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Press Release

LeMaitre Vascular Announces Q2 2019 Financial Results

July 24, 2019 at 4:05 PM EDT

BURLINGTON, Mass., July 24, 2019 (GLOBE NEWSWIRE) -- LeMaitre Vascular, Inc. (Nasdaq:LMAT), a provider of vascular devices, implants and services, today reported Q2 2019 results, provided guidance, and announced a $0.085/share dividend.

Q2 2019 Results

  • Record sales of $29.5mm, +9% (+5% organic) vs. Q2 2018
  • Operating income of $5.9mm vs. $11.5mm, -49% (+6% excluding special items)
  • Net income of $4.6mm vs. $8.8mm, -47% (+10% excluding special items)
  • Earnings of $0.23 per diluted share vs. $0.43, -47% (+10% excluding special items)
  • EBITDA of $7.2mm vs. $12.4mm, -42% (+11% excluding special items)

The Company posted record Q2 2019 sales in both the Americas (+9%) and Europe/Middle East/Africa (+10%). Asia/Pac sales were also up (+5%). Sales were driven by embolectomy catheters, allografts and polyester grafts. 

Gross margin decreased to 68.9% in Q2 2019 from 70.3% in Q2 2018, primarily due to the two 2018 acquisitions and the strong US dollar.

Operating expenses in Q2 2019 were $14.4mm (+7% excluding special items) driven by more reps (110) and increased R&D (8% of sales).

Business Outlook

  Previous Guidance (5/1/2019) Current Guidance
Q3 2019 Sales N/A $27.8mm - $28.6mm
(Midpoint:+17% reported, +11% organic)
Q3 2019 Gross Margin N/A 69.0%
Q3 2019 Operating Income N/A $5.1mm - $5.6mm
(Midpoint: +16%)
Q3 2019 Earnings Per Share N/A $0.20 - $0.22
(Midpoint: +1%)
2019 Sales $113.5mm - $114.7mm
(Midpoint: +8% reported, +6% organic)
$115.5mm - $116.7mm
(Midpoint: +10% reported, +7% organic)
2019 Gross Margin 68.5% 68.7%
2019 Operating Income $20.9mm - $21.7mm
(Midpoint: -25%)
(Midpoint Ex-Special Items: +4%)
$21.5mm - $22.4mm
(Midpoint: -22%)
(Midpoint Ex-Special Items: +6%)
2019 Earnings Per Share $0.82 - $0.86
(Midpoint: -26%)
(Midpoint Ex-Special Items: +2%)
$0.84 - $0.88
(Midpoint: -24%)
(Midpoint Ex-Special Items: +4%)

Quarterly Dividend

On July 22, 2019, the Company's Board of Directors approved a quarterly dividend of $0.085/share of common stock. The dividend will be paid on September 5, 2019 to shareholders of record on August 21, 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 5595698. 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, 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 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, divestures, 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 calculated the percentage change in its Q2 2019 operating income, net income, earnings per share, EBITDA and operating expenses excluding “special items.”  Those special items were the gain on the Company’s Q2 2018 divestiture 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. The Company also believes that evaluating the increase in its operating expenses excluding such items provides an approximation of the ongoing operating expenses of its business without the impact of highly variable events.

The Company has also identified the percentage change in its projected 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 Q3 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 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; 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)          
             
             
      June 30, 2019   December 31, 2018  
      (unaudited)      
Assets          
             
Current assets:          
  Cash and cash equivalents   $   13,264     $   26,318    
  Short-term marketable securities       34,979         21,668    
  Accounts receivable, net       15,548         15,721    
  Inventory and other deferred costs       32,243         27,388    
  Prepaid expenses and other current assets       2,125         2,922    
Total current assets       98,159         94,017    
             
Property and equipment, net       14,163         14,102    
Right-of-use leased assets       6,428         -     
Goodwill       29,860         29,868    
Other intangibles, net       12,632         13,692    
Deferred tax assets       1,209         1,215    
Other assets       210         194    
             
Total assets   $   162,661     $   153,088    
             
             
Liabilities and stockholders' equity          
             
Current liabilities:          
  Accounts payable   $   1,427     $   1,732    
  Accrued expenses       12,097         15,847    
  Acquisition-related obligations        2,200         2,179    
  Lease liabilities - short-term       1,698         -     
Total current liabilities       17,422         19,758    
             
Lease liabilities - long-term       5,152         -     
Deferred tax liabilities       484         484    
Other long-term liabilities       2,066         2,611    
Total liabilities       25,124         22,853    
             
Stockholders' equity          
  Common stock       213         211    
  Additional paid-in capital       100,890         98,442    
  Retained earnings        50,624         45,831    
  Accumulated other comprehensive loss       (3,818 )       (3,900 )  
  Treasury stock       (10,372 )       (10,349 )  
Total stockholders' equity       137,537         130,235    
             
Total liabilities and stockholders' equity   $   162,661     $   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 six months ended  
    June 30, 2019   June 30, 2018   June 30, 2019   June 30, 2018  
                   
Net sales $   29,483   $   27,020     $   57,962   $   53,014    
Cost of sales     9,168       8,028         18,183       15,548    
                   
Gross profit     20,315       18,992         39,779       37,466    
                   
Operating expenses:                
  Sales and marketing     7,613       6,792         15,458       13,882    
  General and administrative     4,531       4,547         9,475       9,244    
  Research and development     2,256       1,988         4,496       3,813    
  Gain on divestiture     -       (5,876 )       -       (5,876 )  
                   
                   
Total operating expenses     14,400       7,451         29,429       21,063    
                   
Income from operations     5,915       11,541         10,350       16,403    
                   
Other income:                
  Other income (loss), net     173       6         251       60    
                   
Income before income taxes     6,088       11,547         10,601       16,463    
                   
Provision for income taxes     1,464       2,796         2,464       3,859    
                   
Net income  $   4,624   $   8,751     $   8,137   $   12,604    
                   
Earnings per share of common stock                
  Basic $   0.23   $   0.45     $   0.41   $   0.65    
  Diluted $   0.23   $   0.43     $   0.40   $   0.62    
                   
Weighted - average shares outstanding:                
  Basic     19,680       19,320         19,660       19,301    
  Diluted     20,246       20,260         20,226       20,243    
                   
                   
Cash dividends declared per common share  $   0.085   $   0.070     $   0.170   $   0.140    
                   


                                   
  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, 2019   June 30, 2018   June 30, 2019   June 30, 2018  
    $   %   $   %   $   %   $   %  
Net Sales by Geography                                
  Americas $   17,511   59 %   $   16,082   59 %   $   33,886   58 %   $   31,942   60 %  
  Europe/Middle East/Africa     10,014   34 %       9,074   34 %       20,027   35 %       17,829   34 %  
  Asia/Pacific Rim     1,958   7 %       1,864   7 %       4,049   7 %       3,243   6 %  
Total Net Sales $   29,483   100 %   $   27,020   100 %   $   57,962   100 %   $   53,014   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, 2019                  
    Net sales as reported   $   29,483                
    Impact of currency exchange rate fluctuations       710                
    Net impact of acquisitions excluding currency       (1,973 )              
      Adjusted net sales       $   28,220            
                       
  For the three months ended June 30, 2018                  
    Net sales as reported   $   27,020                
    Net impact of divestiture excluding currency       (51 )              
      Adjusted net sales       $   26,969            
                       
     Adjusted net sales increase for the three months ended June 30, 2019      $   1,251       5 %      
                       
                       
Reconciliation between GAAP and Non-GAAP operating income:                  
  For the three months ended June 30, 2019                  
    Operating income as reported   $   5,915                
    Add back restructuring charge       112                
    Adjusted operating income       $   6,027            
                       
  For the three months ended June 30, 2018                  
    Operating income as reported   $   11,541                
    Impact of gain on divestiture       (5,876 )              
      Adjusted operating income       $   5,665            
                       
     Adjusted operating income increase for the three months ended June 30, 2019        $   362       6 %      
                       
                       
Reconciliation between GAAP and Non-GAAP net income:                  
  For the three months ended June 30, 2019                  
    Net income as reported   $   4,624                
    Add back restructuring charge, net of tax       85                
    Adjusted net income       $   4,709            
                       
  For the three months ended June 30, 2018                  
    Net income as reported   $   8,751                
    Impact of gain on divestiture, net of tax       (4,453 )              
      Adjusted net income       $   4,298            
                       
     Adjusted net income increase for the three months ended June 30, 2019        $   412       10 %      
                       
                       
Reconciliation between GAAP and Non-GAAP earnings per share:                  
  For the three months ended June 30, 2019                  
    Earnings per share as reported   $   0.23                
    Add back earnings per share from restructuring charge, net of tax       0.00                
      Adjusted earnings per share       $   0.23            
                       
  For the three months ended June 30, 2018                  
    Earnings per share as reported   $   0.43                
    Less earnings per share from gain on divestiture, net of tax       (0.22 )              
      Adjusted earnings per share       $   0.21            
                       
     Adjusted earnings per share increase for the three months ended June 30, 2019        $   0.02       10 %      
                       
                       
Reconciliation between GAAP and Non-GAAP operating expenses:                  
  For the three months ended June 30, 2019                  
    Operating expenses as reported   $   14,400                
    Less restructuring charge       (112 )              
    Adjusted operating expenses       $   14,288            
                       
  For the three months ended June 30, 2018                  
    Operating expenses as reported   $   7,451                
    Less gain on divestiture       5,876                
    Adjusted operating expenses       $   13,327            
                       
     Adjusted operating expense increase for the three months ended June 30, 2019        $   961       7 %      
                       
                       
Reconciliation between GAAP and Non-GAAP projected sales growth:                  
  For the three months ended September 30, 2019                  
    Net sales per guidance   $   28,215                
    Impact of currency exchange rate fluctuations       344                
    Net impact of acquisitions excluding currency       (1,716 )              
      Adjusted projected net sales       $   26,843            
                       
  For the three months ended September 30, 2018                  
    Net sales as reported   $   24,165                
      Adjusted net sales       $   24,165            
                       
     Adjusted projected net sales increase for the three months ended September 30, 2019    $   2,678       11 %      
                       
                       
Reconciliation between GAAP and Non-GAAP projected sales growth:                  
  For the year ended December 31, 2019                  
    Net sales per guidance   $   116,140                
    Impact of currency exchange rate fluctuations       2,093                
    Net impact of acquisitions excluding currency       (6,540 )              
      Adjusted net sales       $   111,693            
                       
  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 ended December 31, 2019    $   6,912       7 %      
                       
                       
                       
Reconciliation between GAAP and Non-GAAP projected operating income:                
  For the year ended December 31, 2019                  
    Operating income per guidance   $   21,943                
    Add back restructuring charge       112                
    Adjusted projected operating income       $   22,055            
                       
  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 ended December 31, 2019        $   1,320       6 %      
                       
                       
Reconciliation between GAAP and Non-GAAP projected earnings per share:                
  For the year ended December 31, 2019                  
    Earnings per share per guidance   $   0.86                
    Add back earnings per share from restructuring charge, net of tax       0.00                
      Adjusted earnings per share       $   0.86            
                       
  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 ended December 31, 2019        $   0.03       4 %      
                       
                       
        For the three months ended   For the six months ended  
        June 30, 2019   June 30, 2018   June 30, 2019   June 30, 2018  
Reconciliation between GAAP and Non-GAAP EBITDA                  
  Net income as reported   $   4,624     $   8,751     $   8,137     $   12,604    
  Interest (income) expense, net       (224 )       (164 )       (381 )       (260 )  
  Amortization and depreciation expense       1,346         1,066         2,630         2,102    
  Provision for income taxes       1,464         2,796         2,464         3,859    
                       
  EBITDA   $   7,210     $   12,449     $   12,850     $   18,305    
                       
  EBITDA percentage increase         -42 %         -30 %  
                       
Reconciliation between non-GAAP EBITDA and EBITDA excluding special items:              
  EBITDA   $   7,210     $   12,449            
    Impact of gain on divestiture       -          (5,876 )          
    Impact of restructuring charge       112         -             
  Adjusted EBITDA   $   7,322     $   6,573            
                       
  Adjusted EBITDA percentage increase         11 %          
                       


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

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Source: LeMaitre Vascular, Inc.