LMAT - Earnings call transcript Q4 2020

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Operator

Welcome to the LeMaitre Vascular Q4 2020 Financial Results Conference Call.

As a reminder, today’s call is being recorded. At this time, I would like to turn the call over to Mr. JJ Pellegrino, Chief Financial Officer of LeMaitre Vascular. Please go ahead, sir.

JJ Pellegrino

Linda. you, Thank thank XXXX and joining on us Good call. you QX conference our afternoon, for With call on our me today’s President, LeMaitre; CEO, Dave and George Roberts. are Chairman and

Today, statements possible, within the risk is forward-looking of I’ll identify safe using read Act Before Litigation Private subject we and meaning such as to make accuracy of those we statements harbor to XXXX, the begin, the statement. will words forward-looking try some we expect, and by Securities our Wherever Reform pursue, anticipate, U.S. uncertainties. similar will which of expressions. believe, forecast

Our date. regarding to risk and estimates the and should Please refer forward-looking those disclosure materially views including representing assumptions XXXX, our relied on information be factors or XX, SEC as to and upon results statement the of February expressed XX-K statements are implied. forward-looking the not cause in our differ based subsequent subsequent of could any our on recent estimates most filings, today, or from factors on that cautionary

associated call financial contained our this organic to Relations website, non-GAAP which will turn call this LeMaitre. we now discussed discuss the measures, call, of release press to over available George growth. is in non-GAAP GAAP the in A include sales EBITDA the reconciliation During in and section of measures and is Investor www.lemaitre.com. I’ll

George LeMaitre

and the fully knew recent with discourage COVID’s Surges began last impact straight to QX having at has increases spoke the non-essential employees, When correlated COVID Thanks, JJ. employees, with and branding from on-campus our That work Indeed, our XXXX topics: tenth during profits, On today’s surge, November, to rates now, spread. virus. on and in I in had we in annual year way one to number experience as recent our an few call, I’d contracted this impact change. dividend with recovering. December XX X% infection increased reduce a company, XX sales January on like we and recovered LeMaitre. our still our COVID’s additional of our of our XX of who October, to employees employees you review

again that our February voluntary measures effects. us the discouraged. company, impactful of mitigate wristwatches wave implemented vaccine to fall, XX in physical are COVID remain though, Because where also COVID’s on-campus regard we there’s masks no the or of calculate the with impact With once not worldwide implemented is and exact employees deployed until distancing. told for financial We’ve and work that some be we’ve to fully being XXX% on time. we real so not our our buildings and administration sales, was to may expect require As spread the on summer way likely will distance-sensing its recent this

declines XXXX is the COVID to at general Looking would QX of short we’re in X% in the QX impact decline guidance start anything to increasing rates will COVID positively sales. the hard quarter, start their vaccine businesses. found that have saw of similar organic COVID for a basket is era, provided Though indeed, proxy QX you current impact vascular and in as the it to predict of the giving hospital-based XXXX. of I both a our today we current much at to expect growth guidance in Perhaps a the limited this peers, XXXX. on one we the And sales peripheral however, well

growth XX% growth XX% QX, in year X% sales and was sales ago million in organic generated the place expectations from contests. various launch. line the our channel company’s year-end were we’ve light EPS quarter. by $X.XX and came and million reported in December Europe. results, around XXXX, XX% in to In contributed QX, dividend pay also loading in in growth we’re probably valvulotome Artegraft and Record took for posted various of operating increased due operating of and versus in quarterly bottom by our As down quarterly catheters. debt to million Asia financial acquisition, pricing rep in results. The XX than sales up XXXX achiever million Pac record aggressive $XX.X to sales sales up dividend growth in while produce XX% Americas, $XX.X We sales share. income More of QX we QX, normal of we this straight expenses XX-year combined share. to a $XX.X dividend EBITDA With embolectomy our the our increased in $X.X QX approval long-term driven positioned strong XX% some Geographically, largely This believe now Japan $X.XX per profitability allowed the and the indices. increases, by years us to of enter XenoSure

to just years our the in logo vascular radiology. that ticker LMAT to changed. website, we notice ago our lemaitre.com. by I’ll word By turn made open had and may tightened to to tagline, or you vascular cardiac eliminating dropping essence pure our more that, already adjacent some work also over this call corporate surgery, have and door spaces name interventional its the our JJ. branding perhaps from Finally, and choosing we’ve the has In surgery ways, With move our our left

JJ Pellegrino

price Gross QX I’d XX% expenses, in year-over-year, about $XX.X say reps fewer travel. X% our results, a increase was a Artegraft margin largely our XX% gross expect and G&A QX price expenses regulatory were CardioCel our by down were few do margins decrease marketing million, in versus driven embolectomy accounting QX QX down by Thanks, and European businesses. as Artegraft cutting. as CE words XX%, pay and mark catheter Selling to as purchase less QX XX% was of Operating expenses in down, and operating started We increase XX.X% offset driven began driven margin, This in well from largely increases well financial in the with hiring was X% and are as and debt to in accounting R&D a gross normalized by expenses, due releasing close or to XXXX. status the implemented. down to Artegraft as George. like our part QX margin guidance. COVID-related The in unwind XXXX. XXXX latter lower MDD amortization cost decline year increase Artegraft the XX% initiatives. expenses We we by to in acquisitions as

on we cautious as front, We to resources manage however, will try additional remain with this sales.

XXX newly in taxes, with complement natural coming acquisition. employees, QX, XX as largely after of end acquired have the a the $X.X a to line per interest of The earlier. increase we generated the reps and net continues U.S. now we Artegraft today, $X.XX perform down of in As to expectations to expense and Artegraft million XXX above the a $X.X sales income had year from which product revenue and QX share. million equates At

The In driven repayment $X.X with QX on cash, We million January of addition, selling was by prices Artegraft of XXXX raised we in $XX.X XXXX. the versus X. $XX debt. decrease in ended million decrease a largely million QX

from shunts, three to marking notified issue mark, cash repayment, In of certificate. relation bodies, CE to shunts increased our new CE debt mark additional expect by we issued CE to will LifeSpan CE notified for million two the In now European marks. due Pruitt SGS this the we CE as February, an SGS, six this marking, by And II in by in QX quarter. carotid CE as XXXX notified process. and engaged one exit AnastoClips. our FX We a marks Excluding May carotid abrupt these FlexCel well needed for our $XX.X XXXX, Annex bodies body prior accelerate

XXXX of We extended of not new derogations could accounted QX audit XXXX, marks for of are our inventory If above sales. the CE that and pursue hospitals hopes audit depend worldwide a issue a audit are Devices the QX supplementary XXXX not currently or the successfully combination sales of mark to that XX% of the of representing profit. and and the in EMEA sales we for closure. the reissued Together, accounted to and of additional of QX ability devices. May to CE XenoSure audited mitigate Separately, we some successful remaining CE continue sell lose potential our TUV and marks sufficient the country-specific referred SUD have derogations will XX% with continue of CE partially and resolved, findings. findings gross another temporary collaborate the of to that CE we inventory. AlboGraft – to the XXXX. TUV sales AlboGraft of other XenoSure in successful they or available the impact XX% Issuance bodies, resolving EMEA one via depend our SUD however, closure, Retention of process, In audit part open were and XenoSure We might for closed, believe, notified audit open. XenoSure/AlboGraft marking in EMEA represent TUV these TUV EMEA by XXXX. of the by previously issued also QX valid XX% as of marks, can issues by of other been they the we two the in remains marks and SUD, QX XX% on XXXX notified with through EMEA sales CE if goal our CE then is the XX% engaging production, on audit marks or AlboGraft any bodies.

At At $X.XX an of XX% our million XXXX. of of XXXX operating a increase represents XX%. share income XX%. $X.XX share represents Turning the $XX.X versus represents the increase And an million guidance. increase an million of of $X.X midpoint, $X.X guidance of sales guidance midpoint, QX XXXX QX to guidance QX our to to to million per EPS our $XX.X QX

recently the any future. back and Fishbin to I turn Matt KeyBanc. to welcome initiated Matt we operator look to it the to it with over questions, and Brett Brett operator. like that, With on them Mishan I’d forward the in and from LeMaitre, I’ll over Before working coverage for turn

Operator

Your first Wise [Operator question from Stifel. Rick from Instructions] comes

is line Your open.

Rick Wise

of what sorry, seeing afternoon I’m monthly weaker do And can to you of might good we have do everybody. ago, have months Just And think? bottomed guessing, a sort frame you you sort Maybe it quarter to like of middle with. better? But feel look company, George, all to start trying things couple I’m like feel COVID. you of about than Or in now? we three ask do starting Hi, a now? encouraging for trends, I’m to of what every weekly things weaker all? the an you just are are after, to where trends. at December, they’re hoped January ask complications great the see and

George LeMaitre

Yes.

Okay.

Rick. Okay,

give to going I’m of XX% think want. what I you

won’t I think February. you January I or I’m to you I going here. think get go to we’re But dig into want

Let – we’ve done me twice. this once,

what do sort I you of QX that been, QX was a but read was. like April. was see certainly maybe sense the our like because I making know come lot like. in job and maybe rates where every me for of we to from of think And be out sort be numbers are might might we’ve to kind fun starting I this would you to company month think Let QX, your that, can say, it’s but of can’t. of I would back growth out to here data, come a And of better organic sort you I And trip it what of around

December. So all for I’m and X%, X%, at May. minus X%, XX%, are now, minus going are plus X our those minus minus to company. on just minus your in plus And April, X% go August, COVID in that months in starting XX% X% minus X%, record

Rick Wise

think price assume moving December. not of obviously, through I’m in obviously, that detail. What roughly think you quarter. do growth, I’m and you did about the just $X.X Or equal, trying to right, Is quarter that amount I X it? in XXXX? the make same to we – curious, the see hike. now all just to Well, that? – January sequential a Is we the we an third you right if the start would it that I I’m encouraging pieces? clear as for if I’ve lot million, fourth Thank got things And of way Artegraft, proceed got

Dave Roberts

over I mean, million. guide very million XXXX. to Dave. not it’s QX did Rick, going into to QX Yes. increase far We $X.X we’re from see $X.X

line bottom result guidance beat the think pleasant we a surprise. been has I provided. have the nice We

sales the products. other came And I provided were were LeMaitre sales not reps of XXXX, think Remember, share, commission back half getting at a the in $X.XX. and on on Artegraft any Artegraft we not reps $X.XX LeMaitre product. we commission in getting

January this was X. change a on that then the on big other that changed price obviously, X So increase. And was, January thing

really not of we exactly because XXXX. feel specifically happen I’m what’s that can say Obviously, product So on you we here don’t XXXX bullish We throughout really to can quite price we’re I to much lines. with about the good think going guide stick. tell increase. But

optimistic in And future. so Artegraft are goes we where about think we the

Rick Wise

just think but maybe business? That’s under great, the that has things I Is a appreciate two it? help not recover if control a percent just and of the the do to – be year, bit, take OpEx, that know do how lot you – way impressively, going the I that to forward we the that’s go more we directionally? Should right about words would can Dave. you businesses, or of that, awesome. assume right us And through little your ones could OpEx sales, to cost many up? so it think I about me. like, frame out last with mean, Again, for travel don’t or going as and are, obviously, contained that what

JJ Pellegrino

JJ. is sure. Yes, This

QX. April QX as headcount now as XXX So you again through as then came reduced reductions we in head XXX and ago, back a XXX count year and in recall, Total is did result. versus OpEx COVID some or a to really February

terms in back. hiring go And ways so to think, have a I of obviously, here, we still

the I so we XX at is the count get Your of question do how really is, do how quickly get that? rep back? back we And quarter. think And where – sales at is end

or I think currently. we at We were in XX XX XXX QX said XXXX.

sales areas that to want access go of We of and and happening We where kind be with all back So think And to I folks, you want recovery clearly a infinitum. match that there’s that. ways terms then work. measured want and of non-sales more there. good a you’ve cut do in crisis, got with don’t during to times to people And that be we to hospitals stuff. ad

we’ll for that. lot type while it you to now, sort do And a release of physicians. begun we’ve begun that a to in so support physicians – got physicians, of are done we’ve of to areas release get And continue to

are against direction you the So for I think the hire trend, to back the watermark. number recent towards guys is, high some these going

that You doing measured think need us try I with and we recovery in to the the months. would it balance was the of right company three, four think of all the XXX. pace But two, where off Think don’t at a it with was sales be workload, this throughout jumping to to areas bat.

Rick Wise

All right.

and speak. Dave so M&A. called that adjacent expect cardiology three, the and interventional year the – – a XX as be we one or or, wouldn’t Should be is, last adjacent Is main up surgery company aggressively building let’s these question Just or to me, it’s on the if or always, next refining specifically, more we over thing, cardiac whether for George, say, spaces what’s ask three LeMaitre now? these the going didn’t about priority it’s it the to that spaces? of to call you But the out been maybe Or lately? up very

George LeMaitre

we’ve big thing, are already Yes, So spaces question. into. Great right? Okay. the actually name those adjacent that change, gotten

and some bought names here of We LeMaitre give that’s already CardioCel, bought those that maybe Vascular. Cardial. Both we’re two think as should hints. I We you you message remember. the is LeMaitre not

spaces. acquiring already there. we’re preferentially necessarily I going I it in be don’t think so we’re to means And the think

is watch really it acquisition, was Artegraft play, think was that – our June was vascular. that and in action really words, actions, XXXX. our of a nice peripheral I And their big largest you people’s not last

to – I’d swag want I’m open So say it. be but necessarily, going I there. say already to would you And not here. we’re to And

there’s and as of like used something radiology are slides I by XX% our some surgeons think our website, sales already some on interventional well. say to cardiac PowerPoint

that and it’s Dave think acquisition-related recognition So already a an already there, we’re since a question. on might there. have I it’s this take we’re

Dave Roberts

what would George, I No, you Yes. echo, said.

And surgery ago. several the patches. We’re course, cardiac with we already a months allograft in have cardiac of cardiac launched

are message interventional. is side, On and world, I there vascular – the but of the XX,XXX let’s And in interventional use in now or surgeons think them there their U.S., that the are of XX% half say, our the procedures endovascular products.

a interventional cardiac the – is the tapes, little a our do but offer with the about with the or as down got a to able endovascular it’s the And to relationships we core of interventional access, product open products. vascular to maybe customer, to be then other embolectomy we fairway, radiopaque course, wire. is so and handful and an We’ve surgery, some devices, left we think bit And already little line sticking it’s to over-the-wire if over dialysis open of got already right We’ve surgery leverage bit have. catheters. valvulotomes

So I what build off there a little trying already to think started bit building. we’re just we’ve to

Rick Wise

lot to a Thanks everybody.

George LeMaitre

Rick. Thanks,

Operator

[Operator Instructions] comes Your Mishan KeyBanc. next question from Matt from

is line Your open.

Brett Fishbin

and question appreciate topics. can Fishbin for try maybe just If is Dave, kind JJ, two happy the we’re this one introduction, or and then George, today on on be Hey, one to XXXX Matt. the I Brett I follow-ups joining calls. on the other outlook,

or about XQ? before year a want could I full scenario? to see at in able revenue maybe in how year provide XQ thinking to a point guidance you’re potential directionally know XXXX you but for you not So being discuss case full base some potentially what today, providing would progression you’re And

JJ Pellegrino

and Yes. Thanks Brett. Sure, welcome. very much,

on for can you expect tea leaves what how from expense-wise, an I call, which think kind already is briefly the And you year, read is how full can mean, increase. said we’ve the question even So this I much, fast. the of

on line, more of historically, sort organic the is what just and appropriate if to growth top that, be think I about on you some can stays, and it organic should decent frame right. if guess, maybe thinking the normalize an sort think specifically line we’re a what of top XXXX, rate about, top throughout add an based to maybe of On off has you to I you’re organically, and growth answer, X% you our of moved company. you think that then you that XXXX organic it Well, with you up if think will of it through feels to through FX asking if went layer what the start come lot a answer FX. chunk the number Because that And X% year. we a

add some piece, can change year of you our year. go apply or Artegraft Q or to million, number of of that, for the you got then is, full FX And up that. three. number $XX million and And so so a last Artegraft year if then look for you segment think whatever full $XX geographies to And the a our have and you’ve the sales didn’t

You essentially midyear. acquired it

are of think we’re and three going think And so think to those chunks revenue. terms the we I try might that in you year about where this understand might

get the asked you end didn’t second think I question the I that. at it. of

Brett Fishbin

signs macro provide that year quarter? maybe Just in next if a being year, full be guidance there mostly to to you’d like would before see maybe the able some

JJ Pellegrino

what guidance next that year full give Is asking? we quarter? you’re Will

Brett Fishbin

that? able just Or do to to like to be what see would you

JJ Pellegrino

obviously all peers mean so QX. even giving It kind Not reading it’s of like kind challenging I here. of the talk about tea guidance. are Yes. to leaves our quarterly of enough was

that we it’s down with if but be them entirely might you’ll you the are. sure, I’m list, certainly everyone. unique find go so not ubiquitous that of not bunch aren’t. probably It And a

ton uncertainty. So I still would a there’s say of

tell lot. me graphs those will and going, are You that where COVID help a

want organic normalize, terms start you get I I when then, start think things they’re rational those say in guess, of the guys those think the I that like x monthly longer-term guidance I we to the after some thinking we strain. wouldn’t to for George down, that growth if months. Until visible, seeing can maybe predictable then you you give to so you settle be and rates, but that And starting leave outlook. of start that. normalcy rattle will rates a Maybe We’ll fair you to go in organic maybe we and don’t is want growth last beyond more would group feel through a

Brett Fishbin

was the All signal this for right. should And we you our the a that from And enough. relatively That’s Artegraft dialysis but definitely given that was did commentary least, patient from see then turning with Fresenius on line its increased not, impact back an fair at considering call? model to end in in that if mortalities is XXXX? be population that market. headwind

Dave Roberts

graft, to is time this unlike a I’m fistula we hear gets graft certain many sure to of the not mean needs I that Good your gets of a implanted acquired that takes in Dave. and voice is access So one patient into mature. saw created that. on amount of don’t call. so dialysis that advantages Brett, or this mature, bovine a of patient. them – a which a That we

uptake otherwise biologic would – so with maybe there’s there more than And be. think of be an to graft, little COVID maybe a there during could respect I bit –

I and graft I something risk that for use and implant disease like really is But that the pandemic. that away. COVID. certainly of in right say no, recognize go I And a a do open of – would biologic as modality, end-stage so treatment we through surgery sort I a that premium terms would devices you important, renal think say, the having can are factor comorbidity think at is And I

Brett Fishbin

should DCB? me. any the for indication from more around from the its in recent And technology seeing panel that to? you FDA unfavorable guys procedural Do outcome Dickinson’s are paying one new have And any be Becton, BTK you recent on thoughts we attention broadly, right. All other then space last BTK

Dave Roberts

continue having that arterial the that companies, the and take that’s, that follow is high-level various work but And away think to you body were panel, taking message is get diameters the pretty they mean well-heeled closely. the low to your long. knee I knew job. the tissue I see flows, We below get I knee, that for wants valvulotomes for below doing there run into I you down companies at a its I part we when have bifurcates the Really Yes. didn’t worked well think, gets there. so devices vasculature difficult and of trifurcates, small it reason when what own so

We’re on our eighth into generation smaller so we’ve the them of valvulotome. And we’ve to work – further and to arteries. one the and all leg make foot, they of is more the key pedal generations attributes into down the the developed

drug-coated have of is the the I a continue the the technology so LeMaitre. exactly valvulotome and to this But so part and number to balloons I take not line and doubt, with product continues think will no reason that. And one there, at run far, and atherectomy that’s companies be

Brett Fishbin

for much. me. it. All right, very all That’s Appreciate Thanks thanks.

Dave Roberts

Brett. Thanks,

Operator

Mike Petusky Your from next Barrington comes from Research. question

line Your is open.

Mike Petusky

ago, year. Good right. Congratulations possible evening, I the dollar me XX had fantastic if asked have wouldn’t job. believed months a terrific XX, was guys. earnings All you so on in

XXXX? at dialed this would at Is if So – I accurate? you of positive Or really probably I’m that at point? X% pricing portfolio. do we be product – your decent the actually terms George, completely that like you what this mean, in not tailwind have year – we mean, have in are of look is talk a to about I sense you I your tailwind for that could point assuming – as X% was wondering

George LeMaitre

XXXX, think on the Well, think on I won’t up I the which you I so is website we far can presentation. but I some out corporate into dig hard give have numbers,

I installed any We we put year, probably, the into serious another it And of together price could XXXX, pretty going any would price on say is find in you that. largely hospital. hike, hike. continuation speaking, which American list a For X% a price

Mike Petusky

Okay.

tailwind actually to So portfolio, if I about closer your X%? I’m could thinking thinking the across be

George LeMaitre

X%. a together. varies year We last put it say said line. the was healthy product I that. increase I price didn’t it by And

number, a and did jump blended. So jump, grow, before. years maybe that looking there’s And them significant a them some grow, – of – before some blended and didn’t of but X% was year backwards two of the from of that

the it valvulotome to out was pricing. call I talking tried So script in it about here, notable. aggressive

underscore so pricing another continue just pay work differentiated to devices. to bills way to our we And the and on It’s here.

Mike Petusky

Absolutely.

lot talk So – of of, a think, price lot in double-digit raised and I talk a But just out they’re around you detail. level just there’s well. the Artegraft, that some I been – opportunity price love that terms of guys mean, there’s speaking it I there’s about talk a you would there was you Artegraft. fact of increase? meaningful even called Can that that of

George LeMaitre

list. Sure. It’s price on there out

$XXX double unit, little it around it’s So a so a is bit north of digits. Yes.

Mike Petusky

Okay. Terrific. Great. right. All

Okay.

category, product the to products? the call the just else you products, by their or key lack growth anything of So rate mean, out? terms sort valvulotome, growth of of can XenoSure, then I in quantify like, thereof

George LeMaitre

that’s Maybe happy give Sure. We to already we’re information always say QX. go I back into you happened. the

We’re excited forward. about guiding for a so But QX… little bit less

Mike Petusky

was I QX. about you was too. if asking Yes. XXXX, for that’s to want out give the about I QX. lay asking But great, No,

George LeMaitre

is lot. a thanks question. great It Mike, Yes. a

So to I’ll try that. do

Okay.

of And cadaver product then October QX, the Chicago XX% were catches veins. only October we only of bit middle up were product because allograft your They’re XXXX. in reported, So COVID. little organic but the body XX%, good The is in cardiac up XX%, we are the – some was – the XX% guys bought the in product, it catheter XX%. Those happens there’s to maybe used that tied COVID that’s extra clotting if valvulotomes related. up embolectomy a

bad X% and good the were down say, TRIVEX so I’d struggling those, So forth. with: down And was XX%, then and guys. patches were bovine guys, carotid the we then keep so on

major stories you. I are just those that the I think gave

Mike Petusky

XenoSure? And about Xeno? what

George LeMaitre

Okay.

patches carotid down bovine was Xeno that, down X%. are X%. Inside So of

Mike Petusky

Got you.

Okay. of reps. sales a on the Can sort sort bringing taken you’ve I just approach ask question? cautious a back So strategic of

correct have please as I’m remember, guys that last back getting cost? need I done George, even you the point at But more they’re my go even if question if this, you’re to you thinly do I’m to all territories, Are you to it any I it. you territories, of and on what a cut haven’t you value Do as covered, when guess had me. – ever deeply Like, the think is, cut very so from we well difficult XXX? incremental covering to very, said, back really you in environment. sort if And year, I one I thought abandoned of wrong sort you XXX? need go

George LeMaitre

this – through thinks in I reps, were because he sales stuff, going – how is your reps that’s we business. addicted all When spring all that grow hiring me, my our hey, that’s that, boss sales I kept reminding COVID and the when to we

course, we’ll in question So just answer of the the to question cautious. to my want be short No mind. But back – it’s is, XXX. you someday, be at

so one fewer because like just cover fewer hospital do can state. you to there’s us Oddly to levels this, last can – and number, they Hampshire they get saying, of yes, knew go we bumped wanted I’ll they like enough New give into, activity can or further. me in reps normal can things are not now. If right And reps I grow this things the you slightly into that. Yes, throw and me larger And step a Because geographic Massachusetts, one can – hospitals the Maine oddly, sort and get April, into but do another oddly, XX% in each give handle we patch. of a out hear sort think no

of But as today. bumped at So we XX of we’re kind back into that.

XX year-end. at at only We’re

so And there. getting we’re

Our X.X ago. our was watermark low years was XX. high XXX watermark And about

point. yes, at some we’ll And get back so there

race we suppose. normal? it’s not folks. kind back then we But I are start back think like saying, QX by QX But I’m hire we saying then more when there And or I are a few things of then. don’t guess, go is we up? of can start back we’ll going, a want it I little I’d thing we to going kind there. put you is thinking this bit open whole when to And to

JJ Pellegrino

Mike, think process. what they’re on trying if is, get I’d and doing this the normalized focused still they’re about is I one new backlogs devices. to add to think you much on not they’re probably thing, JJ. working docs And now, more a which so and

changes, well And highly you this somebody little as into is to a window switch, And then from too terms And want But going we’re here start again. that so less that that. to of soon. the rehiring to back gives particularly extent exposure cover not feel of and devices where that likely there’s in it’s course, we you going LeMaitre that different an product. becomes of maybe that bit to a hiring differentiated watch

Mike Petusky

if touched China trial? Got last the XenoSure may just this, it on the on George, you. one, missed have and you any I And but update

George LeMaitre

well. with going are of the things or last started the for Believe quickly Actually, showing year, sure. Yes, not, China end patients of it COVID in back at bounce follow-up. back the up

vascular May, me, filing excuse sides Again, the we’re long both with in we’re of we’ll that the Chinese the for of so short Chinese is – The there. trials – very trials, now two be fully runway enrolled the different approval. running time. a And short cardiac news the that’s and on FDA

but to that’s another in, I think that years think in wait, have two May. we’ll I

Mike Petusky

great, Okay, guys. thanks all right,

George LeMaitre

Mike. Thanks a lot,

Operator

James Sidoti Your next question comes from Company. from & Sidoti

line Your is open.

James Sidoti

Can hear me? Hi, you good afternoon.

George LeMaitre

Jim. Hi, Yes.

JJ Pellegrino

Jim. Hi,

James Sidoti

A of couple follow-ups. Great.

continue? think to Can notified of keeps on at you the to long you R&D sense night? able a be getting bodies the over last new that to how you CE about couple And calls do talked us some that costs added the in extra do and just this get notified You for quarter? you renewed you of switched your What marks you’ll something give the what Or are will up pretty is bodies? confident cost that – think products.

George LeMaitre

maybe in then after Jim, some fills up numbers The tell that and good I’ll this, track it. give set does going X-K. with keep I in some It’s also I’m kind answer in really thought with there’s is, folks, bubbles one struggling. And and JJ’s on it two heard you, you JJ night. script. with got of at of me you still we’re things We’ve I done think a the now.

getting guys they’re And folks, of QX, principally, in September, moving QX, stuff October. engaged we think, So I ahead We those company, couple got and a SGS they’re this first new done. February Of And six we four of really of CE LifeSpan good mark three XX that them. feel guys in those product. for more. about the that in control need, our months total we

of On them, getting years And side, keep what a we’re I’ll notified body, with story continues two we’re lot They’re the the flip a collaborating but this in and them deep we with struggle. with a working TUV this questions. and notified we’re call body.

up very in XX It’s have called fortunate and governments done approval a us, mini temporary what’s a that mini We’re approval. derogation. the with they’ve for stepped European

countries TUV. to derogations with based So are continue while state these in on available struggle devices these XX we

bothers yes, So me lot. very It’s frustrating. it a

As the very little large spend, And down here the I’ve worn it’s bit. spend. to unfortunately, a maybe clock a

the some JJ So of that back rough ballpark on. answers JJ, question. might to have end

JJ Pellegrino

of as at at over looking I high notice sales a if mean you’re all you R&D. the Jim, really four Yes. quarters, R&D level, percent last is wouldn’t the

You know and the that we’ve process is changed within R&D, engineering development, the thing has And regulatory. product got mix.

while I spend was. from clinical so is of aggregate regulatory sort kind come I’ll other two ballpark, double the spend it the the where in and have And be of guess, same say. down, almost And the may

regulatory because are more forward-moving buckets the control we we on has still that And other obviously spending two less And the on like R&D. within buckets don’t mix It’s so other those like don’t under shifted aggregate. the But in investments. mix. two and

can mix it’s And so the that change, been. within sort altered R&D. it Though high on I of think it’s level where that’s

James Sidoti

down, And up if then pay on had Okay. debt you million. cash your you take All cash, out million. – net $X you $XX And said about right. is income you the

the did come So balance where from?

JJ Pellegrino

So $X million was in in from net about $XX.X – Jim, million. operations, income. Working cash total,

so it of amortization call or comp. $X.X from stock-based depreciation, So million

capital had in quarter. the exercise, And million stock to only we was working million. the $X.X $X.X option $X million generally. $X.X million Another CapEx then from

So maybe that’s the missing link for you, a nice chunk – healthy chunk exercises. of stock option

James Sidoti

last then and cash. the And question Okay. ultimately

Artegraft buyback And in the as in priority it keep to buyback. just left you that Is And deal. cash have curious, to What’s announced increasing the announced dividend? increase also some the the sure or rest XXXX? You of the generate pay I’m buyback do you from stock dividend. the stock you over down debt – to the

George LeMaitre

take here. happy that that dividend is what the meetings, and I’m would be company front cadence So quarterly always as then on out. going playing guiding you’d since next at like the of back of call, you dividend to list keeps the Board the the a I’ll feel quarterly dividends usually, if I do – are with sort the this look but it. that announce not cadence first my three at the of

like, am to that? me. a So roughly it that on that’s I I feels feels speaking, $X about like set payment. million And Jim, close it’s think aggregate J,

JJ Pellegrino

Yes.

George LeMaitre

$X million? that? shares, XX million something like

JJ Pellegrino

right. That’s Yes.

George LeMaitre

about to a So that’s million go. $X place

You a produce just produced nice we But we albeit. million heard $XX.X say million JJ in in quarter, $XX.X QX.

the a say at second, feels So on. million tremendous I June We would That’s been I’m but And to wiped already. for – acquisition. job clean a like in to focused $XX it starting done get then a had we’ve revolver being going and of that��s in J coverable.

more we’re debt for So on you Maybe color very beyond any can we’ve – back question? – been focused this J, that. on end hear, the

JJ Pellegrino

the mean, companies. be answer. and disrupt pay and I and when buying flow, priority. off buy debt dividends be, think good one be is would basis, But it that’d company what we probably the And I the will steady-state we’ll find number a Jim, the is think order pay course, cash acquisition you that of to on generate a target, then

about So we half XXXX. feel in the we good paid down debt second pretty of the

and accomplishment, into really going was that a momentum keep and that XXXX. nice try think I we’re going to

James Sidoti

authorization you up you February. of reason brought The that as I $XX have million of stock is Right. purchasing of announced it

So where that is list? on that today

George LeMaitre

Yes, that’s interesting.

the sort a the and came price repurchase for a be necessarily the right to Jim. I in unglued at drop, So back able at think that of big stock bargain, good stock event topic It’s buy now. to not us some like is housekeeping, we’d a shares world the discount. But

that’s price an talk as I could while. we And one interesting would next that And you just nice it’s interesting think the have price is, – raise be oatmeal place. obviously. time who an high for have debt? off the a we think could equity stock logical question question, could our I high, it, do stock if The But is about and ever to So that knows pay that’s you that corporate in And question. one given well.

James Sidoti

thank right, all you. Okay,

George LeMaitre

Thanks a lot, Jim.

Operator

today’s like you a for no I your and day. showing you I this time. questions concludes am gentlemen, Have great may and further thank disconnect. would that Ladies participation, at to conference. now

LeMaitre Vascular (LMAT) 28 Feb 212020 Q4 Earnings call transcript