LeMaitre Q2 2021 Financial Results

Rhea-AI Summary

LeMaitre (Nasdaq:LMAT) reported Q2 2021 results with sales of $40.7 million, a 64% increase year-over-year. Operating income rose by 128% to $11.1 million, yielding an operating margin of 27%. Net income jumped 137% to $8.3 million, with earnings per diluted share at $0.40, a 131% increase. Despite a gross margin decline to 65.8%, driven by product mix and manufacturing inefficiencies, the company completed a $54.5 million follow-on stock offering. Q3 2021 guidance suggests sales between $38.3 million and $40.3 million.

Positive

• Sales increased by 64% year-over-year to $40.7 million.
• Operating income rose by 128% to $11.1 million.
• Net income increased by 137% to $8.3 million.
• Earnings per share reached $0.40, reflecting a 131% increase.
• Q4 2021 guidance shows expected sales growth of 7%.

Negative

• Gross margin declined to 65.8% from 68.5% in Q2 2020.
• Operational income guidance for Q3 2021 indicates a potential decline of 1%.

BURLINGTON, Mass., July 29, 2021 (GLOBE NEWSWIRE) -- LeMaitre (Nasdaq:LMAT), a provider of vascular devices, implants and services, today reported Q2 2021 results, announced an $0.11/share quarterly dividend and provided guidance.

Q2 2021 Financial Results

• Sales of $40.7mm, +64% (+35% organic) vs. Q2 2020
• Op. income of $11.1mm, +128%
• Op. margin of 27%
• Net income of $8.3mm, +137%
• Earnings of $0.40 per diluted share, +131%
• EBITDA of $13.3mm, +108%

Q2 2021 sales were driven by Artegraft ($6.7mm), valvulotomes, carotid shunts, patches and allografts. By geography, the Americas was up 83%, Europe/Middle East/Africa +36% and Asia/Pac +30%.

The gross margin decline to 65.8% (vs. 68.5% in Q2 2020) was driven by changes in product mix, manufacturing inefficiencies from 2020 personnel reductions, and inventory write-downs.

Q2 2021 op. income increased 128% to $11.1mm in Q2 2021, more than 1/3 of which was contributed by Artegraft. Op. income was also up due to restrained headcount growth.

On July 16 2021, the Company completed a $54.5mm follow-on public stock offering. $23.0mm of the net proceeds were used to repay long-term debt, with the remainder to be used for general corporate purposes.

George LeMaitre, Chairman and CEO, said, “The addition of Artegraft and restrained op. expenses increased profits 128%.”

Business Outlook

Item	Q3 2021 Guidance		Q4 2021 Guidance		FY 2021 Guidance
Sales	$38.3mm - $40.3mm (Midpoint: $39.3, +8%)		$39.3mm - $41.3mm (Midpoint: $40.3, +7%)		$154.1mm - $158.1mm (Midpoint: $156.1, +21%)
Gross Margin	66.6%		67.5%		66.6%
Op. Income	$9.3mm - $10.6mm (Midpoint: $10.0mm, -1%)		$9.3mm - $10.7mm (Midpoint: $10.0mm, +5%)		$37.7mm - $40.4mm (Midpoint: $39.0mm, +36%)
EPS	$0.30 - $0.35 (Midpoint: $0.33, -11%)		$0.33 - $0.38 (Midpoint: $0.35, +4%)		$1.30 - $1.40 (Midpoint: $1.35, +30%)

Quarterly Dividend

On July 22, 2021, the Company's Board of Directors approved a quarterly dividend of $0.11/share of common stock. The dividend will be paid on September 9, 2021 to shareholders of record on August 26, 2021.

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. The conference call may also be accessed by dialing 844-239-5284 (+1 512-961-6497 for international callers), using passcode 1899078. 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 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/or other events as well as EBITDA or earnings before interest, taxes, depreciation and amortization. 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 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, divestitures, 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. 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 foreign regulatory requirements to market and sell our products outside the United States; the duration and severity of the impact of COVID-19 on the global economy, our customers, our suppliers and our company; 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.

LEMAITRE VASCULAR, INC. (NASDAQ: LMAT)
CONDENSED CONSOLIDATED BALANCE SHEETS
(amounts in thousands)
			June 30, 2021				December 31, 2020
			(unaudited)
Assets
Current assets:
	Cash and cash equivalents		$	21,541			$	26,764
	Short-term marketable securities			215				214
	Accounts receivable, net			20,741				19,552
	Inventory and other deferred costs			44,751				45,115
	Prepaid expenses and other current assets			2,772				2,618
Total current assets				90,020				94,263
Property and equipment, net				15,794				15,036
Right-of-use leased assets				16,244				16,066
Goodwill				65,945				65,945
Other intangibles, net				55,777				58,905
Deferred tax assets				1,649				1,686
Other assets				1,076				909
Total assets			$	246,505			$	252,810
Liabilities and stockholders' equity
Current liabilities:
	Current portion of long-term debt		$	3,000			$	2,500
	Accounts payable			2,059				2,394
	Accrued expenses			13,766				17,525
	Acquisition-related obligations			701				772
	Lease liabilities - short-term			1,954				1,954
Total current liabilities				21,480				25,145
Long-term debt				19,448				35,532
Lease liabilities - long-term				15,069				14,791
Deferred tax liabilities				125				127
Other long-term liabilities				4,550				4,643
Total liabilities				60,672				80,238
Stockholders' equity
	Common stock			222				221
	Additional paid-in capital			119,291				114,924
	Retained earnings			80,253				70,554
	Accumulated other comprehensive loss			(2,243	)			(1,525	)
	Treasury stock			(11,690	)			(11,602	)
Total stockholders' equity				185,833				172,572
Total liabilities and stockholders' equity			$	246,505			$	252,810

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, 2021				June 30, 2020				June 30, 2021				June 30, 2020
Net sales		$	40,670			$	24,851			$	76,553			$	55,402
Cost of sales			13,909				7,822				25,993				17,890
Gross profit			26,761				17,029				50,560				37,512
Operating expenses:
	Sales and marketing		6,803				4,686				13,269				12,631
	General and administrative		6,200				5,332				12,744				10,523
	Research and development		2,652				2,139				5,496				5,133
Total operating expenses			15,655				12,157				31,509				28,287
Income from operations			11,106				4,872				19,051				9,225
Other income (expense), net
	Interest income		1				74				2				179
	Interest expense		(495	)			(66	)			(1,072	)			(66	)
	Foreign currency gain (loss)		(157	)			(113	)			(33	)			(291	)
Income before income taxes			10,455				4,767				17,948				9,047
Provision for income taxes			2,156				1,267				3,720				2,373
Net income		$	8,299			$	3,500			$	14,228			$	6,674
Earnings per share of common stock
	Basic	$	0.40			$	0.17			$	0.69			$	0.33
	Diluted	$	0.40			$	0.17			$	0.68			$	0.33
Weighted - average shares outstanding:
	Basic		20,611				20,180				20,579				20,174
	Diluted		20,959				20,399				20,900				20,415
Cash dividends declared per common share		$	0.110			$	0.095			$	0.220			$	0.190

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, 2021						June 30, 2020						June 30, 2021						June 30, 2020
		$			%			$			%			$			%			$			%
Net Sales by Geography
	Americas	$	27,329		67	%		$	14,942		60	%		$	51,028		67	%		$	33,278		60	%
	Europe/Middle East/Africa		10,803		27	%			7,950		32	%			20,665		27	%			18,300		33	%
	Asia/Pacific Rim		2,538		6	%			1,959		8	%			4,860		6	%			3,824		7	%
Total Net Sales		$	40,670		100	%		$	24,851		100	%		$	76,553		100	%		$	55,402		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 ended June 30, 2021
		Net sales as reported		$	40,670
		Impact of currency exchange rate fluctuations			(1,186	)
		Net impact of acquisitions excluding currency			(5,982	)
		Adjusted net sales						$	33,502
	For the three months ended June 30, 2020
		Net sales as reported		$	24,851
		Adjusted net sales						$	24,851
		Adjusted net sales increase for the three months ended June 30, 2021						$	8,651				35	%
Reconciliation between GAAP and non-GAAP debt outstanding:
	As of June 30, 2021
		Debt as reported		$	22,448
		Add back unamortized deferred financing costs			552
		Adjusted debt outstanding						$	23,000
				For the three months ended								For the six months ended
				June 30, 2021				June 30, 2020				June 30, 2021				June 30, 2020
Reconciliation between GAAP and Non-GAAP EBITDA
	Net income as reported			$	8,299			$	3,500			$	14,228			$	6,674
	Interest (income) expense, net				494				(8	)			1,070				(113	)
	Amortization and depreciation expense				2,389				1,639				4,777				3,177
	Provision for income taxes				2,156				1,267				3,720				2,373
	EBITDA			$	13,338			$	6,398			$	23,795			$	12,111
	EBITDA percentage increase								108	%							96	%

FAQ

What are LeMaitre's Q2 2021 earnings results?

LeMaitre reported Q2 2021 earnings of $0.40 per diluted share, with net income at $8.3 million.

What is the guidance for Q3 2021 for LeMaitre?

LeMaitre's Q3 2021 guidance suggests sales between $38.3 million and $40.3 million.

What dividend did LeMaitre announce?

LeMaitre announced a quarterly dividend of $0.11 per share, payable on September 9, 2021.

How did LeMaitre's gross margin change in Q2 2021?

LeMaitre's gross margin declined to 65.8% in Q2 2021, down from 68.5% a year prior.

What drove LeMaitre's sales growth in Q2 2021?

Sales growth was driven by products like Artegraft, valvulotomes, carotid shunts, and allografts.