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): 04/30/2008
LeMaitre Vascular, Inc.
(Exact name of registrant as specified in its charter)
Commission File Number: 001-33092
| Delaware | 04-2825458 | |
| (State or other jurisdiction of | (IRS Employer | |
| 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)) |
Information to be included in the report
Item 2.02. Results of Operations and Financial Condition
On April 30, 2008, LeMaitre Vascular, Inc. issued a press release regarding its financial and operational results for the first quarter ended March 31, 2008. A copy of the press release is furnished as Exhibit 99.1 to this report.
The information in this report, including the Exhibit 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 exhibit is furnished as part of this report, where indicated:
| (d) | Exhibits. |
| Exhibit No. |
Description | |
| 99.1 | Press release issued by LeMaitre Vascular, Inc. on April 30, 2008, announcing its financial and operational results for the first quarter ended March 31, 2008, furnished herewith. |
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: April 30, 2008
By: /s/ Christopher H. Martin
Christopher H. Martin
Assistant Secretary
Exhibit Index
| Exhibit No. |
Description | |
| EX-99.1 | Press Release |
Exhibit 99.1
For information contact:
J.J. Pellegrino
Chief Financial Officer
LeMaitre Vascular Inc.
781.221.2266 x106
jpellegrino@lemaitre.com
LeMaitre Vascular Reports Q1 2008 Revenue of $11.8 million, a 20% increase
BURLINGTON, MA, April 30, 2008 — LeMaitre Vascular, Inc. (Nasdaq: LMAT), a provider of peripheral vascular devices and implants, today announced financial results for Q1 2008. Q1 2008 revenues were $11.8 million, an increase of 20% over Q1 2007.
Q1 2008 revenues increased 5% in the Company’s endovascular and dialysis access category and 31% in its vascular category, while general surgery revenues decreased 4%. Strong performance from newly acquired products and core open vascular surgery devices drove revenue in the quarter, as did the weak dollar.
The Company reported a gross margin of 71.7% in Q1 2008 versus 74.6% in the year-earlier quarter. While the Company continued to drive manufacturing efficiencies at its Massachusetts plant, the Q1 margin decrease resulted from Biomateriali sales and strong international sales. Biomateriali was acquired in December and sells through an exclusive distributor. International sales, with lower selling prices, accounted for a record 46% of the Company’s Q1 revenues.
George W. LeMaitre, Chairman and CEO said, “Our revenues are diversified by both product and geography. This continued to serve us well in 2008, and I’m pleased to report 20% sales growth for the quarter. Growth was driven by strong sales from our 2007 acquisitions and from our core open vascular devices. I’m also pleased to report that our UNITE stent graft clinical trial has gathered some momentum and now has 13 operational sites and 12 enrollees.”
The Q1 2008 operating loss was $2.6 million. During the quarter the Company recorded $1.1 million of three previously disclosed special charges: the Sorin write-down, the reduction in force (“RIF”), and the Italian distributor non-compete. Excluding these items, the non-GAAP operating loss for Q1 2008 was $1.5 million. The Q1 2007 GAAP and non-GAAP operating loss was $1.0 million.
The Company reported a net loss of $2.6 million in Q1 2008, or $0.17 per diluted share, compared to a net loss of $0.6 million, or $0.04 per diluted share, for Q1 2007.
Mr. LeMaitre continued, “Partly in response to market conditions, we have recently heightened our focus on the bottom line. The February RIF reduced headcount from 257 at year-end to 218 at March 31, 2008, a level last seen in Q1, 2005. We have also recently undertaken a belt-tightening regime, the 2008 Expense Shave. Based on our continued sales momentum, coupled with these cost-cutting initiatives, I’m confident we will achieve our 2008 top- and bottom-line guidance.”
Sales and marketing expenses for Q1 2008 increased 21% to $5.8 million from $4.8 million in 2007. Excluding the effects of the weak dollar, the increase was 15%. The start-up of our French and Italian sales forces added $0.6 million of new expenses in Q1 2008.
For Q1 2008, general and administrative expenses increased 19% to $2.8 million. Excluding the effects of the weak dollar, the G&A increase was 15% and was driven by Biomateriali’s inclusion on the income statement.
R&D expenses increased $0.2 million to $1.3 million in Q1 2008. The EndoFit Thoracic Uniform TopStent launch progressed smoothly in Q1. Coupled with the recently-launched TT Introducer, this uniform TopStent is designed to substantially improve deployment accuracy.
The Company ended Q1 2008 with $17.8 million in cash and marketable securities, compared to $22.9 million at December 31, 2007. $4.0 million of this $5.1 million decrease is attributable to the following items: the termination of the Italian distributor relationship ($1.2 million), 2007 annual employee bonuses ($1.1 million), inventory and accounts receivable increases ($0.8 million), acquisition-related payments ($0.7 million), and the RIF ($0.2 million).
Business Outlook
The Company reaffirmed its 2008 guidance of $47—$48 million in net sales and a $4.3 million operating loss. The Company’s guidance does not include the impact of future acquisitions or significant distributor terminations.
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 2008. 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 866-831-6247 (1-617-213-8856 for international callers) using passcode: 22576785. For interested 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. We develop, manufacture and market disposable and implantable vascular devices to address the needs of vascular surgeons. The Company’s devices are used to treat peripheral vascular disease, a condition that we estimate affects more than 20 million people worldwide.
Well-known to vascular surgeons, the Company’s diversified product portfolio consists of brand name devices that are used in arteries and veins outside of the heart including the Expandable LeMaitre Valvulotome and the Pruitt-Inahara Carotid Shunt. Recent acquisitions include Vascular Architects, a manufacturer of remote endarterectomy devices, and Biomateriali, a manufacturer of vascular grafts.
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LeMaitre and the LeMaitre Vascular logo are registered trademarks, and Biomateriali and TT are trademarks, of LeMaitre Vascular, Inc. This press release contains trademarks and trade names of the Company and other third parties, which are the properties of their respective owners.
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 properly understand the Company’s short-term and long-term financial trends, investors may wish to consider the impact of certain non-cash or non-recurring items, when used as a supplement to financial performance measures in accordance with GAAP. These items result from facts and circumstances that vary in frequency and/or impact on continuing operations. In addition, management uses results of operations before such items to evaluate the operational performance of the Company and as a basis for strategic planning. 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 a non-GAAP measure which excludes certain non-recurring expenses related to restructuring and to impairment. During 2007, the Company elected to terminate its exclusive distributor in Italy prior to the scheduled expiration of the related distribution contract and entered into a separation agreement with this distributor. The Company incurred charges of $254,000 in connection with this transaction in Q1 2008. Also, in Q1 2008, shortly following its acquisition of Biomateriali, the Company became aware of facts leading it to conclude that certain acquired inventory and intangibles should be written down, the inventory by $105,000 in Q4 2007 and the intangibles by $435,000 in Q1 2008. In Q1 2008 the Company undertook a reduction in force of 32 employees and incurred charges of $379,000 related to severance and litigation. In Q1 2007, the Company reported $13,000 of restructuring and impairment charges related to the relocation of our stent-graft manufacturing to our corporate headquarters.
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 Company’s financial guidance for 2008, the integration and performance of its 2007 acquisitions, the cost-cutting initiatives it has undertaken, the start-up of its French and Italian sales forces, enrollment in its UNITE stent graft clinical trial, and the launch of its EndoFit Thoracic Uniform TopStent are forward-looking statements involving risks and uncertainties. The Company’s first quarter 2008 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
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potential for encountering unfavorable foreign currency exchange rate fluctuations; risks related to product demand and market acceptance of the Company’s products; the significant competition the Company faces from other companies, technologies, and alternative medical procedures; the Company’s ability to realize the anticipated benefits of its acquisitions; the Company’s ability to effectively expand its sales force; the Company’s ability to realize significant cost savings through its cost-cutting initiatives; the possibility that the Company’s new products may fail to provide the desired safety and efficacy or may not be accepted by the market for other reasons; the Company’s ability to expand its product offerings through internal development or acquisition; disruption at any of the Company’s manufacturing facilities; the general uncertainty related to seeking regulatory approvals for the Company’s products, particularly in the United States; potential claims of third parties that the Company’s products infringe their intellectual property rights; and the risks and uncertainties included under the heading “Risk Factors” in our most recent Annual Report on Form 10-K, as updated by any 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
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LEMAITRE VASCULAR, INC. (NASDAQ: LMAT)
CONDENSED CONSOLIDATED BALANCE SHEETS
(amounts in thousands)
| March 31, 2008 | December 31, 2007 | |||||||
| (unaudited) | ||||||||
| Assets |
||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ | 5,444 | $ | 6,691 | ||||
| Marketable securities |
12,358 | 16,198 | ||||||
| Accounts receivable, net |
7,166 | 7,020 | ||||||
| Inventories |
10,266 | 9,589 | ||||||
| Other current assets |
2,315 | 2,562 | ||||||
| Total current assets |
37,549 | 42,060 | ||||||
| Property and equipment, net |
2,975 | 2,891 | ||||||
| Goodwill |
10,959 | 10,942 | ||||||
| Other intangibles, net |
3,869 | 3,886 | ||||||
| Other assets |
1,433 | 1,372 | ||||||
| Total assets |
$ | 56,785 | $ | 61,151 | ||||
| Liabilities and stockholders’ equity |
||||||||
| Current liabilities: |
||||||||
| Revolving line of credit |
$ | — | $ | 262 | ||||
| Accounts payable |
2,536 | 2,565 | ||||||
| Accrued expenses |
4,413 | 6,661 | ||||||
| Acquisition-related liabilities |
1,378 | 851 | ||||||
| Total current liabilities |
8,327 | 10,339 | ||||||
| Long-term debt |
45 | 42 | ||||||
| Deferred tax liabilities |
1,212 | 996 | ||||||
| Other long-term liabilities |
514 | 1,188 | ||||||
| Total liabilities |
10,098 | 12,565 | ||||||
| Stockholders’ equity |
||||||||
| Common stock |
155 | 155 | ||||||
| Additional paid-in capital |
61,454 | 61,187 | ||||||
| Accumulated deficit |
(15,445 | ) | (12,880 | ) | ||||
| Accumulated other comprehensive income |
698 | 291 | ||||||
| Less: treasury stock |
(175 | ) | (167 | ) | ||||
| Total stockholders’ equity |
46,687 | 48,586 | ||||||
| Total liabilities and stockholders’ equity |
$ | 56,785 | $ | 61,151 | ||||
LEMAITRE VASCULAR, INC. (NASDAQ: LMAT)
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(amounts in thousands, except per share amounts)
(unaudited)
| For the three months ended | ||||||||
| March 31, 2008 | March 31, 2007 | |||||||
| Net sales |
$ | 11,847 | $ | 9,883 | ||||
| Cost of sales |
3,358 | 2,513 | ||||||
| Gross profit |
8,489 | 7,370 | ||||||
| Operating expenses: |
||||||||
| Sales and marketing |
5,829 | 4,810 | ||||||
| General and administrative |
2,828 | 2,370 | ||||||
| Research and development |
1,350 | 1,154 | ||||||
| Restructuring charges |
633 | 6 | ||||||
| Impairment charge |
435 | 7 | ||||||
| Total operating expenses |
11,075 | 8,347 | ||||||
| Loss from operations |
(2,586 | ) | (977 | ) | ||||
| Other income (expense): |
||||||||
| Interest income (expense), net |
161 | 351 | ||||||
| Other income, net |
151 | 25 | ||||||
| Total other income, net |
312 | 376 | ||||||
| Loss before income taxes |
(2,274 | ) | (601 | ) | ||||
| Provision for income taxes |
290 | 28 | ||||||
| Net loss |
$ | (2,564 | ) | $ | (629 | ) | ||
| Net loss per share of common stock: |
||||||||
| Basic |
$ | (0.17 | ) | $ | (0.04 | ) | ||
| Diluted |
$ | (0.17 | ) | $ | (0.04 | ) | ||
| Weighted average shares outstanding: |
||||||||
| Basic |
15,506 | 15,338 | ||||||
| Diluted |
15,506 | 15,338 | ||||||
LEMAITRE VASCULAR, INC. (NASDAQ: LMAT)
SELECTED NET SALES INFORMATION
(amounts in thousands)
(unaudited)
| For the three months ended | ||||||||||||
| March 31, 2008 | March 31, 2007 | |||||||||||
| $ | % | $ | % | |||||||||
| Net Sales by Product Category: |
||||||||||||
| Endovascular & Dialysis |
$ | 3,542 | 30 | % | $ | 3,373 | 34 | % | ||||
| Vascular |
7,323 | 62 | % | 5,573 | 56 | % | ||||||
| General Surgery |
904 | 7 | % | 937 | 10 | % | ||||||
| 11,769 | 99 | % | 9,883 | 100 | % | |||||||
| OEM |
78 | 1 | % | — | — | |||||||
| Total Net Sales |
$ | 11,847 | 100 | % | $ | 9,883 | 100 | % | ||||
| Net Sales by Geography |
||||||||||||
| United States and Canada |
$ | 6,454 | 54 | % | $ | 5,922 | 60 | % | ||||
| Outside the United States and Canada |
5,393 | 46 | % | 3,961 | 40 | % | ||||||
| $ | 11,847 | 100 | % | $ | 9,883 | 100 | % | |||||
LEMAITRE VASCULAR, INC. (NASDAQ: LMAT)
NON-GAAP FINANCIAL MEASURES
(amounts in thousands)
(unaudited)
| For the three months ended | ||||||||
| March 31, 2008 | March 31, 2007 | |||||||
| Reconciliation between GAAP and Non-GAAP operating loss: |
||||||||
| Operating loss as reported |
$ | (2,586 | ) | $ | (977 | ) | ||
| Restructuring charges |
633 | 6 | ||||||
| Impairment |
435 | 7 | ||||||
| Adjusted operating loss |
$ | (1,518 | ) | $ | (964 | ) | ||
LEMAITRE VASCULAR, INC. (NASDAQ: LMAT)
IMPACT OF FOREIGN CURRENCY AND BUSINESS ACTIVITIES
| (unaudited) | 2008 | 2007 | 2006 | 2005 | ||||||||||||||||||||||||||||
| (in thousands) | Mar | Dec | Sept | June | Mar | Dec | Sept | June | Mar | Dec | Sept | June | Mar | |||||||||||||||||||
| Total net sales |
11,847 | 11,104 | 10,144 | 10,315 | 9,883 | 8,757 | 8,540 | 8,760 | 8,571 | 7,877 | 7,820 | 7,529 | 7,501 | |||||||||||||||||||
| Impact of currency exchange rate fluctuations (1) |
674 | 439 | 253 | 267 | 322 | 232 | 135 | (1 | ) | (287 | ) | (266 | ) | (3 | ) | 89 | 138 | |||||||||||||||
| Net impact of acquisitions, distributed sales and discontinued products, excluding currency exchange rate fluctuations (2) |
1,133 | 1,116 | 635 | 567 | 455 | (252 | ) | (383 | ) | (107 | ) | 37 | 346 | 389 | 425 | 442 | ||||||||||||||||
| (1) | Represents the impact of the change in foreign exchange rates over 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 products and other activities, measured based on 12 months’ sales following the date of the event or transaction and shown in the current period only. |