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): 5/16/2011
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 incorporation) |
(IRS Employer 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)
Not applicable
(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 2.05. Costs Associated with Exit or Disposal Activities
On May 16, 2011, the board of directors of LeMaitre Vascular, Inc. (the “Company”) adopted a reorganization plan (the “Plan”) that is designed to eliminate redundant costs resulting from its November 2010 acquisition of the LifeSpan Vascular Graft, to improve efficiencies in manufacturing operations, and to improve the productivity of its sales and marketing organization by discontinuing the manufacture and sale of certain non-strategic products.
The Company intends to transition the production of its LifeSpan Vascular Graft to the Company’s existing corporate headquarters in Burlington, Massachusetts and terminate or relocate all of its employees at the Company’s Laguna Hills facility. The Company expects production in Laguna Hills will be discontinued in the second or third quarter of 2011 and that the transfer of production activities from Laguna Hills to Burlington will occur over the course of the second half of 2011 and the first quarter of 2012. In addition, the Company intends to discontinue the manufacture and sale of its TAArget Thoracic Stent Graft and UniFit Abdominal Stent Graft products on June 30, 2011.
The Company expects to record charges of approximately $1.5 million and cash outlays of approximately $0.9 million associated with the Plan. The following table provides a summary of the Company’s estimate of material costs associated with the Plan by type of cost (in thousands):
| Type of Cost |
Total Estimated Amounts |
|||
| Excess and Obsolete Stent Graft Inventory |
$ | 850 | ||
| Impairment of Stent Graft Intangibles and Manufacturing Equipment |
250 | |||
| Laguna Hills Facility Exit Costs |
100 | |||
| Burlington Manufacturing Start-Up Costs |
175 | |||
| Other |
150 | |||
| Total |
$ | 1,525 | ||
The restructuring charge that the Company expects to incur in connection with the Plan is subject to a number of assumptions, and the Company’s actual results may materially differ. The Company may also incur other material charges not currently contemplated due to events that may occur as a result of, or associated with, the Plan.
Item 2.05 of this Current Report contains “forward-looking” statements, including but not limited to statements with respect to the expected timing for completion of the Plan; estimated restructuring charges to be incurred by the Company; anticipated benefits of the Plan; and the anticipated costs incurred by the Company in connection with the Plan. Any statements contained in this report that are not statements of historical fact may be deemed to be forward-looking statements. The Company’s actual results and the timing of events could differ materially from those anticipated in such forward-looking statements as a result of these risks and uncertainties, which include, without limitation, the risk that the costs of the Plan may be greater than anticipated; the risk that the transfer of production activities may have an adverse impact on the Company’s ability to manufacture its LifeSpan Vascular Graft in sufficient quantities at an acceptable cost and with comparable quality at its Burlington location, the Plan may be distracting to the Company’s management; the risk that the Company may not realize the anticipated benefits of the Plan, and other risks detailed from time to time in the Company’s SEC reports, including its Annual Report on Form 10-K for the year ended December 31, 2010, and other periodic filings with the Securities and Exchange Commission. The Company does not undertake any obligation to update forward-looking statements other than to the extent required by applicable law.
Item 7.01 Regulation FD Disclosure
On May 20, 2011, the Company issued a press release announcing the Plan described in Item 2.05 above and updating its financial guidance for the fiscal quarter ending June 30, 2011 and the fiscal year ending December 31, 2011. A copy of the press release is furnished as Exhibit 99.1 to this report (the “Exhibit”).
The press release is attached hereto as Exhibit 99.1 and is incorporated herein by this reference. The press release and the information in Item 7.01 of this Current Report on Form 8-K shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall they be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be 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 May 20, 2011 announcing a reorganization plan, 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: May 20, 2011 |
By: | /s/ Aaron M. Grossman | ||
| Aaron M. Grossman | ||||
| Vice President, General Counsel & 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 to Consolidate California Factory; Also Exiting TAArget/Unifit Business
BURLINGTON, MA, May 20, 2011 — LeMaitre Vascular, Inc. (NASDAQ: LMAT), a provider of peripheral vascular devices and implants, today announced a new factory consolidation and its exit from its TAArget/Unifit stent graft business.
California Factory Consolidation
On May 16, 2011, the Company’s Board approved the closure of its manufacturing facility in Laguna Hills, CA and the transfer of related production to Burlington. The Company acquired this factory in connection with its acquisition of the LifeSpan Vascular Graft in November, 2010. The closure is anticipated to occur in Q2 and Q3 2011.
This is the Company’s seventh factory consolidation since 2002. Upon completion of this consolidation, the Company will have centralized all of its production activities into a single location. The Company expects resulting income statement charges of approximately of $0.4mm spread throughout Q2 and Q3 of 2011 and cash outlays of approximately $0.9mm. The Company expects this closure to increase operating income by approximately $0.4mm per year in 2012 and beyond.
Exiting TAArget/UniFit Stent Graft Business
The Company also announced that it will discontinue the manufacture and sale of its TAArget/UniFit aortic stent grafts effective as of June 30, 2011. The Company expects approximately $1.1 million in non-cash charges in Q2 2011, mostly in the gross margin line due to TAArget/UniFit inventory write-offs. The Company will continue its European distribution of the Endologix stent graft.
George W. LeMaitre, Chairman & CEO said, “These two moves will continue the improvements we have been executing upon since Q4 2010. Another factory closure should save us $400,000/year and consolidate all manufacturing under one roof at our Burlington, Massachusetts headquarters. The TAArget/UniFit exit removes a declining product from our sales bag to allow greater focus on our faster-growing vascular products.”
Business Outlook
As a result of these restructuring initiatives, the Company reduced its Q2 2011 sales guidance to $15.3mm. The Company also reduced its Q2 2011 reported operating income guidance to break-even, which includes $1.1million of restructuring charges (TAArget/Unifit discontinuation, California factory closure and Spain/Denmark distributor buy-outs), as well as $0.9 million in TAArget/Unifit inventory write-offs in the gross margin line.
The Company has also revised its 2011 sales guidance to $61.0 million, and its 2011 reported operating income guidance to $5.0 million.
About LeMaitre Vascular
LeMaitre Vascular is a provider of devices for the treatment of peripheral vascular disease. The Company develops, manufactures and markets 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 the Company believes affects at least 20 million people worldwide.
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 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.
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 and operational guidance, the projected closure date of its Laguna Hills, California manufacturing operations, the projected costs of such closure, the projected financial benefits of the relocation of graft production to the Company’s Burlington, Massachusetts headquarters, and the projected operational benefits of discontinuing the Company’s TAArget and UniFit stent graft products are forward-looking, involving risks and uncertainties. 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’s restructuring costs may be greater than anticipated; the risk that the transfer of production activities may have an adverse impact on the Company’s ability to manufacture its LifeSpan Vascular Graft in sufficient quantities at an acceptable cost and with comparable quality at its Burlington location, the risk that the Company’s restructuring activities may be distracting to the Company’s management; the risk that the Company may not realize the anticipated benefits of its restructuring activities; 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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