LeMaitre Q3 2023 Financial Results

Rhea-AI Summary

LeMaitre (Nasdaq:LMAT) reported Q3 2023 results with sales of $47.4mm, a 21% increase from Q3 2022. Gross margin increased to 65.0%. Operating income grew by 49% to $9.2mm. Net income was $7.5mm, a 38% increase. The company announced a $0.14/share quarterly dividend. Q4 2023 guidance projects sales of $48.0mm - $50.0mm and operating income of $9.4mm - $10.7mm.

Positive

• Q3 2023 sales increased by 21% to $47.4mm compared to Q3 2022.
• Gross margin improved to 65.0% in Q3.
• Operating income grew by 49% to $9.2mm in Q3.
• Net income increased by 38% to $7.5mm in Q3.
• The company announced a $0.14/share quarterly dividend.
• Q4 2023 guidance projects sales of $48.0mm - $50.0mm and operating income of $9.4mm - $10.7mm.

Negative

• None.

BURLINGTON, Mass., Nov. 01, 2023 (GLOBE NEWSWIRE) -- LeMaitre (Nasdaq:LMAT), a provider of vascular devices, implants and services, today reported Q3 2023 results, announced a $0.14/share quarterly dividend and provided guidance.

Q3 2023 Financial Results

• Sales $47.4mm, +21% (+16% organic) vs. Q3 2022
• Gross margin 65.0%, +80 bps
• Op. income $9.2mm, +49%
• Op. margin 19%
• Net income $7.5mm, +38%
• Earnings per diluted share $0.33, +36%
• Cash up $6.8mm to $97.0mm

Bovine patches (+22%), valvulotomes (+27%), bovine grafts (+15%) and carotid shunts (+24%) drove Q3 sales. APAC sales increased 30%, EMEA 24% and the Americas 20%.

The gross margin increased to 65.0% in Q3 (vs. 64.2% in Q3 2022) driven largely by price increases.

Operating income of $9.2mm was up 49% vs. Q3 2022. Operating expenses grew 14% year-over-year due to sales rep growth (118 to 136) and higher commissions, as well as CE-related regulatory costs.

George LeMaitre, Chairman and CEO, said “21% sales growth in Q3 and 49% op. income growth resulted from price increases, restrained op. expenses and a return-to-hospital by patients and staff. Our profitability and $97.0mm cash-on-hand provide safety and strategic optionality.”

Business Outlook

	Q4 2023 Guidance	Full Year 2023 Guidance
Sales	$48.0mm - $50.0mm (Mid: $49.0mm, +20%, +16% Org.)	$192.6mm - $194.6mm (Mid: $193.6mm, +20%, +17% Org.)
Gross Margin	65.0%	64.9%
Op. Inc.	$9.4mm - $10.7mm (Mid: $10.0mm, +44%)	$35.9mm - $37.2mm (Mid $36.5mm, +36%)
Op. Inc. Ex-Special*	-	$36.4mm - $37.7mm (Mid $37.0mm, +24%)
EPS	$0.34 - $0.38 (Mid: $0.36, +43%)	$1.30 - $1.35 (Mid: $1.33, +42%)
EPS Ex-Special*	-	$1.32 - $1.36 (Mid: $1.34, +26%)

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

Quarterly Dividend

On October 24, 2023, the Company's Board of Directors approved a quarterly dividend of $0.14/share of common stock. The dividend will be paid on November 30, 2023 to shareholders of record on November 16, 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.

LEMAITRE VASCULAR, INC. (NASDAQ: LMAT)
CONDENSED CONSOLIDATED BALANCE SHEETS
(amounts in thousands)
			September 30, 2023				December 31, 2022
			(unaudited)
Assets
Current assets:
	Cash and cash equivalents		$	18,051			$	19,134
	Short-term marketable securities			78,967				63,557
	Accounts receivable, net			23,882				22,040
	Inventory and other deferred costs			56,187				50,271
	Prepaid expenses and other current assets			5,097				6,731
Total current assets				182,184				161,733
Property and equipment, net				21,357				17,901
Right-of-use leased assets				15,850				15,634
Goodwill				65,945				65,945
Other intangibles, net				43,199				46,527
Deferred tax assets				2,325				1,745
Other assets				3,152				991
Total assets			$	334,012			$	310,476
Liabilities and stockholders' equity
Current liabilities:
	Accounts payable		$	4,371			$	2,903
	Accrued expenses			21,788				19,967
	Acquisition-related obligations			121				573
	Lease liabilities - short-term			2,749				1,886
Total current liabilities				29,029				25,329
Lease liabilities - long-term				14,132				14,710
Deferred tax liabilities				69				69
Other long-term liabilities				2,145				2,167
Total liabilities				45,375				42,275
Stockholders' equity
	Common stock			239				237
	Additional paid-in capital			198,254				189,268
	Retained earnings			110,081				97,773
	Accumulated other comprehensive loss			(6,705	)			(6,031	)
	Treasury stock			(13,232	)			(13,046	)
Total stockholders' equity				288,637				268,201
Total liabilities and stockholders' equity			$	334,012			$	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 nine months ended
		September 30, 2023				September 30, 2022				September 30, 2023				September 30, 2022
Net sales		$	47,411			$	39,028			$	144,601			$	120,697
Cost of sales			16,596				13,958				50,817				41,855
Gross profit			30,815				25,070				93,784				78,842
Operating expenses:
Sales and marketing			9,673				8,229				30,786				24,321
General and administrative			7,738				7,229				23,392				21,812
Research and development			4,224				3,462				12,615				9,740
Restructuring			-				-				485				3,107
Total operating expenses			21,635				18,920				67,278				58,980
Income from operations			9,180				6,150				26,506				19,862
Other income (expense):
Interest income			835				264				2,085				539
Foreign currency gain (loss)			(189	)			(266	)			(429	)			(709	)
Income before income taxes			9,826				6,148				28,162				19,692
Provision for income taxes			2,324				692				6,522				4,683
Net income		$	7,502			$	5,456			$	21,640			$	15,009
Earnings per share of common stock
Basic		$	0.34			$	0.25			$	0.97			$	0.68
Diluted		$	0.33			$	0.25			$	0.97			$	0.68
Weighted - average shares outstanding:
Basic			22,263				21,984				22,196				21,959
Diluted			22,481				22,217				22,411				22,149
Cash dividends declared per common share		$	0.140			$	0.125			$	0.420			$	0.375

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, 2023						September 30, 2022						September 30, 2023						September 30, 2022
		$			%			$			%			$			%			$			%
Net Sales by Geography
	Americas	$	31,863		67	%		$	26,627		68	%		$	97,496		67	%		$	82,024		68	%
	Europe, Middle East and Africa		12,322		26	%			9,922		25	%			38,179		26	%			31,165		26	%
	Asia Pacific		3,226		7	%			2,479		7	%			8,926		7	%			7,508		6	%
Total Net Sales		$	47,411		100	%		$	39,028		100	%		$	144,601		100	%		$	120,697		100	%

LEMAITRE VASCULAR, INC (NASDAQ: LMAT)
NON-GAAP FINANCIAL MEASURES
(amounts in thousands)
(unaudited)
				For the three months ended								For the nine months ended
				September 30, 2023				September 30, 2022				September 30, 2023				September 30, 2022
Reconciliation between GAAP and Non-GAAP EBITDA
	Net income as reported			$	7,502			$	5,456			$	21,640			$	15,009
	Interest (income) expense, net				(835	)			(264	)			(2,085	)			(539	)
	Amortization and depreciation expense				2,395				2,328				7,072				7,145
	Provision for income taxes				2,324				692				6,522				4,683
	EBITDA			$	11,386			$	8,212			$	33,149			$	26,298
	EBITDA percentage increase								39	%							26	%

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 September 30, 2023
		Net sales as reported		$	47,411
		Net distribution sales			(1,341	)
		Impact of currency exchange rate fluctuations			(728	)
		Adjusted net sales						$	45,342
	For the three months ended September 30, 2022
		Net sales as reported		$	39,028
		Adjusted net sales						$	39,028
		Adjusted net sales increase for the three months ended September 30, 2023						$	6,314		16	%
Reconciliation between GAAP and Non-GAAP projected sales growth:
	For the three months ending December 31, 2023
		Net sales per guidance (midpoint)		$	49,000
		Net distribution sales			(1,341	)
		Impact of currency exchange rate fluctuations			(333	)
		Adjusted projected net sales						$	47,326
	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						$	6,372		16	%
Reconciliation between GAAP and Non-GAAP projected sales growth:
	For the year ending December 31, 2023
		Net sales per guidance (midpoint)		$	193,601
		Net distribution sales			(3,915	)
		Impact of currency exchange rate fluctuations			3
		Adjusted projected net sales						$	189,689
	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						$	28,038		17	%
Reconciliation between GAAP and Non-GAAP projected operating income:
	For the year ending December 31, 2023
		Operating income per guidance (midpoint)		$	36,506
		Impact of special charge			485
		Adjusted projected operating income						$	36,991
	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						$	7,055		24	%
Reconciliation between GAAP and Non-GAAP projected EPS:
	For the year ending December 31, 2023
		EPS per guidance (midpoint)		$	1.33
		Impact of special charge, including tax			0.01
		Adjusted EPS						$	1.34
	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						$	0.28		26	%

FAQ

What were LeMaitre's Q3 2023 sales?

LeMaitre's Q3 2023 sales were $47.4mm.

What was the gross margin in Q3?

The gross margin in Q3 was 65.0%.

How much did operating income grow in Q3?

Operating income grew by 49% to $9.2mm in Q3.

What was the net income in Q3?

The net income in Q3 was $7.5mm.

What is the quarterly dividend announced by LeMaitre?

LeMaitre announced a $0.14/share quarterly dividend.

What is the sales guidance for Q4 2023?

The sales guidance for Q4 2023 is $48.0mm - $50.0mm.

What is the operating income guidance for Q4 2023?

The operating income guidance for Q4 2023 is $9.4mm - $10.7mm.