LeMaitre Vascular Announces Q4 2019 Financial Results

BURLINGTON, Mass., Feb. 06, 2020 (GLOBE NEWSWIRE) -- LeMaitre Vascular, Inc. (Nasdaq:LMAT), a provider of vascular devices, implants and services, today reported Q4 2019 results, provided guidance, and announced a $0.095/share dividend.

Q4 2019 Results

• Record sales of $30.2mm, +6% (flat organic) vs. Q4 2018
• Operating income of $4.9mm, -31% (-12% excluding special items)
• Net income of $4.6mm, -23% (+4% excluding special items)
• Earnings of $0.23 per diluted share, -25% (+3% excluding special items)

The Company posted record sales in the Americas (+6%), while Europe/Middle East/Africa (+4%) and Asia/Pac (+20%) also contributed. Sales growth was led by biologic patches, embolectomy catheters and valvulotomes. 

Gross margin decreased to 66.0% in Q4 2019 (vs. 67.7% in Q4 2018) primarily due to sales mix, lower margin revenues from the two 2019 acquisitions and the strong US dollar.

Operating expenses in Q4 2019 were $15.0mm (+10% vs. Q4 2018 excluding special items) driven by acquisition-related expenses and sales compensation. The Q4 2018 special item related to a $1.6mm gain from the Cardial acquisition.

Chairman and CEO George LeMaitre said, “For the full year 2019, sales were up 11% (6% organic) and adjusted op. income was up 3%. Looking ahead to 2020, we’re guiding 10% sales growth and 17% op. income growth. This bottom line bounce is due to restrained 2020 op. expense growth of 6% and 10% sales growth.”

Business Outlook

 

		Guidance
	Q1 2020 Sales	$30.5mm - $31.7mm (Midpoint: +9%)
	Q1 2020 Gross Margin	66.3%
	Q1 2020 Op. Income	$3.8mm - $4.6mm (Midpoint: -6%)
	Q1 2020 EPS	$0.14 - $0.17 (Midpoint: -10%)
	2020 Sales	$127.4mm - $130.8mm (Midpoint: +10%)
	2020 Gross Margin	67.4%
	2020 Op. Income	$23.6mm - $25.9mm (Midpoint: +17%)
	2020 EPS	$0.90 - $0.98 (Midpoint: +6%)

Quarterly Dividend

On January 30, 2020, the Company's Board of Directors approved a quarterly dividend of $0.095/share of common stock. The dividend will be paid on March 19, 2020 to shareholders of record on March 3, 2020.

Share Repurchase Program

On February 14, 2019, the Company's Board of Directors authorized the repurchase of up to $10.0mm of the Company’s common stock.  The repurchase program may be suspended or discontinued at any time and will conclude on February 14, 2020, unless extended by the Board.

Conference Call Reminder

Management will conduct a conference call at 5:00pm ET today to review the Company's financial results and discuss its business outlook for the remainder of the year. 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 844-239-5284 ([phone] for international callers), using passcode 2268685. 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 Vascular

LeMaitre Vascular 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 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.

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. The Company refers to the calculation of non-GAAP sales percentages as "organic." The Company analyzes non-GAAP sales on a constant currency basis, net of acquisitions and other non-recurring events 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 has also presented the percentage change in its Q4 2019 operating income, net income, earnings per share and operating expenses excluding “special items.”  That special item is the gain on the Company’s Q4 2018 acquisition.  Because acquisitions, divestitures and restructurings are episodic in nature and are highly variable to the Company’s results, the Company believes that evaluating its profitability net of such transactions and events provides an additional and meaningful assessment of profitability to management.

The Company has also presented the percentage change in its 2019 operating income on an “adjusted” basis.  The percentage change in the Company’s operating income from 2018 to 2019 on an adjusted basis excludes i) the impact of a 2019 restructuring charge and ii) the impact of gains on an acquisition and a divestiture in 2018.  Because acquisitions, divestitures and restructurings are episodic in nature and are highly variable to the Company’s results, the Company believes that evaluating its profitability net of such transactions and events provides an additional and meaningful assessment of profitability to management.

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. Specifically, forward-looking statements in this release include, but are not limited to, statements about the Company's expectations regarding Q1 2020 and 2020 sales, gross margin, operating income and earnings per share. 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 risk of significant fluctuations in our quarterly and annual results due to numerous factors including the acceleration or deceleration of product growth rates; the risk that we may not be able to maintain our recent levels of profitability; risks related to the Company’s ability to attain or maintain regulatory approvals for its products; the risk that the Company may not realize the anticipated benefits of its strategic activities; 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; risks related to the integration of acquisition targets; risks related to the transition of manufacturing of an acquired product line to the Company; 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; the risk that the Company will not be successful in selling to a non-core call point; 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)
			December 31, 2019			December 31, 2018
			(unaudited)
Assets
Current assets:
	Cash and cash equivalents		$	11,786		$	26,318
	Short-term marketable securities		20,894				21,668
	Accounts receivable, net		16,572				15,721
	Inventory and other deferred costs		39,526				27,388
	Prepaid expenses and other current assets		3,312				2,922
Total current assets			92,090				94,017
Property and equipment, net			14,854				14,102
Right-of-use leased assets			15,208				-
Goodwill			41,656				29,868
Other intangibles, net			23,188				13,692
Deferred tax assets			1,084				1,215
Other assets			259				194
Total assets			$	188,339		$	153,088
Liabilities and stockholders' equity
Current liabilities:
	Accounts payable		$	2,604		$	1,732
	Accrued expenses		14,021				15,847
	Acquisition-related obligations		2,476				2,179
	Lease liabilities - short-term		1,757				-
Total current liabilities			20,858				19,758
Lease liabilities - long-term			13,955				-
Deferred tax liabilities			1,173				484
Other long-term liabilities			4,210				2,611
Total liabilities			40,196				22,853
Stockholders' equity
	Common stock		217				211
	Additional paid-in capital		105,934				98,442
	Retained earnings		57,031				45,831
	Accumulated other comprehensive loss		(4,007)				(3,900)
	Treasury stock		(11,032)				(10,349)
Total stockholders' equity			148,143				130,235
Total liabilities and stockholders' equity			$	188,339		$	153,088

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 year ended
		December 31, 2019			December 31, 2018				December 31, 2019			December 31, 2018
Net sales		$	30,170		$	28,389			$	117,232		$	105,568
Cost of sales			10,262			9,171				37,379			31,629
Gross profit			19,908			19,218				79,853			73,939
Operating expenses:
	Sales and marketing		7,452			6,814				30,339			27,318
	General and administrative		5,029			4,462				19,055			17,689
	Research and development		2,499			2,347				9,276			8,197
	Gains on divestiture and acquisition		-			(1,598	)			-			(7,474	)
Total operating expenses			14,980			12,025				58,670			45,730
Income from operations			4,928			7,193				21,183			28,209
Other income:
	Other income (loss), net		260			58				496			235
Income before income taxes			5,188			7,251				21,679			28,444
Provision for income taxes			575			1,226				3,745			5,501
Net income		$	4,613		$	6,025			$	17,934		$	22,943
Earnings per share of common stock
	Basic	$	0.23		$	0.31			$	0.91		$	1.18
	Diluted	$	0.23		$	0.30			$	0.88		$	1.13
Weighted - average shares outstanding:
	Basic		20,054			19,596				19,813			19,426
	Diluted		20,484			20,179				20,326			20,242
Cash dividends declared per common share		$	0.085		$	0.070			$	0.340		$	0.280

LEMAITRE VASCULAR, INC (NASDAQ: LMAT)
SELECTED NET SALES INFORMATION
(amounts in thousands)
(unaudited)
		For the three months ended												For the year ended
		December 31, 2019						December 31, 2018						December 31, 2019						December 31, 2018
		$			%			$			%			$			%			$			%
Net Sales by Geography
	Americas	$	17,775		59	%		$	16,764		59	%		$	69,359		59	%		$	63,649		60	%
	Europe/Middle East/Africa		10,001		33	%			9,634		34	%			39,480		34	%			35,319		34	%
	Asia/Pacific Rim		2,394		8	%			1,991		7	%			8,393		7	%			6,600		6	%
Total Net Sales		$	30,170		100	%		$	28,389		100	%		$	117,232		100	%		$	105,568		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 December 31, 2019
		Net sales as reported		$	30,170
		Impact of currency exchange rate fluctuations			250
		Net impact of acquisitions excluding currency			(2,054	)
		Adjusted net sales						$	28,366
	For the three months ended December 31, 2018
		Net sales as reported		$	28,389
		Adjusted net sales						$	28,389
		Adjusted net sales increase for the three months ended December 31, 2019						$	(23	)		-0	%
Reconciliation between GAAP and Non-GAAP operating expense:
	For the three months ended December 31, 2019
		Operating expense as reported		$	14,980
		Adjusted operating expense						$	14,980
	For the three months December 31, 2018
		Operating expense as reported			12,025
		Impact of gain on acquisition		$	1,598
		Adjusted operating expense						$	13,623
		Adjusted increase in operating expense for the three months ended December 31, 2019						$	1,357			10	%
Reconciliation between GAAP and Non-GAAP operating income:
	For the three months ended December 31, 2019
		Operating income as reported		$	4,928
		Adjusted operating income						$	4,928
	For the three months December 31, 2018
		Operating income as reported			7,193
		Impact of gain on acquisition		$	(1,598	)
		Adjusted operating income						$	5,595
		Adjusted decrease in operating income for the three months ended December 31, 2019						$	(667	)		-12	%
Reconciliation between GAAP and Non-GAAP net income:
	For the three months ended December 31, 2019
		Net income as reported		$	4,613
		Adjusted net income						$	4,613
	For the three months December 31, 2018
		Net income as reported			6,025
		Impact of gain on acquisition		$	(1,598	)
		Adjusted net income						$	4,427
		Adjusted increase in net income for the three months ended December 31, 2019						$	186			4	%
Reconciliation between GAAP and Non-GAAP earnings per share:
	For the three months ended December 31, 2019
		Earnings per share as reported		$	0.23
		Adjusted earnings per share						$	0.23
	For the three months December 31, 2018
		Earnings per share as reported		$	0.30
		Impact of gain on acquisition		$	(0.08	)
		Adjusted earnings per share						$	0.22
		Adjusted increase in earnings per share for the three months ended December 31, 2019						$	0.01			3	%
Reconciliation between GAAP and Non-GAAP sales growth:
	For the year ended December 31, 2019
		Net sales as reported		$	117,232
		Impact of currency exchange rate fluctuations			2,306
		Net impact of acquisitions excluding currency			(8,583	)
		Adjusted net sales						$	110,955
	For the year ended December 31, 2018
		Net sales as reported		$	105,568
		Net impact of divestitures excluding currency			(787	)
		Adjusted net sales						$	104,781
		Adjusted net sales increase for the year ended December 31, 2019						$	6,174			6	%
Reconciliation between GAAP and Non-GAAP operating income:
	For the year ended December 31, 2019
		Operating income as reported		$	21,183
		Impact of restructuring charge			139
		Adjusted operating income						$	21,322
	For the year ended December 31, 2018
		Operating income as reported			28,209
		Impact of gain on acquisition and divestiture		$	(7,474	)
		Adjusted operating income						$	20,735
		Adjusted increase in operating income for the year ended December 31, 2019						$	587			3	%

CONTACT: CONTACT: 
J.J. Pellegrino, CFO, LeMaitre Vascular
781-425-1691
[e-mail]