LeMaitre Q3 2023 Financial Results

BURLINGTON, Mass., Nov. 01, 2023 (GLOBE NEWSWIRE) -- LeMaitre (Nasdaq:LMAT), a provider of vascular devices, implants and services, today reported Q3 2023 results, announced a $0.14/share quarterly dividend and provided guidance.

Q3 2023 Financial Results

  • Sales $47.4mm, +21% (+16% organic) vs. Q3 2022
  • Gross margin 65.0%, +80 bps
  • Op. income $9.2mm, +49%
  • Op. margin 19%
  • Net income $7.5mm, +38%
  • Earnings per diluted share $0.33, +36%
  • Cash up $6.8mm to $97.0mm

Bovine patches (+22%), valvulotomes (+27%), bovine grafts (+15%) and carotid shunts (+24%) drove Q3 sales. APAC sales increased 30%, EMEA 24% and the Americas 20%.

The gross margin increased to 65.0% in Q3 (vs. 64.2% in Q3 2022) driven largely by price increases.

Operating income of $9.2mm was up 49% vs. Q3 2022. Operating expenses grew 14% year-over-year due to sales rep growth (118 to 136) and higher commissions, as well as CE-related regulatory costs.

George LeMaitre, Chairman and CEO, said “21% sales growth in Q3 and 49% op. income growth resulted from price increases, restrained op. expenses and a return-to-hospital by patients and staff. Our profitability and $97.0mm cash-on-hand provide safety and strategic optionality.”

Business Outlook

 Q4 2023 GuidanceFull Year 2023 Guidance
Sales$48.0mm - $50.0mm
(Mid: $49.0mm, +20%, +16% Org.)
$192.6mm - $194.6mm
(Mid: $193.6mm, +20%, +17% Org.)
Gross Margin65.0%64.9%
Op. Inc.$9.4mm - $10.7mm
(Mid: $10.0mm, +44%)
$35.9mm - $37.2mm
(Mid $36.5mm, +36%)
Op. Inc. Ex-Special*-$36.4mm - $37.7mm
(Mid $37.0mm, +24%)
EPS$0.34 - $0.38
(Mid: $0.36, +43%)
$1.30 - $1.35
(Mid: $1.33, +42%)
EPS Ex-Special*-$1.32 - $1.36
(Mid: $1.34, +26%)

*Special charges are related to the St. Etienne factory closure.

Quarterly Dividend

On October 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 November 30, 2023 to shareholders of record on November 16, 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 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 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, including 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 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 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.

(amounts in thousands)     
   September 30, 2023 December 31, 2022 
Current assets:     
 Cash and cash equivalents $18,051  $19,134  
 Short-term marketable securities  78,967   63,557  
 Accounts receivable, net  23,882   22,040  
 Inventory and other deferred costs  56,187   50,271  
 Prepaid expenses and other current assets  5,097   6,731  
Total current assets  182,184   161,733  
Property and equipment, net  21,357   17,901  
Right-of-use leased assets  15,850   15,634  
Goodwill  65,945   65,945  
Other intangibles, net  43,199   46,527  
Deferred tax assets  2,325   1,745  
Other assets  3,152   991  
Total assets $334,012  $310,476  
Liabilities and stockholders' equity     
Current liabilities:     
 Accounts payable $4,371  $2,903  
 Accrued expenses  21,788   19,967  
 Acquisition-related obligations  121   573  
 Lease liabilities - short-term  2,749   1,886  
Total current liabilities  29,029   25,329  
Lease liabilities - long-term  14,132   14,710  
Deferred tax liabilities  69   69  
Other long-term liabilities  2,145   2,167  
Total liabilities  45,375   42,275  
Stockholders' equity     
 Common stock  239   237  
 Additional paid-in capital  198,254   189,268  
 Retained earnings  110,081   97,773  
 Accumulated other comprehensive loss  (6,705)  (6,031) 
 Treasury stock  (13,232)  (13,046) 
Total stockholders' equity  288,637   268,201  
Total liabilities and stockholders' equity $334,012  $310,476  

(amounts in thousands, except per share amounts)       
  For the three months ended For the nine months ended
  September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022
Net sales$47,411  $39,028  $144,601  $120,697 
Cost of sales 16,596   13,958   50,817   41,855 
Gross profit 30,815   25,070   93,784   78,842 
Operating expenses:       
Sales and marketing 9,673   8,229   30,786   24,321 
General and administrative 7,738   7,229   23,392   21,812 
Research and development 4,224   3,462   12,615   9,740 
Restructuring -   -   485   3,107 
Total operating expenses 21,635   18,920   67,278   58,980 
Income from operations 9,180   6,150   26,506   19,862 
Other income (expense):       
Interest income 835   264   2,085   539 
Foreign currency gain (loss) (189)  (266)  (429)  (709)
Income before income taxes 9,826   6,148   28,162   19,692 
Provision for income taxes 2,324   692   6,522   4,683 
Net income$7,502  $5,456  $21,640  $15,009 
Earnings per share of common stock       
Basic$0.34  $0.25  $0.97  $0.68 
Diluted$0.33  $0.25  $0.97  $0.68 
Weighted - average shares outstanding:       
Basic 22,263   21,984   22,196   21,959 
Diluted 22,481   22,217   22,411   22,149 
Cash dividends declared per common share $0.140  $0.125  $0.420  $0.375 

(amounts in thousands)               
  For the three months ended For the nine months ended
  September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022
  $ % $ % $ % $ %
Net Sales by Geography               
 Americas$31,863 67% $26,627 68% $97,496 67% $82,024 68%
 Europe, Middle East and Africa 12,322 26%  9,922 25%  38,179 26%  31,165 26%
 Asia Pacific 3,226 7%  2,479 7%  8,926 7%  7,508 6%
Total Net Sales$47,411 100% $39,028 100% $144,601 100% $120,697 100%

(amounts in thousands)         
    For the three months ended For the nine months ended 
    September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 
Reconciliation between GAAP and Non-GAAP EBITDA         
 Net income as reported $7,502  $5,456  $21,640  $15,009  
 Interest (income) expense, net  (835)  (264)  (2,085)  (539) 
 Amortization and depreciation expense  2,395   2,328   7,072   7,145  
 Provision for income taxes  2,324   692   6,522   4,683  
 EBITDA $11,386  $8,212  $33,149  $26,298  
 EBITDA percentage increase    39%    26% 

(amounts in thousands)       
Reconciliation between GAAP and Non-GAAP sales growth:       
 For the three months ended September 30, 2023       
  Net sales as reported $47,411      
  Net distribution sales  (1,341)     
  Impact of currency exchange rate fluctuations  (728)     
  Adjusted net sales   $45,342   
 For the three months ended September 30, 2022       
  Net sales as reported $39,028      
  Adjusted net sales   $39,028   
  Adjusted net sales increase for the three months ended September 30, 2023   $6,314 16% 
Reconciliation between GAAP and Non-GAAP projected sales growth:       
 For the three months ending December 31, 2023       
  Net sales per guidance (midpoint) $49,000      
  Net distribution sales  (1,341)     
  Impact of currency exchange rate fluctuations  (333)     
  Adjusted projected net sales   $47,326   
 For the three months ended December 31, 2022       
  Net sales as reported $40,954      
  Adjusted net sales   $40,954   
  Adjusted projected net sales increase for the three months ending December 31, 2023   $6,372 16% 
Reconciliation between GAAP and Non-GAAP projected sales growth:       
 For the year ending December 31, 2023       
  Net sales per guidance (midpoint) $193,601      
  Net distribution sales  (3,915)     
  Impact of currency exchange rate fluctuations  3      
  Adjusted projected net sales   $189,689   
 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   $28,038 17% 
Reconciliation between GAAP and Non-GAAP projected operating income:       
 For the year ending December 31, 2023       
  Operating income per guidance (midpoint) $36,506      
  Impact of special charge  485      
  Adjusted projected operating income   $36,991   
 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   $7,055 24% 
Reconciliation between GAAP and Non-GAAP projected EPS:       
 For the year ending December 31, 2023       
  EPS per guidance (midpoint) $1.33      
  Impact of special charge, including tax  0.01      
  Adjusted EPS   $1.34   
 For the year ended December 31, 2022       
  EPS as reported $0.93      
  Impact of special charge, including tax  0.13      
  Adjusted EPS   $1.06   
  Adjusted projected EPS increase for the year ending December 31, 2023   $0.28 26% 


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