LeMaitre Vascular Announces Q3 2020 Financial Results

Thursday, 29. October 2020 21:05

BURLINGTON, Mass., Oct. 29, 2020 (GLOBE NEWSWIRE) -- LeMaitre Vascular, Inc. (Nasdaq:LMAT), a provider of vascular devices, implants and services, today reported Q3 2020 results and announced a $0.095/share quarterly dividend.

Q3 2020 Results

  • Sales of $36.4mm, +25% (-3% organic) vs. Q3 2019
  • Op. income of $10.0mm, +70%
  • Op. margin of 28%
  • Net income of $7.5mm, +45%
  • Earnings of $0.37 per diluted share, +44%
  • EBITDA of $12.6mm, +79%
  • Cash & equivalents up $9.3mm to $34.4mm
  • Debt down $4.5mm to $60.5mm

The Company posted sales growth in the Americas (+37%), Asia/Pac (+12%) and Europe/Middle East/Africa (+6%). The three recent acquisitions (Artegraft, CardioCel and Eze-Sit) and the return of elective surgery drove growth.

Gross margin decreased to 62.3% in Q3 2020 (vs. 69.3% in Q3 2019) primarily due to Artegraft purchase-price accounting.

Operating expenses decreased 11% to $12.7mm in Q3 2020 (vs. $14.3mm). This decline was driven by COVID-related cost-cuts, including reduced sales & marketing expenses.

Chairman & CEO George LeMaitre said, “Record sales in Q3 and tight expense control led to healthy bottom-line results and an improved balance sheet.”  

Business Outlook

Q4 2020 Sales$34.0mm - $38.0mm
Q4 2020 Gross Margin65.5%
Q4 2020 Operating Income$7.1mm - $9.7mm
Q4 2020 Earnings Per Share$0.25 - $0.35
(Midpoint: +32%)
2020 Sales$125.8mm - $129.8mm
2020 Gross Margin65.6%
2020 Operating Income$26.3mm - $28.9mm
2020 Earnings Per Share$0.94 - $1.04
(Midpoint: +12%)

Quarterly Dividend

On October 20, 2020, the Company's Board of Directors approved a quarterly dividend of $0.095/share of common stock. The dividend will be paid on December 3, 2020 to shareholders of record on November 19, 2020.

Share Repurchase Program

On February 13, 2020, 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, 2021, unless extended by the Board.

Conference Call Reminder

Management will conduct a conference call at 5:00 p.m. ET today to review the Company's Q3 2020 financial results. 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 4052529. 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 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.

The Company has also reported non-GAAP outstanding debt, which excludes the impact of unamortized deferred financing costs. The Company believes that considering its debt in this manner provides a view of the amount owed on a cash basis.

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 duration and severity of the impact of COVID-19 on the global economy, our customers, our suppliers and our company; the duration of the lapse in CE mark approval for certain of our devices; compliance with foreign regulatory requirements to market and sell our products outside the United States; 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.

(amounts in thousands)     
   September 30, 2020 December 31, 2019 
Current assets:     
 Cash and cash equivalents $29,279  $11,786  
 Short-term marketable securities  5,097   20,895  
 Accounts receivable, net  19,625   16,572  
 Inventory and other deferred costs  45,639   39,527  
 Prepaid expenses and other current assets  2,612   3,312  
Total current assets  102,252   92,092  
Property and equipment, net  14,133   14,854  
Right-of-use leased assets  16,373   15,208  
Goodwill  65,945   39,951  
Other intangibles, net  60,539   24,893  
Deferred tax assets  1,385   1,084  
Other assets  942   259  
Total assets $261,569  $188,341  
Liabilities and stockholders' equity     
Current liabilities:     
 Current portion of long-term debt $2,250  $-  
 Revolving line of credit  21,000   -  
 Accounts payable  2,168   2,604  
 Accrued expenses  14,679   14,014  
 Acquisition-related obligations  2,543   2,476  
 Lease liabilities - short-term  1,806   1,757  
Total current liabilities  44,446   20,851  
Long-term debt  36,229   -  
Lease liabilities - long-term  15,192   13,955  
Deferred tax liabilities  90   1,179  
Other long-term liabilities  4,629   4,215  
Total liabilities  100,586   40,200  
Stockholders' equity     
 Common stock  218   217  
 Additional paid-in capital  109,640   105,934  
 Retained earnings  65,457   57,029  
 Accumulated other comprehensive loss  (3,009)  (4,007) 
 Treasury stock  (11,323)  (11,032) 
Total stockholders' equity  160,983   148,141  
Total liabilities and stockholders' equity $261,569  $188,341  

 (amounts in thousands, except per share amounts)        
  For the three months ended For the nine months ended 
  September 30, 2020 September 30, 2019 September 30, 2020 September 30, 2019 
Net sales$36,416  $29,100  $91,818  $87,062 
Cost of sales 13,712   8,934   31,602   27,117 
Gross profit 22,704   20,166   60,216   59,945 
Operating expenses:        
 Sales and marketing 5,157   7,429   17,788   22,887 
 General and administrative 5,901   4,551   16,425   14,026 
 Research and development 2,098   2,281   7,230   6,777 
 Gain on sale of building (470)  -   (470)  - 
Total operating expenses 12,686   14,261   40,973   43,690 
Income from operations 10,018   5,905   19,243   16,255 
Other income:        
 Interest expense (665)  -   (732)  - 
 Other income (loss), net 25   (15)  (86)  236 
Income before income taxes 9,378   5,890   18,425   16,491 
Provision for income taxes 1,865   706   4,238   3,170 
Net income$7,513  $5,184  $14,187  $13,321 
Earnings per share of common stock        
 Basic$0.37  $0.26  $0.70  $0.68 
 Diluted$0.37  $0.25  $0.69  $0.66 
Weighted - average shares outstanding:        
 Basic 20,254   19,871   20,201   19,731 
 Diluted 20,474   20,378   20,434   20,258 
Cash dividends declared per common share$0.095  $0.085  $0.285  $0.255 

 (amounts in thousands)                
  For the three months ended  For the nine months ended  
  September 30, 2020 September 30, 2019 September 30, 2020 September 30, 2019 
  $ % $ % $ % $ % 
Net Sales by Geography                
 Americas$24,184 66% $17,698 61% $57,462 63% $51,584 59% 
 Europe/Middle East/Africa 10,039 28%  9,452 32%  28,339 31%  29,479 34% 
 Asia/Pacific Rim 2,193 6%  1,950 7%  6,017 6%  5,999 7% 
Total Net Sales$36,416 100% $29,100 100% $91,818 100% $87,062 100% 

(amounts in thousands)         
Reconciliation between GAAP and Non-GAAP sales growth:         
 For the three months ended September 30, 2020         
  Net sales as reported $36,416        
  Impact of currency exchange rate fluctuations  (484)       
  Net impact of acquisitions excluding currency  (7,584)       
      Adjusted net sales   $28,348      
 For the three months ended September 30, 2019         
  Net sales as reported $29,100        
      Adjusted net sales   $29,100      
  Adjusted net sales increase for the three months ended September 30, 2020 $(752)  -3%   
Reconciliation between GAAP and non-GAAP debt outstanding:         
 As of September 30, 2020         
  Debt as reported $59,479        
  Add back unamortized deferred financing costs  1,021        
  Adjusted debt outstanding   $60,500      
    For the three months ended For the nine months ended 
    September 30, 2020 September 30, 2019 September 30, 2020 September 30, 2019 
Reconciliation between GAAP and Non-GAAP EBITDA         
 Net income as reported $7,513  $5,184  $14,187  $13,321  
 Interest (income) expense, net  650   (193)  537   (574) 
 Amortization and depreciation expense  2,599   1,345   5,778   3,975  
 Provision for income taxes  1,865   706   4,238   3,170  
 EBITDA $12,627  $7,042  $24,740  $19,892  
 EBITDA percentage increase    79%    24% 




CONTACT: J.J. Pellegrino, CFO, LeMaitre Vascular

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