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LeMaitre Vascular Q3 2011 Sales $14.6mm (+7%), Op. Income $2.0mm

10/27/11

BURLINGTON, Mass., Oct 27, 2011 (GlobeNewswire via COMTEX) --

LeMaitre Vascular, Inc. (Nasdaq:LMAT), a provider of peripheral vascular devices and implants, today reported Q3 2011 financial results. The Company posted sales of $14.6mm and operating income of $2.0mm. The Company also declared a cash dividend and provided Q4 2011 and full-year 2012 guidance.

Q3 2011 sales increased 7% vs. Q3 2010. Sales in the Americas grew 8%, while international sales increased 5%. By category, Vascular grew 12% while Endovascular decreased 12%. Organic sales growth was 4% in the quarter.

The Company reported a gross margin of 69.9% in Q3 2011 vs. 76.1% in Q3 2010. The decrease was largely due to costs related to the consolidation of its AlboGraft manufacturing in Burlington and a sales mix shift.

Reported Q3 2011 operating income was $2.0mm, vs. $2.0mm in Q3 2010. Adjusted operating income was $1.7mm excluding a $0.7mm gain from the Endologix termination and restructuring charges of $0.4mm. Net income in Q3 2011 was $1.2mm or $0.08 per diluted share, versus $1.5mm, or $0.09 per diluted share, in Q3 2010.

Cash and marketable securities as of September 30, 2011 were $23.1mm, an increase of $1.7mm during the quarter. This increase included the receipt of the $1.3mm distribution-termination payment, partially offset by dividend payments of $0.3mm and share repurchases of $0.7mm.

George W. LeMaitre, Chairman and CEO said, "With our five initiatives largely in the rearview mirror, we are now leaner (minus two factories), more focused (vascular niches) and more direct-to-hospital (Spain & Denmark). These changes should enable us to post faster sales growth and higher gross margins. I am also excited about the progress we are making in The UnBalloon post-approval trial and believe a launch is likely in Q4 2011 or Q1 2012."

Q3 2011 operating expenses were $8.2mm, a 2% decrease from $8.4mm in Q3 2010. Excluding a net gain from special items of $0.3mm, operating expenses in Q3 2011 were $8.5mm, up 2% from Q3 2010.

Sales and Marketing expenses increased 1% in Q3 2011 to $4.8mm. The Company ended Q3 2011 with 71 sales representatives, up from 64 at the end of Q3 2010. Excluding the effects of the stronger Euro, sales & marketing expenses fell 2% year-over-year.

General and Administrative expenses increased 11% in Q3 2011 to $2.8mm, due to additional country managers in France and Spain, LifeSpan and Spain-direct amortization, and the comparatively stronger Euro.

Research and Development expenses decreased 14% to $1.0mm in Q3 2011 driven by the exit from stent graft clinical trials and lower product development expenses. In Q3 2011, the Company received its U.S. 510(k) for The UnBalloon and the Over-the-Wire LeMaitre Valvulotome. The UnBalloon previously received its CE Mark in Q2 2011.

Quarterly Dividend

The Company's Board of Directors approved the payment of a quarterly cash dividend on the Company's common stock of $0.02 per share, with payment to be made on December 6, 2011 to shareholders of record at the close of business on November 23, 2011. Future declarations of quarterly dividends and the establishment of future record and payment dates are subject to the final determination of the Company's Board of Directors.

Business Outlook

The Company expects Q4 2011 sales of $14.2mm (+9% organic versus Q4 2010), and reported operating income of $1.2mm. The Company also expects 2012 full-year sales of $59.0mm (+8% organic vs. 2011), and reported operating income of $6.0mm (+50% vs. 2011).

The Company's Q4 2011 and full-year 2012 guidance includes the effects of its exit from stent grafts. These devices accounted for $6.8mm of sales in 2010 and $4.0mm of sales ($2.1mm of gross profit) in 2011. The Company does not expect to record stent-graft sales in Q4 2011 and full-year 2012.

Except as otherwise stated, all guidance amounts exclude the effects of future acquisitions, foreign exchange rate changes, distributor terminations and factory consolidations.

Conference Call Reminder

Management will conduct a conference call at 5:00 p.m. EDT 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 866-804-6929 (+1-857-350-1675 for international callers), using pass-code 68818191. For individuals unable to join the live conference call, a replay will be available on the Company's website.

About LeMaitre Vascular

LeMaitre Vascular is a provider of devices for the treatment of peripheral vascular disease, a condition that affects more than 20 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.

Well-known to vascular surgeons, the Company's diversified product portfolio consists of brand name devices used in arteries and veins outside of the heart, including the Expandable LeMaitre Valvulotome and the Pruitt F3 Carotid Shunt.

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.

The LeMaitre Vascular, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=10015

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. These non-GAAP measures result from facts and circumstances that vary in frequency and/or impact on continuing operations. Investors should consider these non-GAAP measures 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 financial measures, adjusted operating income and operating expenses, which exclude the gain related to the termination of the Endologix distribution relationship and restructuring charges, which consisted of European severance payments and the consolidation of our Lifespan manufacturing facility in Burlington. This press release also includes selling expense after adjusting for the effect of the stronger Euro.

In addition, this press release includes sales growth after adjusting for foreign exchange, business development transactions, and other events. The Company refers to this as "organic" sales growth. The Company analyzes net sales on a constant currency basis net of acquisitions and other non-recurring events 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, product discontinuations, and other strategic transactions are episodic in nature and highly variable in sales impact, 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 both management and the Company's investors. During Q4 2010, the Company acquired its LifeSpan Vascular Graft business and discontinued its Italian OEM manufacturing operations, and in Q3 2011, the Company completed its divestiture of the TAArget and UniFit product lines and ceased distributing the Endologix Powerlink stent graft.

Forward-Looking Statements

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, statements regarding the financial and operational guidance, future sales growth, plans for commercial launch of The UnBalloon or other products, manufacturing consolidations, and the addition of direct-sales territories are forward-looking, involving risks and uncertainties. The Company's current quarterly financial results, as discussed in this release, are preliminary and unaudited, and subject to adjustment. 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 predicted. These risks and uncertainties include, but are not limited to, the risk that the Company does not generate sufficient operating scale to maintain or increase profitability; risks related to product demand and market acceptance of the Company's products; risks that the Company's products may fail to provide the desired safety and efficacy; risks related to attracting, training and retaining sales representatives and other employees; the significant competition the Company faces from other companies, technologies, and alternative medical procedures; the risk that the Company may fail to expand its product offerings through internal development or acquisition; the risk that the Company is not successful in transitioning to a direct-selling model in new territories; the risk that the Company experiences production delays or quality difficulties in the consolidation of its manufacturing operations; the general uncertainty related to seeking regulatory approvals for the Company's products; adverse conditions in the general domestic and global economic markets 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, all of which are 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.

Financial Statements


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



                                September    December
                                30, 2011     31, 2010
                               -----------  ---------
                               (unaudited)
  Assets

  Current assets:
   Cash and cash equivalents      $ 23,087   $ 22,614
   Accounts receivable, net          8,853      8,475
   Inventories                       7,250      8,375

   Other current assets              3,702      3,447
                               -----------  ---------
  Total current assets              42,892     42,911

  Property and equipment, net        4,394      3,806
  Goodwill                          11,917     11,917
  Other intangibles, net             3,243      3,686
  Deferred tax assets                  136        134

  Other assets                         442        820
                               -----------  ---------


  Total assets                    $ 63,024   $ 63,274
                               ===========  =========


  Liabilities and
   stockholders' equity

  Current liabilities:
   Accounts payable                $ 1,276    $ 1,320
   Accrued expenses                  7,974      8,628
   Acquisition-related
    obligations                        552        441

   Deferred Tax Liability- ST           59         --
                               -----------  ---------
  Total current liabilities          9,861     10,389

  Deferred tax liabilities             443        443

  Other long-term liabilities           75         86
                               -----------  ---------
   Total liabilities                10,379     10,918

  Stockholders' equity
   Common stock                        163        161
   Additional paid-in capital       64,622     64,642
   Accumulated deficit             (6,786)    (8,583)
   Accumulated other
    comprehensive loss               (460)      (429)

   Less: treasury stock            (4,894)    (3,435)
                               -----------  ---------

  Total stockholders' equity        52,645     52,356
                               -----------  ---------

  Total liabilities and
   stockholders' equity           $ 63,024   $ 63,274
                               ===========  =========



  LEMAITRE VASCULAR, INC (NASDAQ: LMAT)
  CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
  (amounts in thousands, except per
   share amounts)
  (unaudited)




                               For the three months   For the nine months
                                      ended                 ended
                               --------------------  --------------------

                               September  September  September  September
                                30, 2011   30, 2010   30, 2011   30, 2010
                               ---------  ---------  ---------  ---------

  Net sales                     $ 14,564   $ 13,656   $ 44,274   $ 41,629

  Cost of sales                    4,381      3,258     13,570     10,257
                               ---------  ---------  ---------  ---------

  Gross profit                    10,183     10,398     30,704     31,372

  Operating expenses:
   Sales and marketing             4,757      4,698     14,646     14,339
   General and administrative      2,802      2,533      8,517      7,642
   Research and development          974      1,135      3,286      4,013
   Restructuring charges             394         --      2,049         --
   Gain on termination of
    distribution agreement         (735)         --      (735)         --

   Impairment charge                  --         --         83         68
                               ---------  ---------  ---------  ---------


  Total operating expenses         8,192      8,366     27,846     26,062
                               ---------  ---------  ---------  ---------

  Income from operations           1,991      2,032      2,858      5,310

  Other income (loss):
   Interest income, net                4          8          7         20

   Other income (loss), net         (49)         25        103        (3)
                               ---------  ---------  ---------  ---------

   Total other income (loss),
    net                             (45)         33        110         17
                               ---------  ---------  ---------  ---------

  Income before income taxes       1,946      2,065      2,968      5,327


  Provision for income taxes         732        548      1,171      1,278
                               ---------  ---------  ---------  ---------


  Net income                     $ 1,214    $ 1,517    $ 1,797    $ 4,049
                               =========  =========  =========  =========

  Net income per share of
   common stock:

   Basic                          $ 0.08     $ 0.10     $ 0.12     $ 0.26
                               =========  =========  =========  =========

   Diluted                        $ 0.08     $ 0.09     $ 0.11     $ 0.25
                               =========  =========  =========  =========

  Weighted average shares
   outstanding:

   Basic                          15,491     15,622     15,476     15,638
                               =========  =========  =========  =========

   Diluted                        16,030     16,157     16,045     16,090
                               =========  =========  =========  =========


  Cash dividends declared per
   common share                   $ 0.02       $ --     $ 0.06       $ --
                               =========  =========  =========  =========



  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,    September 30,    September 30,    September 30,
                             2011             2010             2011             2010
                        ---------------  ---------------  ---------------  ---------------

                            $       %        $       %        $       %        $       %
                        ---------  ----  ---------  ----  ---------  ----  ---------  ----

  Net Sales by Product
   Category:
  --------------------
   Vascular              $ 11,208   77%    $ 9,971   73%   $ 33,404   75%   $ 29,735   72%
   Endovascular             2,372   16%      2,698   20%      7,998   18%      8,934   21%

   Other                      984    7%        987    7%      2,872    7%      2,960    7%
                        ---------  ----  ---------  ----  ---------  ----  ---------  ----

  Total Net Sales        $ 14,564  100%   $ 13,656  100%   $ 44,274  100%   $ 41,629  100%
                        =========  ====  =========  ====  =========  ====  =========  ====




  Net Sales by
   Geography
  --------------------
   Americas               $ 9,567   66%    $ 8,886   65%   $ 27,984   63%   $ 25,806   62%

   International            4,997   34%      4,770   35%     16,290   37%     15,823   38%
                        ---------  ----  ---------  ----  ---------  ----  ---------  ----

  Total Net Sales        $ 14,564  100%   $ 13,656  100%   $ 44,274  100%   $ 41,629  100%
                        =========  ====  =========  ====  =========  ====  =========  ====


  LEMAITRE VASCULAR, INC (NASDAQ: LMAT)
  IMPACT OF FOREIGN CURRENCY AND BUSINESS ACTIVITIES
  (amounts in thousands)
  (unaudited)

                                  2011                           2010                                2009
                       -------------------------  ----------------------------------  ----------------------------------

                          Q3       Q2       Q1       Q4       Q3       Q2       Q1       Q4       Q3       Q2       Q1
                       -------  -------  -------  -------  -------  -------  -------  -------  -------  -------  -------

  Total net sales       14,564   15,112   14,598   14,431   13,656   14,158   13,815   13,584   13,346   12,630   11,348
  Impact of currency
   exchange rate
   fluctuations (1)        431      669       10    (420)    (418)    (336)      314      613    (215)    (699)    (622)
  Net impact of
   acquisitions,
   distributed sales
   and discontinued
   products,
   excluding currency
   exchange rate
   fluctuations (2)       (51)      259      283       56    (105)     (65)       95      397      333      234      101
                       -------  -------  -------  -------  -------  -------  -------  -------  -------  -------  -------

  (1) Represents the impact of the change in foreign exchange rates compared to the corresponding
   quarter of the prior year based on the weighted average exchange  rate for each quarter.
  (2) Represents the impact of sales of products of acquired businesses and distributed sales of other
   manufacturers' products, net of sales related to discontinued and divested products, based on 12
   months' sales following the date of the event or transaction, for the current period only.



  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 ending September 30, 2011
     Net sales as reported                           $ 14,564
     Impact of currency exchange rate fluctuations      (431)
     Net impact of acquisitions, distributed sales
      and

     discontinued products, excluding currency             51
                                                    ---------
       Adjusted net sales                                       $ 14,184

   For the three months ending September 30, 2010

     Net Sales as reported                                      $ 13,656
                                                               ---------

     Adjusted net sales increase for the three
      months ending September 30, 2011                             $ 528         4%
                                                               =========  =========



                                                    For the three months   For the nine months
                                                           ended                 ended
                                                    --------------------  --------------------

                                                    September  September  September  September
                                                     30, 2011   30, 2010   30, 2011   30, 2010
                                                    ---------  ---------  ---------  ---------
  Reconciliation between GAAP and Non-GAAP income
   from operations:
   Income from operations as reported                 $ 1,991    $ 2,032    $ 2,858    $ 5,310
   Inventory write-off from terminated product
    line                                                   --         --        361         --
   Restructuring charges                                  394         --      2,049         --
   Gain on termination of distribution agreement        (735)         --      (735)         --

   Impairment                                              --         --         83         68
                                                    ---------  ---------  ---------  ---------


   Adjusted income from operations                    $ 1,650    $ 2,032    $ 4,616    $ 5,378
                                                    =========  =========  =========  =========



                                                    For the three months   For the nine months
                                                           ended                 ended
                                                    --------------------  --------------------

                                                    September  September  September  September
                                                     30, 2011   30, 2010   30, 2011   30, 2010
                                                    ---------  ---------  ---------  ---------
  Reconciliation between GAAP and Non-GAAP
   operating expenses:
   Operating expenses as reported                     $ 8,192    $ 8,366   $ 27,846   $ 26,062
   Restructuring charges                                (394)         --    (2,049)         --
   Gain on termination of distribution agreement          735         --        735         --

   Impairment                                              --         --       (83)       (68)
                                                    ---------  ---------  ---------  ---------


   Adjusted operating expenses                        $ 8,533    $ 8,366   $ 26,449   $ 25,994
                                                    =========  =========  =========  =========


  Reconciliation between GAAP and Non-GAAP change
   in selling expense:
   For the three months ending September 30, 2011
     Selling expense as reported                      $ 4,757

     Impact of currency exchange rate fluctuations      (175)
                                                    ---------
       Adjusted selling expense                                  $ 4,582

   For the three months ending September 30, 2010

     Selling expense as reported                                 $ 4,698
                                                               ---------

     Adjusted net selling expense decrease for the
      three months ending September 30, 2011                     $ (116)        -2%
                                                               =========  =========


  Reconciliation between GAAP and Non-GAAP sales
   growth for Quarterly Guidance:
   For the three months ending December 31, 2011
     Net sales per guidance                          $ 14,200
     Impact of currency exchange rate fluctuations         27
     Net impact of acquisitions, distributed sales
      and

     discontinued products, excluding currency          1,439
                                                    ---------
       Adjusted net sales                                       $ 15,666

   For the three months ending December 31, 2010

     Net Sales as reported                                      $ 14,431
                                                               ---------

     Adjusted net sales increase for the three
      months ending December 31, 2010                            $ 1,235         9%
                                                               =========  =========


  Reconciliation between GAAP and Non-GAAP sales
   growth for Annual Guidance:
   For the year ending December 31, 2012
     Net sales per guidance                          $ 59,000
     Impact of currency exchange rate fluctuations        311
     Net impact of acquisitions, distributed sales
      and

     discontinued products, excluding currency          3,959
                                                    ---------
       Adjusted net sales                                       $ 63,270

   For the year ending December 31, 2011

     Net sales per guidance                                     $ 58,475
                                                               ---------

     Adjusted net sales increase for the year
      ending December 31, 2012                                   $ 4,795         8%
                                                               =========  =========


This news release was distributed by GlobeNewswire, www.globenewswire.com

SOURCE: LeMaitre Vascular, Inc.

CONTACT: J.J. Pellegrino
Chief Financial Officer
LeMaitre Vascular Inc.
781- 425-1691
jpellegrino@lemaitre.com