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Press Release

LeMaitre Vascular Announces Q3 2019 Financial Results

October 23, 2019 at 4:05 PM EDT

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 Sales N/A $30.1mm - $30.9mm
(Midpoint:+8% reported, +4% organic)
Q4 2019 Gross Margin N/A 68.2%
Q4 2019 Op. Income N/A $5.6mm - $6.1mm
(Midpoint: -18%)
(Midpoint Ex-Special Items: +5%)
Q4 2019 EPS N/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 Margin 68.7% 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 %  
                       
                       
CONTACT: J.J. Pellegrino, CFO, LeMaitre Vascular
781-425-1691
jjpellegrino@lemaitre.com

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Source: LeMaitre Vascular, Inc.