LMAT LeMaitre Vascular Inc

LeMaitre (Nasdaq:LMAT), a provider of vascular devices, implants and services, today reported Q2 2023 results, announced a $0.14/share quarterly dividend and provided guidance.

Q2 2023 Financial Results

• Sales $50.1mm, +19% (+16% organic) vs. Q2 2022
• Op. income $9.5mm, +63% (+8% adjusted)
• Op. margin 19%
• Net income $8.1mm, +130% (+27% adjusted)
• Earnings per diluted share $0.36, +127% (+25% adjusted)
• Cash up $9.2mm to $90.2mm

Bovine patches (+16%), valvulotomes (+18%), bovine grafts (+13%), carotid shunts (+22%) and allografts (+18%) drove Q2 sales. EMEA was up 26%, APAC 21% and the Americas 16%.

The gross margin decreased to 64.0% in Q2 (vs. 66.0% in Q2 2022), driven by manufacturing inefficiencies and distribution sales of porcine patches, partially offset by price increases.

Operating income of $9.5mm was up 63% vs. Q2 2022. Excluding St. Etienne factory closure charges, operating income was up 8%. Operating expenses (excluding St. Etienne charges) grew 19% due to sales rep growth and higher commissions, as well as CE-related regulatory costs.

George LeMaitre, Chairman and CEO, said “16% organic sales growth and 25% adjusted EPS growth was a result of increased hospital procedures and our 9% price increase. In retrospect, our 2022 hiring surge seems well-timed.”

Business Outlook

	Q3 2023 Guidance	Q4 2023 Guidance	Full Year 2023 Guidance
Sales	$46.5mm - $48.9mm(Mid: $47.7mm, +22%,+16% Org.)	$49.3mm - $51.7mm(Mid: $50.5mm, +23%,+17% Org.)	$193.0mm - $197.8mm(Mid: $195.4mm, +21%,+18% Org.)
Gross Margin	64.3%	64.6%	64.6%
Op. Inc.	$7.4mm - $8.9mm(Mid: $8.2mm, +33%)	$8.7mm - $10.2mm(Mid: $9.4mm, +36%)	$33.4mm - $36.5mm(Mid $34.9mm, +30%)
Op. Inc. Ex-Special*	-	-	$33.9mm - $37.0mm(Mid $35.4mm, +18%)
EPS	$0.28 - $0.33(Mid: $0.31, +24%)	$0.32 - $0.38(Mid: $0.35, +39%)	$1.23 - $1.34(Mid: $1.28, +38%)
EPS Ex-Special*	-	-	$1.25 - $1.35(Mid: $1.30, +22%)

*Special charges are related to the St. Etienne factory closure.

Quarterly Dividend

On July 25, 2023, the Company's Board of Directors approved a quarterly dividend of $0.14/share of common stock. The dividend will be paid on August 31, 2023 to shareholders of record on August 17, 2023.

Share Repurchase Program

On February 21, 2023, the Company's Board of Directors authorized the repurchase of up to $25.0mm of the Company’s common stock. The repurchase program may be suspended or discontinued at any time and will conclude on February 21, 2024, unless extended by the Board.

Conference Call Reminder

Management will conduct a conference call at 5:00pm ET today. The conference call will be broadcast live over the Internet. Individuals interested in listening to the webcast can log on to the Company's website at www.lemaitre.com/investor. Access to the live call is available by registering online here. All registrants will receive dial-in information and a PIN allowing them to access the live call. The audio webcast can also be accessed live or via replay through a webcast at www.lemaitre.com/investor. 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

LeMaitre 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 is a registered trademark of LeMaitre Vascular, Inc. This press release may include other trademarks and trade names of the Company.

For more information about the Company, please visit www.lemaitre.com.

Use of Non-GAAP Financial Measures

LeMaitre management believes that in order to better understand the Company's short- 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/or other events, including EBITDA. This press release also provides guidance for operating income and EPS excluding the special charge relating to the closure of our St. Etienne factory and revenue related the Aziyo distribution agreement. 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 the aforementioned non-GAAP profitability measures 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, factory closures, 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 the presentation of guidance described above for operating income and EPS provides an alternative and meaningful view of the Company’s profitability.

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. 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 status of our global regulatory approvals and compliance with regulatory requirements to market and sell our products both in the U.S. and outside of the U.S.; the risk of significant fluctuations in our quarterly and annual results due to numerous factors; 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; 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; risks related to the integration of acquisition targets; the acceleration or deceleration of product growth rates; risks related to 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 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.

CONTACT: J.J. Pellegrino, CFO, LeMaitre781-425-1691jjpellegrino@lemaitre.com

LEMAITRE VASCULAR, INC. (NASDAQ: LMAT)
CONDENSED CONSOLIDATED BALANCE SHEETS
(amounts in thousands)
			June 30, 2023				December 31, 2022
			(unaudited)
Assets
Current assets:
	Cash and cash equivalents		$	19,488			$	19,134
	Short-term marketable securities			70,689				63,557
	Accounts receivable, net			26,406				22,040
	Inventory and other deferred costs			53,831				50,271
	Prepaid expenses and other current assets			4,076				6,731
Total current assets				174,490				161,733
Property and equipment, net				21,217				17,901
Right-of-use leased assets				15,804				15,634
Goodwill				65,945				65,945
Other intangibles, net				43,999				46,527
Deferred tax assets				2,081				1,745
Other assets				2,931				991
Total assets			$	326,467			$	310,476
Liabilities and stockholders' equity
Current liabilities:
	Accounts payable		$	3,519			$	2,903
	Accrued expenses			19,327				19,967
	Acquisition-related obligations			651				573
	Lease liabilities - short-term			2,358				1,886
Total current liabilities				25,855				25,329
Lease liabilities - long-term				14,449				14,710
Deferred tax liabilities				72				69
Other long-term liabilities				2,264				2,167
Total liabilities				42,640				42,275
Stockholders' equity
	Common stock			239				237
	Additional paid-in capital			196,941				189,268
	Retained earnings			105,696				97,773
	Accumulated other comprehensive loss			(5,822	)			(6,031	)
	Treasury stock			(13,227	)			(13,046	)
Total stockholders' equity				283,827				268,201
Total liabilities and stockholders' equity			$	326,467			$	310,476

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 six months ended
		June 30, 2023			June 30, 2022				June 30, 2023				June 30, 2022
Net sales		$	50,115		$	42,108			$	97,190			$	81,669
Cost of sales			18,029			14,298				34,221				27,897
Gross profit			32,086			27,810				62,969				53,772
Operating expenses:
Sales and marketing			10,216			8,242				21,113				16,092
General and administrative			7,722			7,331				15,654				14,583
Research and development			4,516			3,346				8,391				6,278
Restructuring			180			3,107				485				3,107
Total operating expenses			22,634			22,026				45,643				40,060
Income from operations			9,452			5,784				17,326				13,712
Other income (expense):
Interest income			682			167				1,250				275
Foreign currency gain (loss)			185			(403	)			(240	)			(443	)
Income before income taxes			10,319			5,548				18,336				13,544
Provision for income taxes			2,221			2,033				4,198				3,991
Net income		$	8,098		$	3,515			$	14,138			$	9,553
Earnings per share of common stock
Basic		$	0.36		$	0.16			$	0.64			$	0.44
Diluted		$	0.36		$	0.16			$	0.63			$	0.43
Weighted - average shares outstanding:
Basic			22,213			21,958				22,162				21,947
Diluted			22,451			22,129				22,371				22,115
Cash dividends declared per common share		$	0.140		$	0.125			$	0.280			$	0.250

LEMAITRE VASCULAR, INC. (NASDAQ: LMAT)
SELECTED NET SALES INFORMATION
(amounts in thousands)
(unaudited)
		For the three months ended										For the six months ended
		June 30, 2023					June 30, 2022					June 30, 2023					June 30, 2022
		$			%		$			%		$			%		$			%
Net Sales by Geography
	Americas	$	33,507		67%		$	28,854		69%		$	65,633		67%		$	55,397		68%
	Europe, Middle East and Africa		13,580		27%			10,749		25%			25,857		27%			21,243		26%
	Asia Pacific		3,028		6%			2,505		6%			5,700		6%			5,029		6%
Total Net Sales		$	50,115		100%		$	42,108		100%		$	97,190		100%		$	81,669		100%

LEMAITRE VASCULAR, INC (NASDAQ: LMAT)
NON-GAAP FINANCIAL MEASURES
(amounts in thousands)
(unaudited)
			For the three months ended								For the six months ended
			June 30, 2023				June 30, 2022				June 30, 2023				June 30, 2022
Reconciliation between GAAP and Non-GAAP EBITDA
	Net income as reported		$	8,098			$	3,515			$	14,138			$	9,553
	Interest (income) expense, net			(682	)			(167	)			(1,250	)			(275	)
	Amortization and depreciation expense			2,326				2,444				4,677				4,817
	Provision for income taxes			2,221				2,033				4,198				3,991
	EBITDA		$	11,963			$	7,825			$	21,763			$	18,086
	EBITDA percentage increase							53	%							20	%

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 June 30, 2023
		Net sales as reported		$	50,115
		Net distribution sales			(1,233	)
		Impact of currency exchange rate fluctuations			12
		Adjusted net sales						$	48,894
	For the three months ended June 30, 2022
		Net sales as reported		$	42,108
		Adjusted net sales						$	42,108
		Adjusted net sales increase for the three months ended June 30, 2023						$	6,786		16%
Reconciliation between GAAP and Non-GAAP operating income growth:
	For the three months ended June 30, 2023
		Operating income as reported		$	9,452
		Impact of special charge			180
		Adjusted operating income						$	9,632
	For the three months ended June 30, 2022
		Operating income as reported		$	5,784
		Impact of special charge			3,107
		Adjusted operating income						$	8,891
		Adjusted operating income increase for the three months ended June 30, 2023						$	741		8%
Reconciliation between GAAP and Non-GAAP net income growth:
	For the three months ended June 30, 2023
		Net income as reported		$	8,098
		Impact of special charge, including tax			134
		Adjusted net income						$	8,232
	For the three months ended June 30, 2022
		Net income as reported		$	3,515
		Impact of special charge, including tax			2,986
		Adjusted net income						$	6,501
		Adjusted net income increase for the three months ended June 30, 2023						$	1,731		27%
Reconciliation between GAAP and Non-GAAP EPS growth:
	For the three months ended June 30, 2023
		EPS as reported		$	0.36
		Impact of special charge, including tax			0.01
		Adjusted EPS						$	0.37
	For the three months ended June 30, 2022
		EPS as reported		$	0.16
		Impact of special charge, including tax			0.13
		Adjusted EPS						$	0.29
		Adjusted EPS increase for the three months ended June 30, 2023						$	0.08		25%
Reconciliation between GAAP and Non-GAAP operating expense growth:
	For the three months ended June 30, 2023
		Operating expenses as reported		$	22,634
		Impact of special charge			(180	)
		Adjusted operating expenses						$	22,454
	For the three months ended June 30, 2022
		Operating expenses as reported		$	22,026
		Impact of special charge			(3,107	)
		Adjusted operating expenses						$	18,919
		Adjusted operating expense increase for the three months ended June 30, 2023						$	3,535		19%
Reconciliation between GAAP and Non-GAAP projected sales growth:
	For the three months ending September 30, 2023
		Net sales per guidance (midpoint)		$	47,707
		Net distribution sales			(1,667	)
		Impact of currency exchange rate fluctuations			(866	)
		Adjusted projected net sales						$	45,174
	For the three months ended September 30, 2022
		Net sales as reported		$	39,028
		Adjusted net sales						$	39,028
		Adjusted projected net sales increase for the three months ending September 30, 2023						$	6,146		16%
Reconciliation between GAAP and Non-GAAP projected sales growth:
	For the three months ending December 31, 2023
		Net sales per guidance (midpoint)		$	50,500
		Net distribution sales			(1,600	)
		Impact of currency exchange rate fluctuations			(1,020	)
		Adjusted projected net sales						$	47,880
	For the three months ended December 31, 2022
		Net sales as reported		$	40,954
		Adjusted net sales						$	40,954
		Adjusted projected net sales increase for the three months ending December 31, 2023						$	6,926		17%
Reconciliation between GAAP and Non-GAAP projected sales growth:
	For the year ending December 31, 2023
		Net sales per guidance (midpoint)		$	195,397
		Net distribution sales			(4,500	)
		Impact of currency exchange rate fluctuations			(824	)
		Adjusted projected net sales						$	190,073
	For the year ended December 31, 2022
		Net sales as reported		$	161,651
		Adjusted net sales						$	161,651
		Adjusted projected net sales increase for the year ending December 31, 2023						$	28,422		18%
Reconciliation between GAAP and Non-GAAP projected operating income:
	For the year ending December 31, 2023
		Operating income per guidance (midpoint)		$	34,917
		Impact of special charge			485
		Adjusted projected operating income						$	35,402
	For the year ended December 31, 2022
		Operating income as reported		$	26,829
		Impact of special charge			3,107
		Adjusted operating income						$	29,936
		Adjusted projected operating income increase for the year ending December 31, 2023						$	5,466		18%
Reconciliation between GAAP and Non-GAAP projected EPS:
	For the year ending December 31, 2023
		EPS per guidance (midpoint)		$	1.28
		Impact of special charge, including tax			0.02
		Adjusted EPS						$	1.30
	For the year ended December 31, 2022
		EPS as reported		$	0.93
		Impact of special charge, including tax			0.13
		Adjusted EPS						$	1.06
		Adjusted projected EPS increase for the year ending December 31, 2023						$	0.24		22%