LeMaitre Vascular Inc (LMAT) Q2 2024 Earnings Call Highlights: Strong Growth Across Key Metrics ...

GuruFocus News
4 min read

In This Article:

  • Organic Sales Growth: 12% in Q2 2024.

  • EPS Growth: 44% in Q2 2024.

  • RestoreFlow Allografts Growth: 30% increase.

  • Bovine Patches Growth: 12% increase.

  • Shunts Growth: 22% increase.

  • APAC Sales Growth: 20% increase.

  • EMEA Sales Growth: 13% increase.

  • Americas Sales Growth: 10% increase.

  • Canada Sales Growth: 33% increase.

  • UK Sales Growth: 27% increase.

  • Gross Margin: 68.9%, up 490 basis points year over year.

  • Operating Expenses: $24.1 million, a 6% increase from Q2 2023.

  • Operating Income: $14.4 million, a 52% increase year over year.

  • Operating Margin: 26% in Q2 2024.

  • Cash and Securities: $113 million at the end of Q2 2024.

  • Cash from Operations: $9.6 million in Q2 2024.

  • Dividends Paid: $3.6 million in Q2 2024.

  • Full-Year 2024 Sales Guidance Increase: $3.8 million.

  • Full-Year EPS Guidance Increase: $0.07 per share.

  • Q3 2024 Sales Growth Guidance: 14% organically.

  • Q3 2024 Gross Margin Guidance: 68%.

  • Q3 2024 Operating Income Guidance: $12 million, up 31%.

  • Q3 2024 EPS Guidance: $0.44 per share, up 32%.

Release Date: August 01, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • LeMaitre Vascular Inc (NASDAQ:LMAT) reported a strong Q2 2024 with 12% organic sales growth and 44% EPS growth.

  • The company experienced broad-based growth across 7 of its 12 product lines, with notable increases in RestoreFlow allografts (30%), bovine patches (12%), and shunts (22%).

  • APAC was the strongest region with a 20% increase, driven by direct market conversions in Thailand and Korea.

  • The company added seven sales representatives in Q2, aiming for 155 to 160 by year-end, focusing on North America to optimize territory sizes.

  • Gross margin improved to 68.9%, up 490 basis points year-over-year, driven by productivity improvements and higher average selling prices (ASPs).

Negative Points

  • The company faces regulatory challenges in Europe, with only 14 out of 22 MDR CE marks received, and some approvals expected as late as 2025.

  • There are higher costs anticipated for RestoreFlow, which could impact future gross margins.

  • The hiring process for sales representatives remains challenging, despite broader market trends suggesting easier hiring conditions.

  • The company has not yet secured any new acquisitions, despite ongoing efforts and discussions with potential targets.

  • Pricing increases, while beneficial, may not be sustainable long-term, and the company has not yet set prices for 2025.

Q & A Highlights

Q: Can you explain the rationale behind the sales force expansion, particularly in North America, and how it might impact sales? A: George LeMaitre, CEO, explained that the expansion is due to the territories being too large, especially after the Artegraft acquisition in 2020. The company is better equipped structurally now, with area sales managers overseeing regional managers. The expansion aims to split large territories to drive increased sales. Joseph Pellegrino, CFO, added that financially, it's a good time to invest in the sales force given the strong operating income growth.

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