LeMaitre Vascular(US:LMAT)2025-02-28 17:47Market Overview - The global market for peripheral vascular devices exceeds $5 billion, with the company's product market estimated at approximately $1 billion[232]. - Biologics represented 52% of the company's worldwide sales in 2024[236]. - Approximately 41% of sales in 2024 occurred outside the United States, with foreign exchange rate fluctuations decreasing reported sales by approximately $0.4 million compared to 2023[251]. Sales Performance - Net sales increased by $26.4 million, or 14%, to $219.9 million for the year ended December 31, 2024, compared to $193.5 million for 2023[259]. - Direct-to-hospital net sales accounted for 95% and 96% of total net sales for the years ended December 31, 2024 and 2023, respectively[260]. - Sales through LeMaitre Vascular for the twelve months ended December 31, 2024, were $5.0 million, up from $4.1 million for the nine months ended December 31, 2023[248]. - EMEA net sales increased by $8.9 million, or 17%, for the year ended December 31, 2024, driven by increased sales of shunts, patches, grafts, and catheters[261]. - Asia Pacific net sales increased by $3.2 million, or 27%, for the year ended December 31, 2024, primarily due to increased sales of catheters and grafts[262]. Financial Performance - Gross profit increased by $23.9 million, or 19%, to $150.9 million for the year ended December 31, 2024, with a gross margin increase of 290 basis points to 68.6%[263]. - Operating income for the year ended December 31, 2024, was $52.3 million, compared to $36.7 million in 2023[297]. - The effective income tax rate for the year ended December 31, 2024, was 22.6%, compared to 23.7% for the year ended December 31, 2023[269][270]. - The company recorded a tax provision of $12.8 million on pre-tax income of $56.9 million for the year ended December 31, 2024[268]. Expenses - Sales and marketing expenses increased by 14% to $46.7 million for the year ended December 31, 2024, driven by a 12% increase in sales representative headcount[264]. - General and administrative expenses rose by 14% to $36.3 million for the year ended December 31, 2024, primarily due to higher headcount and related expenses[265]. - Research and development expenses decreased by 8% to $15.7 million for the year ended December 31, 2024, as costs related to MDD and MDR approvals were lower compared to 2023[266]. - For the year ended December 31, 2023, sales and marketing expenses increased by 25% to $41.1 million, representing 21% of net sales, up from 20% in the prior period[282]. - General and administrative expenses rose by 11% to $31.8 million, decreasing as a percentage of sales to 16% from 18% in the prior period[283]. - Research and development expenses increased by 28% to $17.0 million, accounting for 9% of sales, up from 8% in the prior period[284]. Cash Flow and Investments - Cash and cash equivalents as of December 31, 2024, were $25.6 million, compared to $24.3 million as of December 31, 2023[291]. - Net cash provided by operating activities was $44.1 million for the year ended December 31, 2024, up from $36.8 million in 2023[301]. - Net cash used in investing activities was $200.1 million for the year ended December 31, 2024, consisting of purchases of marketable securities of $277.9 million and property and equipment of $7.0 million, offset by proceeds from the sale of marketable securities of $84.8 million[304]. - Net cash used in investing activities was $24.7 million for the year ended December 31, 2023, indicating a significant increase in investment activity in 2024[305]. - Net cash provided by financing activities was $158.1 million for the year ended December 31, 2024, consisting of proceeds from the issuance of Convertible Notes of $167.8 million, offset by dividend payments of $14.4 million[307]. Stock and Dividends - The company has authorized a stock repurchase program of up to $75.0 million, which may be suspended or discontinued at any time[290]. - Dividends declared for fiscal year 2024 totaled approximately $14.0 million, with a quarterly cash dividend of $0.16 per share[310]. Acquisitions and Business Changes - The acquisition of the Artegraft bovine graft business was for $72.5 million, with additional contingent payments of up to $17.5 million based on unit sales[244]. - In 2024, the company made the decision to wind down the PeriVu Angioscope product line, which totaled approximately $0.9 million in revenues[246]. - The company transitioned from its legacy ERP system to Microsoft Dynamics D365 in February 2024, with plans to implement it in selected European countries in 2025[249]. - The company capitalized costs of $4.7 million associated with the implementation of a new ERP system as of December 31, 2024[249]. Foreign Currency Exposure - Approximately 41% of sales in fiscal year 2024 were denominated in foreign currencies, exposing the company to foreign currency exchange rate fluctuations[320]. - The company recorded net foreign currency exchange losses of $0.1 million and $0.3 million for the years ended December 31, 2024 and 2023, respectively[321]. - The company did not enter into foreign currency forward contracts during 2024 or 2023 to mitigate foreign exchange risk[320]. Legal and Compliance - The company has not been subject to any material litigation, claims, or assessments during the years ended December 31, 2024, 2023, and 2022[315]. - The company expects to receive 23 MDR CE marks by the end of 2025, with the final deadline set for the end of 2028[243].