LMAT - Earnings call transcript Q4 2021

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Operator

Welcome to the LeMaitre Vascular Q4 2021 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

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

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

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

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

George LeMaitre

NXX X% I’ll XenoSure million cover were production while XenoSure Artegraft QX led months. elective deferred implemented including XX% finally, safety QX sales associated down employees result, Artegraft as records virus our QX, to shortages, and XXX today’s to and topics, sales. the the sales sales surgeries. as X%. call free were and growth, up sales booster our grew sales and year-over-year impact XX% was hospitals employees We contracted believe measures, and from X% of masks three About straight about in in and we also of APAC Sales And staffing January At JJ. XX% Thanks million decreased meetings count home, in Omicron posted X% $X.X And last Omicron, were Europe, are a we LeMaitre growth. on kickoff work year, the Americas, second in up $XX.X and personnel. and sales sales, will including free additional test, head our virtual. in On fully campus rapid our three bonuses. QX offer for soon the booster continued of clinics. $XXX vaccinated a reps

watermark coming high a with most at production. currently We’re of of and sales increases XXX employees in the

combat and and we payroll is we manufacturing, also We a facilities. XXX orders Internationally, today continue recommit in another to to supply any and grow ten XXX footprint we water labor sales issues. chain will high no continue potential our reps have Today is back HX. to our be adding mark. on as hire direct In likely employees

will and and allograft us our to a with be China, office expect Korea direct country England largest QX distribution follow install and in enable the facility ensure our third warehouse products Notably, The Japan, Korea XXXX, facilities Singapore, and to second timely delivery. market in adequate Harford, most our product New In in other XenoSure our Korea QX. expanded cryo country England our UK tissue allografts. in supply approval. approval sell as open to of an Australia, we hiring Malaysia our Italy, Zealand, received office a recent XXXX. Japan, in bank we freezer and for we also UK This join and was sole the APAC. With seventh XXXX. in in XXXX will Korean in will in manager, to market

the U.S. the posted UK margin increased $XX a end Canada. should QX XX% head challenges, of of Omicron and with op to we and soon. hospitals count begin deliveries year and Despite million Joining cash.

also LeMaitre’s profitability on the increased cash generation. our straight XXth focus and We year dividend underscoring for

we turn to for cash distributor and use acquisitions, this over you’ve As call JJ. I’ll buyouts. the dividends, like seen, to now

JJ Pellegrino

Thanks George.

XX%, Before and as a XX%. the XXXX and sales. year full The Artegraft few quarter, XenoSure I revenues versus $XXX.X Sales were words year. Americas APAC I’ll million by about discuss a driven were Increases as increased well say last valvulotome in XXXX. XX% up X%, of grew Europe

bottom income grew expense by the operating income sales XX% outpaced XXXX line, On both net growth. growth operating in and as

favorable income XXXX. as QX driven initiatives a a production in in decrease offering. QX our transfers. important completion was period price basis The well simplifications The operating secondary accounting charges over decrease was mark. With margin, Europe number QX stock XXXX results, million, QX improved and our reps by the gross reps the our on our XX of operating reduce reinvest increased XX regard product A sales sales of of direct sales about CE was continue restoration Artegraft have as as rates as overhead to increase gross mix new completed our to and XX% $X.X employees. of manufacturing, increase increasing we marks in we XXXX. XX.X%. of the XXXX. also regulatory expenses, size and was progress purchase order We and point hired to versus margin recently to our the by Hiring in XXXX, CE selling manufacturing particularly In driven transitions including labor, labor average therefore and spend, increases XX various QX a MDR team our increase offering

annual evaluate gross product XXXX, our in note incurred an costs it significant our rationalizing is that basis, we margin we important portfolio. on As to

and and shutting underperforming outside In in write-offs in product fact, inventory million of contributed XX% terminations product we line to small by our reduced SKUs the year lines. for down XXXX. $X.X These began the

quarters. more should margin XXXX. in of both to on non-cash our We and $X.X QX $XXX,XXX, canceled option resulted a at and November and XX, COVID loan the of these the summer, This debt charge November million the but below approximately partners and in acquisition. like million the last two in crisis, in driven a ended during no lending million We issues initial facilitated we increase reduced XXXX with us to coming $XX.X our annual versus gross manufacturing one-time After the term and of stock in completing overtime $X.X The increased by line of who’s – was cost QX XXXX. Additionally million $XX $XXX,XXX agreements. the QX our XenoSure KeyBanc loan $XX And payoff QX freight from revolver investments. EBITDA eliminated cash cash charges Artegraft million XXXX abate exercises. thank in

Turning to guidance.

million million, which $XX.X the X% increase to midpoint We expect XXXX QX at represents versus QX XXXX of organically. sales $XX.X an and of XX%

represents at also of to of $X.X We which midpoint. million, a operating X% decrease million $X.X the income expect

of per Our per share. was in EPS of share. guidance share EPS also $X.XX QX earlier XXXX $X.XX midpoint the share per quarter of $X.XX to year $X.XX implies a

X% For the $XXX of the of X% XXXX, which full an XXXX year versus million, we expect at represents organically. and $XXX million midpoint sales increase to

X% million We increase which operating at $XX.X an to $XX.X also income million, the of expect midpoint. of represents

back represents increase $X.XX $X.XX per Our over XX% With Vanessa a share at XXXX of guidance questions. EPS to to an of turn midpoint. that, the a for it I’ll

Operator

[Operator Instructions] you. Thank

George LeMaitre

think question Do there? and it ask you that George. Vanessa there’s a seems It what out time a should like is we let do question? a we’re trying someone for to queue Is it’s here?

Operator

Street. question we our from with It Brooks first looks Lake O’Neil have like

Brooks O’Neil

a questions, have I the couple guys. them. afternoon Good ask I and opportunity to appreciate

my anticipate notes playbook to something and challenges So execution to first, I your fundamental playbook, changes of you forward? the given that you would against some all in world, I the in the any LeMaitre probably LeMaitre called the going read referred uncertainties

George LeMaitre

don’t to Brooks, first It’s no, nice playbook. all, to think George. question, our answer change Short you to we’re to going again. your of I talk

Brooks O’Neil

Great.

Secondly, I’m curious.

David marketplace told the think Artegraft me you on you this increase year. on guys increase? I the earlier, Could later or in comment took reaction another either price price that earlier to XXXX or that

George LeMaitre

January, when reaction was Sure. to the than and increase was before increase XX% have it smaller seems been It an a the year fine. just Brooks, was in It XX%. price

Brooks O’Neil

Yes.

to the versus I one appreciate say you I’m for at XX curious program Board by announced would environment you again. look as or question the guys highest stock, it generate? And try just close. you and I the continue and acquisition opportunity you ROIC will out then the drive particular the a I one repurchase fairly after opportunity And your last think Okay. and to you opportunistic share preference or the million to be the noticed, can David other, have

Dave Roberts

Brooks it’s Dave, good question.

hunt at as repurchase execute. looking good ROIC. as price, We’re I But it’s share them right always to housekeeping, we basically good we’ll gets would in so program size a appropriate acquisitions, meantime the the of know, authorized. found you spearhead slightly the have governance drive the it we mean, we’re and I find And acquisitions the always bigger, authorization. looking I on to say, increase good company to for the when

Brooks O’Neil

Thanks again, the all lot Makes work. great a Yep. sense. up keep

Dave Roberts

Thanks, Brooks.

Operator

Thank you.

Henry have Capital. Scott We our next from with question Roth

Scott Henry

couple a And questions. Thank afternoon, good you. just

the First, non-biologics versus biologics in breakout quarter? could you

Dave Roberts

they Biologics, Sure. of here, were Dave were Scott XX%. up sales and its XX%

Scott Henry

Great. in valvulotomes, they And then were comment on quarter? the could you how

George LeMaitre

percentage quarter growers. the and big we growers this Xeno. scratching had top three The that. valvulotomes you is George. call what We’ll if to three the find back I the had I’m good was growth it get was, but know one valvulotomes Sure. a for Scott, quarter. the We in Artegraft, of during

Okay.

Scott Henry

the spending or think, about of than a bit? Final question continuing think in you as Okay. line off might do appreciate or trend we that. levels I I should were little is trend. kind quarter, you that pull a higher Would spending little think a –

JJ Pellegrino

Yes, higher we’re of folks we’re business and topics seasonal in well. that, Yes, QX bounce of piece, reps the of is a as or and sort COVID It’s so. from areas well, a hiring a but do and a by sort the this Scott. to there’s JJ. hiring continue little back good than of half we’ll that question. sales other of Thanks, the last year And rebuild and as trend, QX

So expect quarters higher on. sort then a of levels as tapers the to and move off and see of QX might sort you around QX

been over expenses year. guys. would cost a move has a it say, know, we’ve the we keep trend close of throughout you sort op we’ll hallmark that’s the the I eye outlined on containment time of So, company you that as and for But yes,

Scott Henry

an follow see we’re I as lower higher R&D on, about? focus going anything mentioned, there or should and like is trial side, Okay. seasonally, noise, of in be up just of if going thinking just or, you that on could And R&D the on maybe to more specific be to kind quarters outlier QX, with some seemed I little a specifically that is which a

George LeMaitre

Right. Scott.

I continued think seeing what that our I you’re is inside CE marks. number what think the around expenses exceptional

by XXXX has to money CE call So XXXX. forward, need varsity CE And we a were but which that regulatory. and It of expensive is marks the repeated in going I stuff. quarter particularly towards of get the MDD level spending kicking trying get you R&D marks Not going succeeded, single to now we and the a the on would MDR quarter that there. CE these begun days every European marks, was necessarily the of that all lot sort

Scott Henry

questions. Okay, the you taking for great. Thank

George LeMaitre

Scott. Thanks a lot,

Operator

our Instructions] [Operator from Jefferies. you. Thank we Zachary question Weiner have with next And

Zachary Weiner

thanks Couple Hey the taking from question. for guys, me.

it’ll expected color long product on the First – new take and reps. you can on how reps, some give

well? I come are up a and those half, to I first them think have speed? couple it seasoned the get take relatively reps to mentioned Are or long they XX as new reps how follow-ups you in

George LeMaitre

Okay.

would it great and a sorry. never some questions give running we asked I feels So rep up in reps like answer, it going. get say maybe, always that and is We unsatisfactory Maybe, George, and months. they’re lots of Zach, really in question. three this there. if always get a And Zach, get

and they’re me. that nine The And last sort that is five so XX% would okay maybe or something rate three They to forever. folks. if months, I year six to like a indicate feels could turnover don’t number call it of, like

to you talking it and for work up U.S. the got reps, I’ll you looking that when on to So, you’re get running we’re pretty of to these company. them give And put quickly then the model. about, make model each quotas the

in the every I asking something to in in think changes for year. everyone’s like it year, and we’re $XXX,XXX but for addition following, asking single every $XX,XXX we’re GP roughly, year plan

them something that be GP model So you’re would by to business that like the every trying year. to get much grow

Zachary Weiner

company. the high that reps then to back in within And color terms of getting any watermark on,

I members was correct maybe I high XXX. think my think the XXX, watermark pre-COVID

So any color there?

George LeMaitre

Okay.

it’s high is XXX or for XXX but our apologies actually watermark. Zach’s So you, correcting

we when I watermark, we you, at not watermark. we’ll from but least be time high two you, talk hope times are if right talk high to to past and at next So, the we’ll there the we’ll be now, the

Zachary Weiner

to you Understood. there M&A No, the the with Artegraft and but of company? look gears to here I focus any M&A, still a in areas Shifting appreciate I is the one know the just business biologic that the correction. with there of success previous asked more bolstered is of space the questions,

Dave Roberts

mean, Yes, for It’s has we obviously Dave. Zach. I done is the that biologics us. good have This portfolio acquired well a question. quite

but main little of I markets, products also. in started vascular to a would we’re for the and cardiac looking we’ve look and there ground we’ve at some surgery, access open for that’s some continue the us, example, dialysis sort at certainly at bit hunting we expand there. surgery So, level, say higher hunting to looked a space adjacent biologic

or think open or and So, used of would $XX have in ideal. be is I theme hospitals revenue would million more so, say preferably I surgery to low targets markets revenue, the with need rivalry niche,

Zachary Weiner

Thanks helpful. first gotten last one could to COVID, the of Got first more insight weeks been, for the just and of in guess, things and XXXX. here. questions one you’ve as sneak on appreciate I if has just give in through through going are And taking access, portion a of together. access Pre-COVID COVID the it. then That’s it. the can contention how XQ I then, a you the rep little quarter, here We access last the couple point

George LeMaitre

the of it’s and a access. volumes great it Maybe And I that’s hospitals. minds. lot conspired for by a feelings Okay, of procedure was more different slightly Zach, than rep period. a two then word sure Maybe question. by rather driven answer even I’m you’re that sure JJ roughly it sledding but omicron, spot. the on that using things elective hospitals. shortages we five I’m of this Those that’s Friday down sales something to it manner, course just And people’s in in then staffing was week our week like the surgeries And so. Dave what December, driven go USA from report opening in of and what XX% seems well, calls that. least was very much other get the our very things companies from tough get, it like think happy but very January seems I’m I to the U.S. I is and at reps at the and as we’re up sales month It full are much And our revenues. much And again. in last hearing

the of don’t I In terms month I very a right how, And feels now. of of month. February full the Omicron kind February, know of open rest or know don’t feels I where the where but like crisis it grows normal goes, know

Zachary Weiner

it. Appreciate question the taking for guys. Thanks Helpful.

George LeMaitre

Thank you.

Operator

have with Capital. And Fonseca our we Javier Spartan next question from

Javier Fonseca

Quick thanks force. as with my clear on to again. taking call. the get to, you question as far sales for more to Hi, speak Good

as call end this call want you of the is, management’s cloud sales more of My earnings for want, this watermark that you mentioned question the year? sales of the you high by the provide in as, how end So force of far year any XXX of previously for of to people the much and or, how your to more many on can XXXX previous number expectation reps year add is what reps. the

George LeMaitre

if XXX you trying hard to forces, land we’re certain lot. a to voice leave something is like XXX, feels lot feels or on sales decide. there’s at though, like between thing again, I’m something it turnover like XXX thanks this at desk have George. always and not at that’s to calls. It just this decide and it’s hear people something these that. on launched your like, A my It’s the moment, these times. It to to of right, exciting company’s Javier Again, so in you Sure. glad

something So, short question that. your answer would XXX, say XXX, like to I

Javier Fonseca

you to like specific that do any plans to And have drivers number? to get or how Okay. say,

George LeMaitre

Yes. I get on we’ll call another today mean, much we think hired Very mentioned XX the in HX. so. we that

So sort XXX get down. and XX you could breaking to also XXX that add plus of

We don’t signed four now have that that, work are right reps that yet. here

So have on. where that’s XXX, and signed, we then requisitions there XX rep out hasn’t more coming the they’re

out I’d we’ve about aggressive territories year So, chasing we XX say it’s, this built that. to very, happening. U.S., the and in USA particularly very And our in plan, we’re we’re been

that We’re trying happen. make to

dimes profit try to focus to of have a that’s of to We have is as been to nickels watch areas force. the sales around but well. build one We company our the and here back here,

Javier Fonseca

you Awesome. so Thank much.

George LeMaitre

Thanks Javier. a lot

Operator

question-and-answer And thank And to by conference. participation that questions. for you. great further thank you, and now a day. concludes thank you I’m our ladies like may today’s gentlemen, disconnect. for And that standing Have you and session. your would concludes I

LeMaitre Vascular (LMAT) 25 Feb 222021 Q4 Earnings call transcript