 (GLOBE NEWSWIRE) -- LeMaitre Vascular, Inc. (Nasdaq:LMAT), a provider of peripheral vascular devices and implants, today announced Q4 and full year 2008 financial results. The Company also announced it has entered into a definitive agreement with Edwards Lifesciences to terminate their distribution of the Company's AlboGraft polyester grafts.
Q4 2008 sales were $12.1 million, a 9% increase versus Q4 2007 (+11% excluding foreign exchange and acquisitions). Sales increased 6% in the Company's Endovascular category and 12% in Vascular while sales decreased 1% in General Surgery. Endovascular was driven by the TAArget and UniFit stent grafts, and partially offset by the weak Euro. Vascular benefited from the inclusion of the Albograft (acquired December 2007) and strong results from the Remote Endarterectomy devices. International business drove the top line in Q4 2008, accounting for 44% of sales.
Sales in 2008 were $48.7 million, an 18% increase over 2007 (+7% excluding foreign exchange and acquisitions). This increase was driven by the inclusion of the Company's 2007 acquisitions, acceleration of stent graft sales in Europe, and the stronger Euro for the full year. Geographically, several international subsidiaries experienced significant growth: France (+52%), the U.K. (+41%), and Japan (+36%).
Q4 2008 operating income was $354,000 versus a loss of $1.3 million in Q4 2007. This improvement was due largely to the 2008 Expense Shave program and associated headcount reductions. Operating expenses fell 15% from $9.5 million in Q4 2007 to $8.1 million in Q4 2008. The $354,000 Q4 operating profit extended the 2008 bottom-line turnaround, comparing favorably with the Q1 operating loss of $2.6 million, the Q2 operating loss of $869,000 and the Q3 operating profit of $170,000.
For the full year, the Company reduced its operating loss to $2.9 million from $4.3 million in 2007. This $1.4 million year-over-year improvement was due to the 18% sales gain coupled with the 2008 Expense Shave program and headcount reductions.
The Company reported net income of $312,000 in Q4 2008, or $0.02 per diluted share, versus a net loss of $1.2 million, or $0.08 per diluted share in Q4 2007. For the full year 2008, the Company posted a net loss of $3.3 million, or $0.21 per share, versus $2.9 million, or $0.19 per share, in 2007.
The Company's cash and marketable securities increased by $2.1 million during Q4 2008 to $21.3 million. This increase was driven principally by net income of $312,000, depreciation, amortization, and stock-based compensation of $566,000, as well as a $1.1 million inventory reduction.
George W. LeMaitre, Chairman and CEO said, "I am happy to report an excellent Q4. We posted 11% organic sales growth, recorded our second consecutive operating profit and increased our cash-on-hand by $2.1 million. This was accomplished despite the weak Euro which decreased our top- and bottom-lines in Q4. Also, in January we began distributing a carotid patch which should complement our substantial carotid shunt business. More recently we signed an agreement to terminate the AlboGraft distribution contract, opening the door in Q2 for direct-to-hospital sales. I expect this transaction will benefit our top-line, gross margin and bottom-line as time progresses."
The Company reported a gross margin of 69.6% in Q4 2008, down from 73.3% in Q4 2007, but up from 67.4% in Q3 2008. The decrease from 2007 was largely a result of the inclusion of the AlboGraft sales in Q4 2008, manufacturing inefficiencies, and continued strength in the Company's international business, where the weak Euro pressured margins.
Sales and marketing expenses decreased 17% to $4.4 million in Q4 2008 from $5.3 million in Q4 2007. Sales and marketing expenses were 36% of revenue in Q4 2008, compared to 48% in the year-earlier quarter. The Company ended Q4 2008 with 52 sales representatives.
General and administrative expenses decreased 13% to $2.3 million in Q4 2008 from $2.6 million in Q4 2007, the result of general belt-tightening.
R&D expenses increased 11% to $1.3 million in Q4 2008 from $1.2 million in Q4 2007, as the Company continued to invest in clinical and regulatory personnel, as well as product development.
Termination of the AlboGraft Distribution Agreement
On March 2, 2009 the Company entered into a definitive agreement with Edwards Lifesciences to terminate its distribution of AlboGraft. Under the terms of the agreement, LeMaitre Vascular will pay EUR 2.25 million upon closing. In exchange, the distribution contract will be terminated and LeMaitre Vascular will receive detailed customer information and transition services. The Company will also repurchase inventory valued at approximately EUR 400,000. In Q1 2009 the Company anticipates decreased AlboGraft sales to Edwards in the run-up to the distribution termination. The transaction is scheduled to close March 27, 2009, subject to customary closing conditions, and the Company expects to record associated charges in Q1 2009.
LeMaitre Vascular to Distribute Neovasc Carotid Patch
On December 30, 2008, the Company entered into an agreement with Neovasc Inc. to distribute its biological patches for use in vascular surgery, including carotid endarterectomy. This seven year agreement became effective January 26, 2009. LeMaitre Vascular was also granted an option to acquire this product commencing in 2014.
Business Outlook
The Company expects 2009 sales of $50.0 - $50.5 million and 2009 operating income of $1.5 million. Excluding foreign exchange and acquisitions, this sales guidance implies year-over-year growth of 8% - 9% in 2009. This top and bottom line guidance also excludes the impact of the Edwards distribution termination. The Company will update its 2009 guidance to reflect the impact of this transaction after the closing.
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 2009. 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 866-202-0886 (+1-617-213-8841 for international callers), using passcode 31777818. For interested 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 that the Company estimates affects more than 20 million people worldwide.
Well-known to vascular surgeons, the Company's diversified product portfolio consists of brand name devices that are used in arteries and veins outside of the heart including the Expandable LeMaitre Valvulotome, the Pruitt-Inahara Carotid Shunt and the TAArget Thoracic Stent Graft.
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.
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 for 2009 and the potential AlboGraft transaction are forward-looking statements involving risks and uncertainties. The Company's fourth quarter and full year 2008 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; the potential for encountering unfavorable foreign currency exchange rate fluctuations; risks related to product demand and market acceptance of the Company's products; the significant competition the Company faces from other companies, technologies, and alternative medical procedures; the risk that the Company does not complete the AlboGraft transaction; the risk that the Company does not realize the anticipated benefits of the termination of the AlboGraft distribution contract or future strategic transactions; 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 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 products, particularly in the United States; and the 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
LEMAITRE VASCULAR, INC (NASDAQ: LMAT)
CONDENSED CONSOLIDATED BALANCE SHEETS
(amounts in thousands)
December 31, December 31,
2008 2007
------------ ------------
(unaudited)
Assets
Current assets:
Cash and cash equivalents $ 15,895 $ 6,397
Marketable securities 5,359 16,198
Accounts receivable, net 7,244 7,020
Inventories 6,959 9,589
Other current assets 1,658 2,562
------------ ------------
Total current assets 37,115 41,766
Property and equipment, net 2,327 2,891
Goodwill 11,022 10,942
Other intangibles, net 2,883 3,886
Other assets 1,052 1,372
------------ ------------
Total assets $ 54,399 $ 60,857
============ ============
Liabilities and stockholders' equity
Current liabilities:
Revolving line of credit $ -- $ 262
Accounts payable 606 2,271
Accrued expenses 5,543 6,661
Acquisition-related liabilities 784 851
------------ ------------
Total current liabilities 6,933 10,045
Long term debt 78 42
Deferred tax liabilities 1,260 996
Other long-term liabilities 380 1,188
------------ ------------
Total liabilities 8,651 12,271
Stockholders' equity
Common stock 157 155
Additional paid-in capital 62,290 61,187
Accumulated deficit (16,194) (12,880)
Accumulated other comprehensive income (272) 291
Less: treasury stock (233) (167)
------------ ------------
Total stockholders' equity 45,748 48,586
------------ ------------
Total liabilities and stockholders'
equity $ 54,399 $ 60,857
============ ============
LEMAITRE VASCULAR, INC (NASDAQ: LMAT)
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(amounts in thousands, except per share amounts)
(unaudited)
For the three For the year
months ended ended
------------------ ------------------
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
2008 2007 2008 2007
-------- -------- -------- --------
Net sales $ 12,111 $ 11,104 $ 48,720 $ 41,446
Cost of sales 3,687 2,961 14,817 10,739
-------- -------- -------- --------
Gross profit 8,424 8,143 33,903 30,707
Operating expenses:
Sales and marketing 4,407 5,314 19,762 19,443
General and administrative 2,274 2,617 9,999 9,534
Research and development 1,301 1,174 5,328 4,591
Purchased research and
development -- 373 -- 373
Restructuring charges
(credits) 4 (17) 1,147 1,042
Impairment charge 84 -- 597 7
-------- -------- -------- --------
Total operating expenses 8,070 9,461 36,833 34,990
-------- -------- -------- --------
Income (loss) from operations 354 (1,318) (2,930) (4,283)
Other income:
Interest income, net 9 244 301 1,298
Other income (loss), net (101) 9 (192) 283
-------- -------- -------- --------
Total other income (loss),
net (92) 253 109 1,581
-------- -------- -------- --------
Income (loss) before income
taxes 262 (1,065) (2,821) (2,702)
Provision (benefit) for income
taxes (50) 113 493 232
-------- -------- -------- --------
Net income (loss) $ 312 $ (1,178) $ (3,314) $ (2,934)
======== ======== ======== ========
Net Income (loss) per share of
common stock:
Basic $ 0.02 $ (0.08) $ (0.21) $ (0.19)
======== ======== ======== ========
Diluted $ 0.02 $ (0.08) $ (0.21) $ (0.19)
======== ======== ======== ========
Weighted average shares
outstanding:
Basic 15,632 15,465 15,572 15,398
======== ======== ======== ========
Diluted 15,921 15,465 15,572 15,398
======== ======== ======== ========
LEMAITRE VASCULAR, INC (NASDAQ: LMAT)
SELECTED NET SALES INFORMATION
(amounts in thousands)
(unaudited)
For the three months ended For the year ended
-------------------------- -------------------------
December 31, December 31, December 31, December 31,
2008 2007 2008 2007
------------ ------------ ------------ ------------
$ % $ % $ % $ %
------- ---- ------- ---- ------- ---- ------- ----
Net Sales by
Product Category:
------------------
Endovascular $ 4,110 34% $ 3,887 35% $15,946 33% $14,143 34%
Vascular 6,973 58% 6,204 56% 28,573 58% 23,420 57%
General Surgery 1,002 8% 1,013 9% 3,928 8% 3,883 9%
------- ---- ------- ---- ------- ---- ------- ----
12,085 100% 11,104 100% 48,447 99% 41,446 100%
OEM 26 0% -- 273 1% --
------- ---- ------- ---- ------- ---- ------- ----
Total Net Sales $12,111 100% $11,104 100% $48,720 100% $41,446 100%
======= ==== ======= ==== ======= ==== ======= ====
Net Sales by
Geography
------------
United States and
Canada $ 6,838 56% $ 6,909 62% $26,899 55% $25,141 61%
Outside the United
States and Canada 5,273 44% 4,195 38% 21,821 45% 16,305 39%
------- ---- ------- ---- ------- ---- ------- ----
$12,111 100% $11,104 100% $48,720 100% $41,446 100%
======= ==== ======= ==== ======= ==== ======= ====
LEMAITRE VASCULAR, INC (NASDAQ: LMAT)
IMPACT OF FOREIGN CURRENCY AND BUSINESS ACTIVITIES
(amounts in thousands)
(unaudited)
--------------------------- ---------------------------
2008 2007
--------------------------- ---------------------------
Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1
--------------------------- ---------------------------
Total net
sales 12,111 12,023 12,739 11,847 11,104 10,144 10,315 9,883
Impact of
currency
exchange
rate
fluctuations
(1) (448) 452 836 674 439 253 267 322
Net impact of
acquisitions,
distributed
sales and
discontinued
products,
excluding
currency
exchange rate
fluctuations
(2) 235 703 929 1,133 1,116 635 567 455
-------------------------------------------------------
---------------------------
2006
---------------------------
Q4 Q3 Q2 Q1
---------------------------
Total net sales 8,757 8,540 8,760 8,571
Impact of currency exchange rate
fluctuations (1) 232 135 (1) (287)
Net impact of acquisitions, distributed
sales and discontinued products,
excluding currency exchange rate
fluctuations (2) (252) (383) (107) 37
---------------------------
(1) Represents the impact of the change in foreign exchange rates
over 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, and shown in the current period only.