Earnings call transcript Q2 2023

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Operator

Welcome to the LeMaitre Vascular Q2 2023 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. J.J. Pellegrino, Chief Financial Officer of LeMaitre Vascular. sir. ahead, go Please

Joseph Pellegrino

George Good QX thank me XXXX our be our call operator. well not us will and on for on is not CEO, Roberts; Dave our Conference the President, he afternoon you, is you feeling call. and on joining today’s LeMaitre, Thank Call. With

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

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

and discuss call growth is measures, special contained in income, this non-GAAP available we include our associated organic reconciliation the which is of release website, sales in section A charges. of call, this expense and During measures www.lemaitre.com. non-GAAP as in discussed will operating as Investor excluding well financial operating EPS, GAAP Relations press to the

to Roberts. the turn over I’ll Dave call now

David Roberts

to a was million. XX% on and a Thanks, basis spread geographies. J.J. XX% products Growth reported grew $XX.X QX organically and record across all sales

XX%; XX%; XX%. were Bovine led products up three bovine valvulotomes, way. XX%; and EMEA was and By allografts, the Our Americas, APAC, All XX%; record. regions XX%; shunts, XX%. X patches set up carotid XX%; geography, largest the grafts,

and demonstrated intervention to increase this from the as a results of valvulotome strong ASP to valvulotomes growth. unit COVID helped in vein the X% diminished, Also, two our be ischemia. blended the remained QX. drive This for have BEST-CLI macro as Hospital superiority for contributing fears Indeed procedure bypass trial continued volumes have were X% surgical tailwinds benefit trial We quarter. responsible growth. in the product first treatment limb most critical line over endovascular may

In with reps year top-line We the our XXXX ago. a XXX XXXX now be opened the year We will drive timed months, also sales sales in expect ended Including surge countries well Three XX XX% to to XX than quarter just reps. to our plan seems should globally. a more We and in hospitals sales sell Regulatory direct office. have In approvals end in countries Thailand. those Bangkok, growth. million. XXX reps, $X.X we retrospect, we with the Thai of offices international record support rep to next of sales our growth. XXX XX

new XenoSure carotid growth The recently have approval and drove the we indication indication have XenoSure carotid potential. a may ephemeral now with Japan, In indication X last for begun. of Approval there for received with sales similar years.

cardiac approval allograft expect receive to Germany in in expect either and peripheral or XXXX. to XXXX. approval Europe, XenoSure we in China, we In approval receive our in Ireland In XXXX

we file December. Europe, approval in of this CE Finally, also artegraft expect to for

to it turn over With J.J. I’ll that,

Joseph Pellegrino

Thanks, Dave.

million. both sales distributed and increases valvulotomes on porcine well by by driven $X.X also up In of sales. Price as selling quarter, increases Let XXXX, elevated, the Biologics increasing including me ASPs up X%. start color artegraft, remained price QX drove in X%. providing newly shunts average XX%, patch some sales up additional with as were XX%

XX%. Excluding porcine sales, grew biologic devices

sales For million by to represents organic million, $XXX.X $X.X growth. XX% guidance increased our which the XXXX, year full we have

XX%, down well of including In as gross QX unfavorable direct newly as XXXX, inefficiencies selling the the by increases product X% we prior margin. XX% porcine offset labor year average distributed as were period versus sales a margin at gross mix, price a posted patch

through to and are back we of see half move respectively. year, QX labor and gross of efficiency improved expect As the some and XXXX XX.X% XX.X%, the guiding we margins QX

XX% selling special quotas. happy XXXX operating in to the sales year. surpassed pay we Excluding due items, expenses versus are prior was increased the to QX which of when increase higher Much commissions,

to the In obtain working in prior reps as quarter the continued managers XX% team X and more was were continue operating higher X% sales sales we with operating $X.X our addition, of and more margin increase over an charges. invest sales the and our an reflects up we XX by excluding XXXX, year, versus mark. year. ended XX%, In MDR to income million and of sales costs special Regulatory prior QX CE driven largely of

QX. an in with expected and Bottom improved should growth, QX in XX% sales line operating in in slightly accelerate charges bottom line results XX% X% by year-over-year income to have X% QX, margin. begun HX improvements gross be excluding driven of a and strong QX and special

year expect operating margin XX%. an of full XXXX, the For we

was $X.X option Cash an from $X.X the million, XXXX. of and million million. by million $XX.X dividends proceeds QX driven at $XX.X offset increase The end of exercise operations $X.X versus of cash partially stock by of million, increase was QX XXXX of

and special today’s year. full sales in in QX, XX% full XX% reported outlook QX, of guidance, full growth, charges the in sales our in year; growth reported organic growth few press For and year; XX% QX QX, issued QX, the the excluding full in and in QX include: in XX% please the XX% XX% a of But and highlights XX% release. in EPS XX% business of in year; XX% of growth non-GAAP EPS see in in XX%

sales operating growth and full year, XX% op growth, For an we report organic expect XX% the XXs adjusted XX% income are and margin. wild to

I’ll back for questions. to With it turn that, over operator the

Operator

first Mishan question Instructions] from line comes you. Thank [Operator Matthew of Our will At KeyBanc. conduct time, session. the this we the question-and-answer with

open. Your line is

Brett Fishbin

Brett for It’s Matt. questions. much guys, Fishbin the Hey, for today on so thanks taking

start could revenue you or long-term? the carotid just may touch to changes during you TCARs quarter to how proposed LeMaitre’s open there over carotid wanted were for procedures. that impact not may Just curious procedures volumes procedural think endarterectomy the change on reimbursement if some off to and I’m exposure

David Roberts

It’s Yeah. to LeMaitre’s be I Dave. carotid procedures, unclear. say, through expect around our if procedure maybe with are CMS Hey, the is a carotid could of used conjunction to would How impacted shunts in on based XX% most endarterectomy, biologic when Brett. it I which affected? sales. of the that it’s the will greatly. reaction, like exposure the is but extent Certainly, and patches, be proposal, you and would for carotid take course, sometimes TCAR it feels the impact go probably eventually happens, it market of shunts

down terms can’t do been the cut endarterectomy, do in the for it, of course, the But gold procedure. decades. they standard can’t is, they carotid It it’s still interventionalists, in of

will So the how retreat see vascular over it and out little a bit surgeons probably time. to plays endarterectomy, carotid we’ll

Brett Fishbin

versus much which I nitpick one very color. revenue would quarter. trends guidance, the turning be gross for environment. Thanks margin, definitely came go And area encouraging a the to just then are positive bit to [ph] last I capturing and guess potentially right. a All little really the down think, the

there you confidence the improves and inefficiencies into Thanks a bit gives half what a if what you a of of little provide curious really could some little very like were second the that changed bit step more around much. seeing on up? in Just incrementally

Joseph Pellegrino

the is that No, Yeah. nitpick. area to

the sort than say for the think better for And the I on time. lower And, working think manufacturing. gross carry porcine I got that than is that we result, distribution thought. I some I expected And half you those think, right. about side, I’d patch quarter, think, mix most XX% did mix for would probably the the the is say and piece been we’ve Aziyo recent of margin. answer half on I

product So so very the also did the brought and that margin than that the that lower margin. hurt well, corporate allograft as margin the quarter and RestoreFlow, carries in gross a down. well line

very which export was piece, to well. there then out, third And call our sales a is did maybe

of the geographies maybe carry $X.X than sales million to not those where year-over-year. those so, we’re or sales direct, gross corporate selling quarter, I sort think up were in So strong margins. And lower generally quite

mix piece. the that’s So

from think saying effectively two the one, doing a respects: to training utilized while be efficient a then gets last then we’ve labor is, hired quarters embarrassing to a after so. level their hard I’ll and folks. for or in-house them half, topics I’ve on we’ve and so seats they’re direct a high trouble those to two really manufacturing a this been answer and been the two working in work. be efficient while, And – be but over them quarter We it and in standpoint, say, had And pretty I while, we’ve of got bunch I’m up

haven’t through the can And like feel I that gotten coming see through nice I to P&L some yet. answers

it the answer next timeframe. by so I next two come by maybe for story And we it the yet. XX.X% driven I will so didn’t We improve into the of little going that QX through a or dramatically think, P&L the quarters, And high margin couple bit. level improve over But, from to that. forward to the that’s as XX% be think largely why look the hasn’t quarters, might

Brett Fishbin

Congrats much right. I appreciate so All it. Thanks for quarter. call. the on the

Joseph Pellegrino

much. very Thanks

Operator

Capital. from the Wukmir Aaron line Our Street Instructions] [Operator comes question Lake of with next

open. is line Your

Aaron Wukmir

Yeah, afternoon, Wukmir everyone. Brooks. is on Congrats this Aaron for Good print. line the on the

couple a Just things.

the pushback pricing the in to half And a the And So taken lot of think prices you you’ve on year? raise actions expect again this do you’ll have take you pricing gotten year? you do more far? so second of

David Roberts

all else. then increases I get much Hi, lines. we in little not across Good few also prepared we getting really different your the been know specifically artegraft. in that have are been Have spread the the Europe remarks, pushback? devices bit differentiated most, the but bit, product as shunts in voice. able a you to the and market hear carotid Aaron. mentioned, would Dave. just little It’s get a Probably highly anywhere price can’t so gotten to These we’ve a valvulotomes, but

as have the yeah, well of the advance it support so, increases, of as with in to there that just XXXX expanded of overall to price we the growth in we And have increases, increase. these it’s sales unit And XXXX. in that. some sort large organization important we’re price of And a fortunate price course

the No. a As to in at We the price your half increase of year. the the beginning in increases put the put we back will price question, of year?

one not we’re another expecting So till X. January

Joseph Pellegrino

would to one. a is also that favorable story add the unit I

from grew X% QX, XX% As QX, to in in you so QX or think so or go I QX. units

say easily. and, it, not It comes the But answer favorable. been has of has would fact, think have I watch the reported gone statistic always But piece that and and so is hikes, through surprisingly you ASPs sales And smoothly. any presented we’ll to to that folks issues around story our not those the in big have back fact time. I between that been us over not price the quickly problematic because

Aaron Wukmir

Great. And quick follow Yeah. helpful. a then on. Very just

sort contribute half? product specific the So trends line we’re you one sustainable? do do of you seeing to think be the Or will into second currently expect disproportionately that

Joseph Pellegrino

As Dave said, like QX feel as I was it it QX, really well. in broad wasn’t based

continuing makes And One it talked driving expect the hospital folks of well. been or [ph] lines sort you patches topics RestoreFlow by be that’s procedures. hospital shunts, them Certainly, that. topic, X hikes are across getting level by sales. be higher have nice driven Procedures put as lead of may That price to out with Dave I context becoming so, in is now procedures, to more but hike of may be sense and sort about. the number artegraft the there’s continue the valvulotomes COVID product and into strong really back X with that product comfortable that to do way, price piece driven seen then lines, calling we’re the do a and staffing and and if

So that sort year on. goes as of the use

and it, become year-over-year. that, a We level reps the lot starting X-month-ish, productive. of over high beyond hired those a at up we’re XX they’re then last reps to call And

of bag the sell have And folks so expect and doing to they even a we little sort been more maybe bit broadly efficiently. would those as

So we’ll see.

Aaron Wukmir

Awesome. Very helpful. Congrats again.

Joseph Pellegrino

you. Thank

Operator

from comes with Petusky next Research. line Michael Instructions] [Operator Barrington of question Our

line is Your open.

Michael Petusky

guys. I evening, good few Hey, A guess. questions,

a they sort of I’m the sort basis often XXX this up in one but I that, mean, working seeing you sort be comes So, I gross group on that guess guys companies pedaling a issue, Nothing hard about of are where that of margin – you’ve we in for – like thinking like comp J.J., of were XXXX, mean Nothing sudden of you I that they really and of of year-over-year guys of happened. the ducks was And all for know a all I here? of sudden shows sort below happening. surface. up the this then points all half of was putting sort could together? while, possible improvements. XXXX, like mean, been is sort second I of this something somewhere [ph],

David Roberts

question, at I’ve find significant be balance get get the been you’ll and to And think improvement labor to, is it, then to improvement. Mike. I get great direct some at think there its I point, through P&L, want now, as topic there’d some makes the point a That’s the alluding to the you Sure. a do right? but important and actually like that you I’d you a wrong that But do in sheet to some place for while was earlier question. to way

signaling February, some obviously guidance year. should conceptually, for year. knows? next not be point. I this you Who there and, But We’re for give that We’ll guess, some at obviously, improvement, in

piece you is working One Burlington to CardioCel, still do pretty transferred pieces. facility. we through other and and when two first, we’re know, they’re as to you other our that. And it, I transfers, The at guess inefficient important Mike, maybe Omniflow

get were XX] in And from did hard working something grand out to order, [ph] or like [XXX the Omniflow we QX. back that, so went it of we to

And working same great. of with answer that’s efficiency we Yeah. so CardioCel. largely And out the we that’s are there. on got still that, But

then third be is a quality you, that costs. for Mike, And piece would mover the needle

So of of sales, were sort they they’re in X% back now day, the X% of sales. sort of

sales gross to And, from quality and So let just and around answers think, spent there. and money we’ll time, we resources sort there’s are those some quality, get those a maybe your costs. over up in X% that we tackle grow invested of X% that or margin hired, improvement quality good we’ve I

So, those I pieces. would the be three think,

Michael Petusky

All Okay. and you given have if ask before question, I that it already. stock right. catch you do while J.J., didn’t got I’ve a Dave comp? I you’ve CapEx

Joseph Pellegrino

I You do. know

So for CapEx X.XX stock-based X.XXX comp. for and

Michael Petusky

million was $XX.X for cash you from And flow quarter? ops said for the

Joseph Pellegrino

Yeah, that’s right.

Michael Petusky

Okay. Awesome.

update you So, Dave, discussions? environment, around like can there? share. I out any the you’re valuations M&A What guess of just look Anything what of sort seeing pipeline

David Roberts

about playing keeps of pile hunting. vascular out Yeah. sandbox my open so targets we’ve with Well, than obviously, XX in and and were XX of or I $X our more the space the and cash growing, been team revenue, There in. are million sort that’s that

are with so And a in it’s also since bit of things, sort bunch whole the we adjacent pool time, scheme we’re of at in little these over spaces. say, conversations limited looking a of would a I

surgery, today. surgery, revenue that the peripheral porcine now spaces in. So maybe endovascular. quickly. smaller the patches cardiac sort because, get adjacent cardiac growing not like We add from cardiac market of of It’s like are vascular, open it’s our XX% actually Mike, surgery, about as we you

have seem recently. bit So stabilized little we’re a to there hunting valuations

hunting. I we’re we’ve And balance do to trigger So regret than for is also pull XX that but cash a acquisitions the to one and aware known, we’re say the pitch. wait good we’re better our done it’s would because waiting and it. We’ve growing,

Michael Petusky

adding back – sales or? say I right? you just I’m in the X Did this you one in would first unclear in you more, $X.X XX made – really or you your adding months, folks part, wanted but to in Thailand. That prepared in be yet, sales about And did half the I million you remarks. And this hear think, that clarify you’ve haven’t I were expected

David Roberts

actually couple three staff sales months. basically. XX X.X, third. be full and Yeah, the Thai we a we’re So, on and it’ll days now. yeah, reps in first ago, We the two opened the of right adding have year. a And the Yeah, of so first it’s office

Michael Petusky

Very good. right. All guys. Thanks,

David Roberts

Thanks, Mike.

Operator

you thank a day. would I now today’s and great you that like concludes and Have participation Ladies disconnect. conference. your gentlemen to may for

LeMaitre Vascular (LMAT) 1 Aug 232023 Q2 Earnings call transcript