LeMaitre Vascular Announces Q3 2019 Financial Results


BURLINGTON, Mass., Oct. 23, 2019 (GLOBE NEWSWIRE) -- LeMaitre Vascular, Inc. (Nasdaq:LMAT), a provider of vascular devices, implants and services, today reported Q3 2019 results, provided guidance, and announced an $0.085/share dividend.

Q3 2019 Results

  • Sales of $29.1mm, +20% (+13% organic) vs. Q3 2018
  • Operating income of $5.9mm, +28%
  • Net income of $5.2mm, +20%
  • Earnings of $0.25 per diluted share, +20%
  • EBITDA of $7.0mm, +27%

The Company posted record sales in the Americas (+18%), while Europe/Middle East/Africa (+20%) and Asia/Pac sales (+43%) also contributed. Sales growth was led by embolectomy catheters, valvulotomes and allografts. 

Gross margin decreased to 69.3% in Q3 2019 (vs. 71.4% in Q3 2018) primarily due to the two lower-margin acquisitions of H2 2018 and the strong US dollar.

Operating expenses in Q3 2019 were $14.3mm (+13% vs. Q3 2018) driven by sales compensation, acquisition-related expenses and factory consolidations.  The Company employed 109 sales reps at September 30, 2019 vs. 106 a year earlier.

Business Outlook

 Previous Guidance
(7/24/2019)
Current Guidance
(Includes CardioCel and VascuCel)
Q4 2019 SalesN/A$30.1mm - $30.9mm
(Midpoint:+8% reported, +4% organic)
Q4 2019 Gross MarginN/A68.2%
Q4 2019 Op. IncomeN/A$5.6mm - $6.1mm
(Midpoint: -18%)
(Midpoint Ex-Special Items: +5%)
Q4 2019 EPSN/A$0.22 - $0.24
(Midpoint: -23%)
(Midpoint Ex-Special Items: +5%)
2019 Sales$115.5mm - $116.7mm
(Midpoint: +10% reported, +7% organic)
$117.2mm - $118.0mm
(Midpoint: +11% reported, +7% organic)
2019 Gross Margin68.7%68.7%
2019 Op. Income$21.5mm - $22.4mm
(Midpoint: -22%)
(Midpoint Ex-Special Items: +6%)
$21.9mm - $22.4mm
(Midpoint: -22%)
(Midpoint Ex-Special Items: +7%)
2019 EPS$0.84 - $0.88
(Midpoint: -24%)
(Midpoint Ex-Special Items: +4%)
$0.88 - $0.90
(Midpoint: -22%)
(Midpoint Ex-Special Items: +7%)

Acquisition of Biologic Patch Business from Admedus

On October 11, 2019, the Company acquired Admedus’s biologic patch business for $15.5 million, of which $14.2 million was paid at closing and $1.3 million is due in two post-closing installments.  There are also potential earnout payments of $7.8 million payable based upon the performance of the acquired business as well as other milestones.  The acquired patches, marketed under the brands CardioCel® and VascuCel®, are processed in a manner intended to reduce the risk of calcification.  CardioCel and VascuCel sales in the first nine months of 2019 annualize to $7.1 million, mostly in the US and Europe.

Quarterly Dividend

On October 21, 2019, the Company's Board of Directors approved a quarterly dividend of $0.085/share of common stock. The dividend will be paid on December 5, 2019 to shareholders of record on November 20, 2019.

Share Repurchase Program

On February 14, 2019, the Company's Board of Directors authorized the repurchase of up to $10.0mm of the Company’s common stock.  The repurchase program may be suspended or discontinued at any time and will conclude on February 14, 2020, unless extended by the Board.

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 1984936. 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, a 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 growth 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, divestitures, 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.

The Company has also identified the percentage change in its projected Q4 2019 and 2019 operating income and earnings per share excluding “special items.”  Those special items are the gains on the Company’s 2018 acquisitions and divestitures, net of tax, and a 2019 restructuring charge.  Because acquisitions, divestitures and restructurings are episodic in nature and are highly variable to the Company’s results, the Company believes that evaluating its profitability net of such transactions and events provides an additional and meaningful assessment of profitability to management.

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 Q4 2019 and 2019 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 including the acceleration or deceleration of product growth rates; 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 the transition of manufacturing of an acquired product line to the Company; risks related to the Company’s ability to attain or maintain regulatory approvals for its products; 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; the risk that the Company will not be successful in selling to a non-core call point; 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, which are all 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.

       
LEMAITRE VASCULAR, INC (NASDAQ: LMAT)     
CONDENSED CONSOLIDATED BALANCE SHEETS      
(amounts in thousands)     
       
       
   September 30, 2019 December 31, 2018 
   (unaudited)   
Assets     
       
Current assets:     
 Cash and cash equivalents $  11,719  $  26,318  
 Short-term marketable securities    33,177     21,668  
 Accounts receivable, net    14,878     15,721  
 Inventory and other deferred costs    36,695     27,388  
 Prepaid expenses and other current assets    3,226     2,922  
Total current assets    99,695     94,017  
       
Property and equipment, net    14,070     14,102  
Right-of-use leased assets    6,008     -   
Goodwill    32,102     29,868  
Other intangibles, net    16,765     13,692  
Deferred tax assets    1,164     1,215  
Other assets    210     194  
       
Total assets $  170,014  $  153,088  
       
       
Liabilities and stockholders' equity     
       
Current liabilities:     
 Accounts payable $  1,670  $  1,732  
 Accrued expenses    13,390     15,847  
 Acquisition-related obligations    2,597     2,179  
 Lease liabilities - short-term    1,666     -   
Total current liabilities    19,323     19,758  
       
Lease liabilities - long-term    4,755     -   
Deferred tax liabilities    823     484  
Other long-term liabilities    2,797     2,611  
Total liabilities    27,698     22,853  
       
Stockholders' equity     
 Common stock    215     211  
 Additional paid-in capital    103,673     98,442  
 Retained earnings    54,117     45,831  
 Accumulated other comprehensive loss    (4,894)    (3,900) 
 Treasury stock    (10,795)    (10,349) 
Total stockholders' equity    142,316     130,235  
       
Total liabilities and stockholders' equity $  170,014  $  153,088  


          
 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 nine months ended 
  September 30, 2019 September 30, 2018 September 30, 2019 September 30, 2018 
          
Net sales$  29,100  $  24,165 $  87,062 $  77,179  
Cost of sales   8,934     6,910    27,117    22,458  
          
Gross profit   20,166     17,255    59,945    54,721  
          
Operating expenses:        
 Sales and marketing   7,429     6,622    22,887    20,504  
 General and administrative   4,551     3,983    14,026    13,227  
 Research and development   2,281     2,037    6,777    5,850  
 Gain on divestiture   -     -    -    (5,876) 
          
          
Total operating expenses   14,261     12,642    43,690    33,705  
          
Income from operations   5,905     4,613    16,255    21,016  
          
Other income:        
 Other income (loss), net   (15)    117    236    177  
          
Income before income taxes   5,890     4,730    16,491    21,193  
          
Provision for income taxes   706     416    3,170    4,275  
          
Net income$  5,184  $  4,314 $  13,321 $  16,918  
          
Earnings per share of common stock        
 Basic$  0.26  $  0.22 $  0.68 $  0.87  
 Diluted$  0.25  $  0.21 $  0.66 $  0.84  
          
Weighted - average shares outstanding:        
 Basic   19,871     19,503    19,731    19,369  
 Diluted   20,378     20,293    20,277    20,258  
          
          
Cash dividends declared per common share$  0.085  $  0.070 $  0.255 $  0.210  
          
          


                   
                 
 LEMAITRE VASCULAR, INC (NASDAQ: LMAT)            
 SELECTED NET SALES INFORMATION              
 (amounts in thousands)               
 (unaudited)               
                 
                 
  For the three months ended  For the nine months ended
  September 30, 2019 September 30, 2018 September 30, 2019 September 30, 2018
  $ % $ % $ % $ %
Net Sales by Geography               
 Americas$  17,698 61% $  14,943 62% $  51,584 59% $  46,885 61%
 Europe/Middle East/Africa   9,452 32%    7,856 32%    29,479 34%    25,685 33%
 Asia/Pacific Rim   1,950 7%    1,366 6%    5,999 7%    4,609 6%
Total Net Sales$  29,100 100% $  24,165 100% $  87,062 100% $  77,179 100%
                 
                 


            
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 September 30, 2019         
  Net sales as reported $  29,100        
  Impact of currency exchange rate fluctuations    436        
  Net impact of acquisitions excluding currency    (2,284)       
    Adjusted net sales   $  27,252      
            
 For the three months ended September 30, 2018         
  Net sales as reported $  24,165        
    Adjusted net sales   $  24,165      
            
   Adjusted net sales increase for the three months ended September 30, 2019 $  3,087   13%   
            
            
Reconciliation between GAAP and Non-GAAP projected sales growth:         
 For the three months ending December 31, 2019         
  Net sales per guidance (midpoint) $  30,548        
  Impact of currency exchange rate fluctuations    157        
  Net impact of acquisitions excluding currency    (1,172)       
    Adjusted projected net sales   $  29,533      
            
 For the three months ended December 31, 2018         
  Net sales as reported $  28,389        
    Adjusted net sales   $  28,389      
            
   Adjusted projected net sales increase for the three months ending December 31, 2019 $  1,144   4%   
            
            
Reconciliation between GAAP and Non-GAAP projected operating income:        
 For the three months ending December 31, 2019         
  Operating income per guidance (midpoint) $  5,876        
  Adjusted projected operating income   $  5,876      
            
 For the three months ended December 31, 2018         
  Operating income as reported $  7,193        
  Impact of gain on acquisition    (1,598)       
    Adjusted operating income   $  5,595      
            
   Adjusted projected operating income increase for the three months ending December 31, 2019   $  281   5%   
            
            
Reconciliation between GAAP and Non-GAAP projected earnings per share:        
 For the three months ending December 31, 2019         
  Earnings per share per guidance (midpoint) $  0.23        
    Adjusted projected earnings per share   $  0.23      
            
 For the three months ended December 31, 2018         
  Earnings per share as reported $  0.30        
  Less earnings per share from gains on acquisitions and divestitures, net of tax $  (0.08)       
    Adjusted earnings per share   $  0.22      
            
   Adjusted projected earnings per share increase for the three months ending December 31, 2019   $  0.01   5%   
            
            
Reconciliation between GAAP and Non-GAAP projected sales growth:         
 For the year ending December 31, 2019         
  Net sales per guidance (midpoint) $  117,611        
  Impact of currency exchange rate fluctuations    2,213        
  Net impact of acquisitions excluding currency    (7,701)       
    Adjusted projected net sales   $  112,123      
            
 For the year ended December 31, 2018         
  Net sales as reported $  105,568        
  Net impact of divestitures excluding currency    (787)       
    Adjusted net sales   $  104,781      
            
   Adjusted projected net sales increase for the year ending December 31, 2019 $  7,342   7%   
            
            
            
            
            
Reconciliation between GAAP and Non-GAAP projected operating income:        
 For the year ending December 31, 2019         
  Operating income per guidance (midpoint) $  22,132        
  Add back restructuring charge    147        
  Adjusted projected operating income   $  22,279      
            
 For the year ended December 31, 2018         
  Operating income as reported $  28,209        
  Impact of gains on acquisitions and divestitures    (7,474)       
    Adjusted operating income   $  20,735      
            
   Adjusted projected operating income increase for the year ending December 31, 2019   $  1,544   7%   
            
            
Reconciliation between GAAP and Non-GAAP projected earnings per share:        
 For the year ending December 31, 2019         
  Earnings per share per guidance (midpoint) $  0.89        
  Add back earnings per share from restructuring charge, net of tax $  0.00        
    Adjusted projected earnings per share   $  0.89      
            
 For the year ended December 31, 2018         
  Earnings per share as reported $  1.13        
  Less earnings per share from gains on acquisitions and divestitures, net of tax $  (0.30)       
    Adjusted earnings per share   $  0.83      
            
   Adjusted projected earnings per share increase for the year ending December 31, 2019   $  0.06   7%   
            
            
            
    For the three months ended For the nine months ended 
    September 30, 2019 September 30, 2018 September 30, 2019 September 30, 2018 
Reconciliation between GAAP Net Income and Non-GAAP EBITDA         
 Net income as reported $  5,184  $  4,314  $  13,321  $  16,918  
 Interest (income) expense, net    (193)    (192)    (574)    (452) 
 Amortization and depreciation expense    1,345     1,006     3,975     3,108  
 Provision for income taxes    706     416     3,170     4,275  
            
 EBITDA $  7,042  $  5,544  $  19,892  $  23,849  
            
 EBITDA percentage increase    27%    -17% 
            
            

            

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