Form 8-K

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

Form 8-K

 

 

Current Report

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 28, 2014

 

 

LeMaitre Vascular, Inc.

(Exact name of registrant as specified in its charter)

 

 

Commission File Number: 001-33092

 

Delaware   04-2825458
(State or other jurisdiction   (IRS Employer
of incorporation)   Identification No.)

63 Second Avenue

Burlington, MA 01803

(Address of principal executive offices, including zip code)

781-221-2266

(Registrant’s telephone number, including area code)

 

(Former name or former address, if changed since last report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 


Item 2.02. Results of Operations and Financial Condition.

On October 28, 2014, LeMaitre Vascular, Inc. (the “Company”) issued a press release regarding its financial and operational results for the third quarter ended September 30, 2014. A copy of the press release is furnished as Exhibit 99.1 to this Report.

The information in this Item 2.02, including Exhibit 99.1 attached hereto, is intended to be furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as expressly set forth by specific reference in such filing.

Item 9.01. Financial Statements and Exhibits.

The following exhibits are furnished or filed as part of this Report, as applicable:

(d) Exhibits.

 

Exhibit
No.

  

Description

99.1    Press release issued by LeMaitre Vascular, Inc. on October 28, 2014.


Signature(s)

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

      LeMaitre Vascular, Inc.
Date: October 28, 2014     By:   Joseph P. Pellegrino, Jr.
     

/s/ JOSEPH P. PELLEGRINO, JR.

     

Joseph P. Pellegrino, Jr.

Chief Financial Officer


Exhibit Index

 

Exhibit
No.
   Description
99.1    Press release issued by LeMaitre Vascular, Inc. on October 28, 2014.
EX-99.1

Exhibit 99.1

 

LOGO

For information contact:

J.J. Pellegrino

Chief Financial Officer

LeMaitre Vascular, Inc.

781-425-1691

jpellegrino@lemaitre.com

LeMaitre Q3 2014 Sales $17.5mm (+14%) ; Op. Income $1.9mm (+139%)

BURLINGTON, MA, October 28, 2014 — LeMaitre Vascular, Inc. (NASDAQ: LMAT) today reported Q3 2014 results, provided guidance and announced a $0.035/share dividend.

Q3 2014 sales were $17.5mm, a 14% year-over-year increase driven by valvulotomes, XenoSure and Trivex (acquired August 2013). International sales grew 18% and the Americas increased 12%. Unit sales were up 9% and organic sales growth was 12%.

Gross margin of 68.6% in Q3 2014 was down from 70.0% in Q3 2013, driven largely by unfavorable geographic and product mix.

Q3 2014 operating income grew 139% to $1.9mm from $0.8mm in Q3 2013. Net income grew to $0.9mm from $0.7mm in Q3 2013. EPS was $0.05 in both periods.

Cash and marketable securities declined by $5.1mm from $23.5mm at June 30, 2014 to $18.4mm at September 30, 2014, largely due to $7.0mm of acquisition-related payments. This decline was partially offset by cash generated from operations. EBITDA was $2.7mm in Q3 2014 versus $1.5mm in the year-earlier quarter.

George W. LeMaitre, Chairman and CEO commented, “14% sales growth and 2014 cost-cutting combined to produce an 11% op. margin in Q3. During the quarter we broadened our product portfolio by acquiring Omniflow II & an angioscope. We also launched the Hydro valvulotome worldwide. In Q3 we continued to build out our Asia/Pacific Rim operations by opening a Shanghai office. We now have eight sales offices: Burlington, Frankfurt, Tokyo, Milan, Madrid, Melbourne, Toronto and Shanghai.”


Quarterly Dividend

On October 23, 2014, the Company’s Board of Directors approved a quarterly dividend of $0.035/share of common stock. The dividend will be paid December 4, 2014 to shareholders of record on November 20, 2014.

Omniflow II Acquisition

On August 14, 2014, the Company acquired Xenotis, manufacturer of the Omniflow II biological graft for peripheral bypass and dialysis access. Total consideration for 100% of Xenotis’ shares was $6.7 million, with $5.1 million paid at the closing. The Company also assumed bank debt of $1.1 million. In its fiscal year ended June 30, 2014, Xenotis broke even on sales of $2.3 million. The Company expects Omniflow II sales of $3.0mm in 2015.

Angioscope Acquisition

On September 17, 2014 the Company acquired the angioscope product line from Applied Medical for $420,000. Last 12 months’ sales of the device were estimated to be $350,000. Angioscopes are fiber optic catheters, often used for visualization during in situ bypass with a valvulotome. The Company expects angioscope sales of $0.5mm in 2015.

Business Outlook

The Company expects Q4 2014 record sales of $18.9mm (+5% vs. Q4 2013) and record operating income of $2.1mm (+80% vs Q4 2013). This implies a Q4 2014 operating margin of 11%. The Company increased its 2014 sales guidance to $71.3mm (+10% vs. 2013) and increased its 2014 operating income guidance to $5.7mm (+26% vs. 2013). This implies a 2014 operating margin of 8%. Included in the $18.9mm Q4 2014 guidance is $0.5mm of revenues from the two recent acquisitions.

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 2014. 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 800-510-9691 (+1 617-614-3453 for international callers), using pass-code 24494455. 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 (“organic” and EBITDA) results is included in the attached tables.

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.

 

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LeMaitre, XenoSure, Trivex, Omniflow 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 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, 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.

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 2014 and 2014 sales and operating income levels as well as its expectations regarding Q4 2014 and 2015 sales of the Omniflow II product line and angioscopes. Forward-looking statements are based on management’s current, preliminary expectations and are subject

 

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to risks and uncertainties that could cause actual results to differ from the results expected, including, but not limited to, 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 product demand and market acceptance of the Company’s products; the risk that the XenoSure product is not as accretive and does not achieve the gross margins currently anticipated by the Company; the risk that the Company experiences increased expense, production delays or quality difficulties in the transition of the XenoSure manufacturing operations; the risk that the Company is not successful in transitioning to a direct-selling model in new territories; 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.

 

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Financial Statements

LEMAITRE VASCULAR, INC (NASDAQ: LMAT)

CONDENSED CONSOLIDATED BALANCE SHEETS

(amounts in thousands)

 

    September 30, 2014     December 31, 2013  
    (unaudited)        

Assets

   

Current assets:

   

Cash and cash equivalents

  $ 18,354      $ 14,711   

Accounts receivable, net

    10,590        10,590   

Inventory

    16,925        13,255   

Prepaid expenses and other current assets

    3,565        3,169   
 

 

 

   

 

 

 

Total current assets

    49,434        41,725   

Property and equipment, net

    7,196        5,810   

Goodwill

    17,441        15,031   

Other intangibles, net

    7,635        6,144   

Deferred tax assets

    1,525        1,615   

Other assets

    174        167   
 

 

 

   

 

 

 

Total assets

  $ 83,405      $ 70,492   
 

 

 

   

 

 

 

Liabilities and stockholders’ equity

   

Current liabilities:

   

Accounts payable

  $ 1,021      $ 1,235   

Accrued expenses

    8,575        7,993   

Acquisition-related obligations

    2,890        992   
 

 

 

   

 

 

 

Total current liabilities

    12,486        10,220   

Deferred tax liabilities

    3,400        3,461   

Other long-term liabilities

    400        249   
 

 

 

   

 

 

 

Total liabilities

    16,286        13,930   

Stockholders’ equity

   

Common stock

    188        170   

Additional paid-in capital

    75,480        65,354   

Retained earnings (accumulated deficit)

    1,332        (667

Accumulated other comprehensive loss

    (1,628     (253

Treasury stock

    (8,253     (8,042
 

 

 

   

 

 

 

Total stockholders’ equity

    67,119        56,562   
 

 

 

   

 

 

 

Total liabilities and stockholders’ equity

  $ 83,405      $ 70,492   
 

 

 

   

 

 

 

 

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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, 2014     September 30, 2013     September 30, 2014     September 30, 2013  

Net sales

  $ 17,501      $ 15,300      $ 52,416      $ 46,633   

Cost of sales

    5,498        4,584        16,813        13,474   
 

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

    12,003        10,716        35,603        33,159   

Operating expenses:

       

Sales and marketing

    5,091        5,205        16,857        16,278   

General and administrative

    3,765        3,282        10,376        9,231   

Research and development

    1,109        1,300        3,590        3,841   

Medical device excise tax

    178        153        518        463   

Restructuring charges

    8        —          500        —     

Impairment Charges

    —          —          161        —     
 

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

    10,151        9,940        32,002        29,813   
 

 

 

   

 

 

   

 

 

   

 

 

 

Income from operations

    1,852        776        3,601        3,346   

Other income (loss):

       

Interest income (expense), net

    (5     (5     (4     (14

Other income (loss), net

    52        14        30        (102
 

 

 

   

 

 

   

 

 

   

 

 

 

Income before income taxes

    1,899        785        3,627        3,230   

Provision for income taxes

    965        64        1,628        774   
 

 

 

   

 

 

   

 

 

   

 

 

 

Net income

  $ 934      $ 721      $ 1,999      $ 2,456   
 

 

 

   

 

 

   

 

 

   

 

 

 

Earnings per share of common stock

       

Basic

  $ 0.05      $ 0.05      $ 0.12      $ 0.16   
 

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

  $ 0.05      $ 0.05      $ 0.12      $ 0.16   
 

 

 

   

 

 

   

 

 

   

 

 

 

Weighted - average shares outstanding:

       

Basic

    17,348        15,339        16,358        15,262   
 

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

    17,709        15,780        16,772        15,707   
 

 

 

   

 

 

   

 

 

   

 

 

 

Cash dividends declared per common share

  $ 0.035      $ 0.030      $ 0.105      $ 0.090   
 

 

 

   

 

 

   

 

 

   

 

 

 

 

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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, 2014     September 30, 2013     September 30, 2014     September 30, 2013  
    $     %     $     %     $     %     $     %  

Net Sales by Geography

               

Americas

  $ 11,102        63   $ 9,889        65   $ 32,566        62   $ 30,135        65

International

    6,399        37     5,411        35     19,850        38     16,498        35
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Net Sales

  $ 17,501        100   $ 15,300        100   $ 52,416        100   $ 46,633        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 ending September 30, 2014

       

Net sales as reported

   $ 17,501        

Impact of currency exchange rate fluctuations

     47        

Net impact of acquisitions and distributed sales excluding currency

     (462     
  

 

 

      

Adjusted net sales

     $ 17,086      

For the three months ending September 30, 2013

       

Net sales as reported

     $ 15,300      
    

 

 

    

Adjusted net sales increase for the three months ending September 30, 2014

     $ 1,786         12
    

 

 

    

 

 

 

 

    For the three months ended     For the nine months ended  
    September 30, 2014     September 30, 2013     September 30, 2014     September 30, 2013  

Reconciliation between GAAP and Non-GAAP EBITDA

       

Net Income, as reported

  $ 934      $ 721      $ 1,999      $ 2,456   

Amortization and depreciation expense

    802        723        2,422        1,974   

Interest income (expense), net

    (5     (5     (4     (14

Provision for income taxes

    965        64        1,628        774   
 

 

 

   

 

 

   

 

 

   

 

 

 

EBITDA

  $ 2,696      $ 1,503      $ 6,045      $ 5,190   
 

 

 

   

 

 

   

 

 

   

 

 

 

 

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