LeMaitre Q2 2022 Financial Results

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LeMaitre Q2 2022 Financial Results

July 28, 2022 at 4:05 PM EDT

BURLINGTON, Mass., July 28, 2022 (GLOBE NEWSWIRE) -- LeMaitre (Nasdaq:LMAT), a provider of vascular devices, implants and services, today reported Q2 2022 results, announced a $0.125/share quarterly dividend and provided guidance.

Q2 2022 Financial Results

Sales of $42.1mm, +4% (+8% organic) vs. Q2 2021
Gross margin of 66.0%
Op. income reported $5.8mm, -48%
Op. income ex. special charge $8.9mm, -20%
Earnings per diluted share reported $0.16, -60%
Earnings per diluted share ex. special charge $0.29, -26%
Cash and investments +$4.8mm to $75.7mm

Biologics drove Q2 2022 sales growth: XenoSure (+21%), allografts (+25%) and Artegraft (+11%). Q2 organic sales growth was led by EMEA (+11%) and APAC (+11%), while the Americas grew 6%. The strong dollar reduced sales by $1.7mm.

The gross margin increased to 66.0% in Q2 2022 (vs. 65.8%). The Company had 203 direct labor employees on staff as of June 30, up 54% year-over-year. The Company closed its St. Etienne factory in Q2 2022, resulting in a $3.1mm special charge.

Q2 2022 operating margin was 14%; excluding the $3.1mm special charge the operating margin was 21%. Excluding the special charge, Q2 operating expense growth was 21%, driven by a 26% larger salesforce on June 30 (111 reps) and regulatory expenses.

George LeMaitre, Chairman and CEO, said “Based on better-than-expected Q2 sales, we increased annual guidance to 10% organic growth. We also achieved several milestones: we opened a Seoul office, closed a French factory, filed for Chinese XenoSure cardiac approval and received the Omniflow II CE Mark.”

Business Outlook

	Q3 2022 Guidance	Q4 2022 Guidance	2022 Full Year Guidance
Sales	$39.0mm - $41.0mm (Mid: $40.0mm, +4%, +10% Org.)	$41.2mm - $43.2mm (Mid: $42.2mm, +7%, +11% Org.)	$162.7mm - $165.3mm (Mid:$164.0mm, +6%, +10% Org.)
Gross Margin	66.7%	67.5%	66.5%
Op. Income	$6.8mm - $8.2mm (Mid: $7.5mm, -17%)	$8.5mm - $9.9mm (Mid: $9.2mm, +10%)	$29.5mm - $31.2mm (Mid $30.4mm, -17%)
Op. Income Ex-Spec. Charge	-	-	$32.7mm - $34.4mm (Mid: $33.6mm, -8%)
EPS	$0.24 - $0.29 (Mid: $0.27, -10%)	$0.29 - $0.35 (Mid: $0.32, +15%)	$0.99 - $1.05 (Mid: $1.02, -19%)
EPS Ex-Spec. Charge	-	-	$1.14 - $1.19 (Mid: $1.17, -7%)

Quarterly Dividend

On July 26, 2022, the Company's Board of Directors approved a quarterly dividend of $0.125/share of common stock. The dividend will be paid on September 8, 2022 to shareholders of record on August 25, 2022.

Share Repurchase Program

On February 22, 2022, the Company's Board of Directors authorized the repurchase of up to $20.0mm of the Company’s common stock. The repurchase program may be suspended or discontinued at any time and will conclude on February 22, 2023, 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 operating income, operating margin, and EPS excluding special charge for Q2 2022 and guidance for operating income and EPS excluding special charge. 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, 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 operating income, operating margin and EPS excluding special charge for Q2 2022 and guidance for operating income and EPS excluding special charge provides an alternative and meaningful view of the Company’s profitability excluding the impact of the closure of the Company’s St. Etienne, France factory, a non-recurring event.

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.

CONTACT:
J.J. Pellegrino, CFO, LeMaitre
781-425-1691
jjpellegrino@lemaitre.com


LEMAITRE VASCULAR, INC. (NASDAQ: LMAT)
CONDENSED CONSOLIDATED BALANCE SHEETS
(amounts in thousands)


		June 30, 2022			December 31, 2021
		(unaudited)
Assets

Current assets:
	Cash and cash equivalents	$	20,788		$	13,855
	Short-term marketable securities		54,895			56,104
	Accounts receivable, net		21,542			19,631
	Inventory and other deferred costs		47,192			46,104
	Prepaid expenses and other current assets		3,243			4,189
	Asset held for sale		826			-
Total current assets			148,486			139,883

Property and equipment, net			15,753			17,059
Right-of-use leased assets			16,290			15,071
Goodwill			65,945			65,945
Other intangibles, net			49,598			52,710
Deferred tax assets			2,369			1,566
Other assets			984			568

Total assets		$	299,425		$	292,802


Liabilities and stockholders' equity

Current liabilities:
	Accounts payable	$	2,844		$	2,340
	Accrued expenses		17,009			16,332
	Acquisition-related obligations		1,758			1,271
	Lease liabilities - short-term		1,794			1,870
Total current liabilities			23,405			21,813

Lease liabilities - long-term			15,420			14,067
Deferred tax liabilities			64			70
Other long-term liabilities			2,503			2,701
Total liabilities			41,392			38,651

Stockholders' equity
	Common stock		235			235
	Additional paid-in capital		184,605			181,630
	Retained earnings		92,190			88,125
	Accumulated other comprehensive loss		(6,444	)		(3,435	)
	Treasury stock		(12,553	)		(12,404	)
Total stockholders' equity			258,033			254,151

Total liabilities and stockholders' equity		$	299,425		$	292,802

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, 2022			June 30, 2021			June 30, 2022			June 30, 2021

Net sales		$	42,108		$	40,670		$	81,669		$	76,553
Cost of sales			14,298			13,909			27,897			25,993

Gross profit			27,810			26,761			53,772			50,560

Operating expenses:
	Sales and marketing		8,242			6,803			16,092			13,269
	General and administrative		7,331			6,200			14,583			12,744
	Research and development		3,346			2,652			6,278			5,496
	Restructuring		3,107			-			3,107			-
Total operating expenses			22,026			15,655			40,060			31,509

Income from operations			5,784			11,106			13,712			19,051

Other income (expense), net
	Interest income		167			1			275			2
	Interest expense		-			(495	)		-			(1,072	)
	Foreign currency gain (loss)		(403	)		(157	)		(443	)		(33	)

Income before income taxes			5,548			10,455			13,544			17,948

Provision for income taxes			2,033			2,156			3,991			3,720

Net income		$	3,515		$	8,299		$	9,553		$	14,228

Earnings per share of common stock
	Basic	$	0.16		$	0.40		$	0.44		$	0.69
	Diluted	$	0.16		$	0.40		$	0.43		$	0.68

Weighted - average shares outstanding:
	Basic		21,958			20,611			21,947			20,579
	Diluted		22,129			20,959			22,115			20,900


Cash dividends declared per common share		$	0.125		$	0.110		$	0.250		$	0.220


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, 2022				June 30, 2021				June 30, 2022				June 30, 2021
		$		%		$		%		$		%		$		%
Net Sales by Geography
	Americas	$	28,854	69	%	$	27,329	67	%	$	55,397	68	%	$	51,028	67	%
	Europe, Middle East and Africa		10,749	25	%		10,803	27	%		21,243	26	%		20,665	27	%
	Asia Pacific		2,505	6	%		2,538	6	%		5,029	6	%		4,860	6	%
Total Net Sales		$	42,108	100	%	$	40,670	100	%	$	81,669	100	%	$	76,553	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 June 30, 2022
		Net sales as reported	$	42,108
		Impact of currency exchange rate fluctuations		1,686
		Adjusted net sales				$	43,794

	For the three months ended June 30, 2021
		Net sales as reported	$	40,670
		Adjusted net sales				$	40,670

		Adjusted net sales increase for the three months ended June 30, 2022				$	3,124		8	%


Reconciliation between GAAP and Non-GAAP projected sales growth:
	For the three months ending September 30, 2022
		Net sales per guidance (midpoint)	$	40,045
		Impact of currency exchange rate fluctuations		1,974
		Adjusted projected net sales				$	42,019

	For the three months ended September 30, 2021
		Net sales as reported	$	38,368
		Adjusted net sales				$	38,368

		Adjusted projected net sales increase for the three months ending September 30, 2022				$	3,651		10	%


Reconciliation between GAAP and Non-GAAP projected sales growth:
	For the three months ending December 31, 2022
		Net sales per guidance (midpoint)	$	42,240
		Impact of currency exchange rate fluctuations		1,692
		Adjusted projected net sales				$	43,932

	For the three months ended December 31, 2021
		Net sales as reported	$	39,503
		Adjusted net sales				$	39,503

		Adjusted projected net sales increase for the three months ending December 31, 2022				$	4,429		11	%


Reconciliation between GAAP and Non-GAAP projected sales growth:
	For the year ending December 31, 2022
		Net sales per guidance (midpoint)	$	163,954
		Impact of currency exchange rate fluctuations		6,170
		Adjusted projected net sales				$	170,124

	For the year ended December 31, 2021
		Net sales as reported	$	154,424
		Adjusted net sales				$	154,424

		Adjusted projected net sales increase for the year ending December 31, 2022				$	15,700		10	%


Reconciliation between GAAP and Non-GAAP operating income:
	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

	For the three months ended June 30, 2021
		Operating income as reported	$	11,106
		Adjusted operating income				$	11,106

		Adjusted operating income decrease for the three months ended June 30, 2022				$	(2,215	)	-20	%


Reconciliation between GAAP and Non-GAAP projected operating income:
	For the year ending December 31, 2022
		Operating income per guidance (midpoint)	$	30,374
		Impact of special charge		3,207
		Adjusted projected operating income				$	33,581

	For the year ended December 31, 2021
		Operating income as reported	$	36,425
		Adjusted operating income				$	36,425

		Adjusted projected operating income decrease for the year ending December 31, 2022				$	(2,844	)	-8	%


Reconciliation between GAAP and Non-GAAP EPS:
	For the three months ended June 30, 2022
		EPS as reported	$	0.16
		Impact of special charge		0.13
		Adjusted EPS				$	0.29

	For the three months ended June 30, 2021
		EPS as reported	$	0.40
		Adjusted EPS				$	0.40

		Adjusted EPS decrease for the three months ended June 30, 2022				$	(0.10	)	-26	%


Reconciliation between GAAP and Non-GAAP projected EPS:
	For the year ending December 31, 2022
		EPS per guidance (midpoint)	$	1.02
		Impact of special charge		0.15
		Adjusted EPS				$	1.17

	For the year ended December 31, 2021
		EPS as reported	$	1.25
		Adjusted EPS				$	1.25

		Adjusted projected EPS decrease for the year ending December 31, 2022				$	(0.08	)	-7	%


EMEA sales growth reconciliation between GAAP and Non-GAAP:
	For the three months ended June 30, 2022
		Net sales as reported	$	10,749
		Impact of currency exchange rate fluctuations		1,276
		EMEA adjusted net sales				$	12,025

	For the three months ended June 30, 2021
		Net sales as reported	$	10,803
		Adjusted net sales				$	10,803

		EMEA adjusted net sales increase for the three months ended June 30, 2022				$	1,222		11	%


APAC sales growth reconciliation between GAAP and Non-GAAP:
	For the three months ended June 30, 2022
		Net sales as reported	$	2,505
		Impact of currency exchange rate fluctuations		313
		APAC adjusted net sales				$	2,818

	For the three months ended June 30, 2021
		Net sales as reported	$	2,538
		Adjusted net sales				$	2,538

		APAC adjusted net sales increase for the three months ended June 30, 2022				$	280		11	%


Americas sales growth reconciliation between GAAP and Non-GAAP:
	For the three months ended June 30, 2022
		Net sales as reported	$	28,854
		Impact of currency exchange rate fluctuations		98
		Americas adjusted net sales				$	28,952

	For the three months ended June 30, 2021
		Net sales as reported	$	27,329
		Adjusted net sales				$	27,329

		Americas adjusted net sales increase for the three months ended June 30, 2022				$	1,623		6	%


Reconciliation between GAAP and Non-GAAP operating margin:
	For the three months ended June 30, 2022
		Operating margin as reported		14	%
		Impact of special charge		7	%
		Adjusted operating margin					21	%

Reconciliation between GAAP and Non-GAAP operating expenses:
	For the three months ended June 30, 2022
		Operating expenses as reported	$	22,026
		Impact of special charge		(3,107	)
		Adjusted operating expenses				$	18,919

	For the three months ended June 30, 2021
		Operating expenses as reported	$	15,655
		Adjusted operating income				$	15,655

		Adjusted operating expense decrease for the three months ended June 30, 2022				$	3,264		21	%

Source: LeMaitre Vascular, Inc.

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LeMaitre Q2 2022 Financial Results

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