LeMaitre Q1 2023 Financial Results

BURLINGTON, Mass., May 02, 2023 (GLOBE NEWSWIRE) -- LeMaitre (Nasdaq:LMAT), a provider of vascular devices, implants and services, today reported Q1 2023 results, announced a $0.14/share quarterly dividend and provided guidance.

Q1 2023 Financial Results 

  • Sales $47.1mm, +19% (+22% organic) vs. Q1 2022
  • Op. income $7.9mm, -1%
  • Op. margin 17%
  • Net income $6.0mm, flat
  • Earnings per diluted share $0.27, -1%

Valvulotomes (+29%), carotid patches (+17%), bovine grafts (+22%), allografts (+42%) and carotid shunts (+18%) drove record sales in Q1. Sales increased 21% in the Americas, 17% in EMEA, and 6% in APAC.

The gross margin was 65.6%, flat vs. Q1 2022, helped by price increases and manufacturing efficiencies, offset by mix.

Operating income was $7.9mm, down 1% vs. Q1 2022, as increased sales and gross profits mitigated operating expense growth. Operating expenses grew 28% due to increased sales rep headcount and commissions, the return of in-person annual sales meetings, and a $0.3mm restructuring charge related to the 2022 St. Etienne factory closure.

George LeMaitre, Chairman and CEO, said “Sales surged 22% organically as hospitals staffed up, ASP increased and we increased our rep headcount by 14% to 128. Growth was spread across most products and geographies.”

Aziyo Distribution

In April the Company agreed to distribute Aziyo porcine cardiac patches in the US. LeMaitre will distribute the products for three years with an option to acquire Aziyo’s worldwide patch business during the second and third year. The patches are designed to decrease inflammation and stimulate healthy tissue formation. Aziyo’s 2022 sales of patches in the US were $6.8 million. LeMaitre expects to generate a 50% gross margin on these sales.

Business Outlook (Includes Aziyo Distribution)

 Q2 2023 Guidance2023 Full Year Guidance
Sales$47.1mm - $49.5mm
(Mid: $48.3mm, +15%, +13% Org.)
$187.1mm - $193.1mm
(Mid: $190.1mm, +18%, +15% Org.)
Gross Margin65.0%65.1%
Op. Income$8.0mm - $9.6mm
(Mid: $8.8mm, +52%)
$31.7mm - $35.6mm
(Mid $33.7mm, +26%)
Op. Income Ex-Special*$8.0mm - $9.6mm
(Mid: $8.8mm, -1%)
$32.0mm - $35.9mm
(Mid $34.0mm, +14%)
EPS$0.30 - $0.35
(Mid: $0.32, +103%)
$1.14 - $1.27
(Mid: $1.20, +29%)
EPS Ex-Special*$0.30 - $0.35
(Mid: $0.32, +10%)
$1.15 - $1.28
(Mid: $1.21, +17%)

*Special charges related to the St. Etienne factory closure were $3.1mm in Q2 2022 and $0.3mm Q1 2023.

Quarterly Dividend

On April 24, 2023, the Company's Board of Directors approved a quarterly dividend of $0.14/share of common stock. The dividend will be paid on June 1, 2023 to shareholders of record on May 17, 2023.

Share Repurchase Program

On February 21, 2023, the Company's Board of Directors authorized the repurchase of up to $25.0mm of the Company’s common stock. The repurchase program may be suspended or discontinued at any time and will conclude on February 21, 2024, unless extended by the Board.

Conference Call Reminder

Management will conduct a conference call at 5:00pm ET today. The conference call will be broadcast live over the Internet. Individuals interested in listening to the webcast can log on to the Company's website at www.lemaitre.com/investor. Access to the live call is available by registering online here. All registrants will receive dial-in information and a PIN allowing them to access the live call. The audio webcast can also be accessed live or via replay through a webcast at http://www.lemaitre.com/investor. 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

LeMaitre 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 is a registered trademark of LeMaitre Vascular, Inc. This press release may include 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 management believes that in order to better understand the Company's short- 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. This press release also provides guidance for operating income and EPS excluding the special charge relating to the closure of our St. Etienne factory and revenue related to the Aziyo distribution agreement. 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 the aforementioned non-GAAP profitability measures 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, factory closures, 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 the presentation of guidance described above for operating income and EPS provides an alternative and meaningful view of the Company’s profitability.

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. 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 status of our global regulatory approvals and compliance with regulatory requirements to market and sell our products both in the U.S. and outside of the U.S.; the duration and severity of the impact of COVID-19 on the global economy, our customers, our suppliers and our company; the risk of significant fluctuations in our quarterly and annual results due to numerous factors; 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; 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; risks related to the integration of acquisition targets; the acceleration or deceleration of product growth rates; 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, 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.

J.J. Pellegrino, CFO, LeMaitre

(amounts in thousands)    
   March 31, 2023 December 31, 2022
Current assets:    
 Cash and cash equivalents $16,677  $19,134 
 Short-term marketable securities  64,328   63,557 
 Accounts receivable, net  25,365   22,040 
 Inventory and other deferred costs  53,779   50,271 
 Prepaid expenses and other current assets  4,619   6,731 
Total current assets  164,768   161,733 
Property and equipment, net  19,242   17,901 
Right-of-use leased assets  15,527   15,634 
Goodwill  65,945   65,945 
Other intangibles, net  45,508   46,527 
Deferred tax assets  1,802   1,745 
Other assets  2,074   991 
Total assets $314,866  $310,476 
Liabilities and stockholders' equity    
Current liabilities:    
 Accounts payable $3,371  $2,903 
 Accrued expenses  17,620   19,967 
 Acquisition-related obligations  856   573 
 Lease liabilities - short-term  2,057   1,886 
Total current liabilities  23,904   25,329 
Lease liabilities - long-term  14,448   14,710 
Deferred tax liabilities  71   69 
Other long-term liabilities  2,278   2,167 
Total liabilities  40,701   42,275 
Stockholders' equity    
 Common stock  238   237 
 Additional paid-in capital  192,003   189,268 
 Retained earnings  100,714   97,773 
 Accumulated other comprehensive loss  (5,572)  (6,031)
 Treasury stock  (13,218)  (13,046)
Total stockholders' equity  274,165   268,201 
Total liabilities and stockholders' equity $314,866  $310,476 

(amounts in thousands, except per share amounts)    
  For the three months ended 
  March 31, 2023 March 31, 2022 
Net sales$47,075  $39,561  
Cost of sales 16,192   13,599  
Gross profit 30,883   25,962  
Operating expenses:    
Sales and marketing 10,897   7,850  
General and administrative 7,932   7,252  
Research and development 3,875   2,932  
Restructuring 305   -  
Total operating expenses 23,009   18,034  
Income from operations 7,874   7,928  
Other income (expense):    
Interest income 568   108  
Foreign currency loss (425)  (40) 
Income before income taxes 8,017   7,996  
Provision for income taxes 1,977   1,958  
Net income$6,040  $6,038  
Earnings per share of common stock    
Basic$0.27  $0.28  
Diluted$0.27  $0.27  
Weighted - average shares outstanding:    
Basic 22,111   21,935  
Diluted 22,274   22,103  
Cash dividends declared per common share $0.140  $0.125  

(amounts in thousands)        
  For the three months ended 
  March 31, 2023 March 31, 2022 
  $ % $ % 
Net Sales by Geography        
 Americas$32,126 68% $26,543 67% 
 Europe, Middle East and Africa 12,277 26%  10,494 27% 
 Asia Pacific 2,672 6%  2,524 6% 
Total Net Sales$47,075 100% $39,561 100% 

(amounts in thousands)    
    For the three months ended 
    March 31, 2023 March 31, 2022
Reconciliation between GAAP and Non-GAAP EBITDA    
 Net income as reported $6,040 $6,038
 Interest (income) expense, net (568) (108)
 Amortization and depreciation expense 2,351 2,373
 Provision for income taxes 1,977 1,958
 EBITDA $9,800 $10,261
 EBITDA percentage decrease   -4%

(amounts in thousands)       
Reconciliation between GAAP and Non-GAAP sales growth:       
 For the three months ended March 31, 2023       
  Net sales as reported $47,075      
  Impact of currency exchange rate fluctuations  1,052      
  Adjusted net sales   $48,127    
 For the three months ended March 31, 2022       
  Net sales as reported $39,561      
  Adjusted net sales   $39,561    
  Adjusted net sales increase for the three months ended March 31, 2023  $8,566  22% 
Reconciliation between GAAP and Non-GAAP projected sales growth:       
 For the three months ending June 30, 2023       
  Net sales per guidance (midpoint) $48,312      
  Impact of currency exchange rate fluctuations and Aziyo distribution  (879)     
  Adjusted projected net sales   $47,433    
 For the three months ended June 30, 2022       
  Net sales as reported $42,108      
  Adjusted net sales   $42,108    
  Adjusted projected net sales increase for the three months ending June 30, 2023 $5,325  13% 
Reconciliation between GAAP and Non-GAAP projected sales growth:       
 For the year ending December 31, 2023       
  Net sales per guidance (midpoint) $190,052      
  Impact of currency exchange rate fluctuations and Aziyo distribution  (4,605)     
  Adjusted projected net sales   $185,447    
 For the year ended December 31, 2022       
  Net sales as reported $161,651      
  Adjusted net sales   $161,651    
  Adjusted projected net sales increase for the year ending December 31, 2023 $23,796  15% 
Reconciliation between GAAP and Non-GAAP projected operating income:      
 For the three months ending June 30, 2023       
  Operating income per guidance (midpoint) $8,803      
  Adjusted projected operating income   $8,803    
 For the three months ended June 30, 2022       
  Operating income as reported $5,784      
  Impact of special charge  3,107      
  Adjusted operating income   $8,891    
  Adjusted projected operating income decrease for the three months ending June 30, 2023 $(88) -1% 
Reconciliation between GAAP and Non-GAAP projected operating income:      
 For the year ending December 31, 2023       
  Operating income per guidance (midpoint) $33,676      
  Impact of special charge  305      
  Adjusted projected operating income   $33,981    
 For the year ended December 31, 2022       
  Operating income as reported $26,829      
  Impact of special charge  3,107      
  Adjusted operating income   $29,936    
  Adjusted projected operating income increase for the year ending December 31, 2023 $4,045  14% 
Reconciliation between GAAP and Non-GAAP projected EPS:       
 For the three months ending June 30, 2023       
  EPS per guidance (midpoint) $0.32      
  Adjusted EPS   $0.32    
 For the three months ended June 30, 2022       
  EPS as reported $0.16      
  Impact of special charge $0.13      
  Adjusted EPS   $0.29    
  Adjusted projected EPS increase for the three months ending June 30, 2023 $0.03  10% 
Reconciliation between GAAP and Non-GAAP projected EPS:       
 For the year ending December 31, 2023       
  EPS per guidance (midpoint) $1.20      
  Impact of special charge $0.01      
  Adjusted EPS   $1.21    
 For the year ended December 31, 2022       
  EPS as reported $0.93      
  Impact of special charge $0.11      
  Adjusted EPS   $1.04    
  Adjusted projected EPS increase for the year ending December 31, 2023 $0.17  17%