LeMaitre Vascular(LMAT) - 2025 Q1 - Quarterly Report

Part I. Financial Information Financial Statements LeMaitre Vascular, Inc.'s unaudited consolidated financial statements for Q1 2025 are presented, showing a 12% increase in net sales and an 11% rise in net income year-over-year Consolidated Balance Sheets As of March 31, 2025, total assets increased to $556.0 million, total liabilities decreased to $208.4 million, and total stockholders' equity grew to $347.6 million Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $25,340 | $25,610 | | Short-term marketable securities | $277,209 | $274,112 | | Total current assets | $408,113 | $402,192 | | Total assets | $556,006 | $551,817 | | Liabilities & Equity | | | | Total current liabilities | $24,745 | $30,607 | | Convertible senior notes, net | $167,984 | $167,772 | | Total liabilities | $208,434 | $214,527 | | Total stockholders' equity | $347,572 | $337,290 | Consolidated Statements of Operations For Q1 2025, LeMaitre Vascular reported a 12% increase in net sales to $59.9 million and an 11% rise in net income to $11.0 million, resulting in a diluted EPS of $0.48 Q1 2025 vs. Q1 2024 Performance (in thousands, except per share data) | Metric | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Net sales | $59,871 | $53,478 | +12.0% | | Gross profit | $41,420 | $36,665 | +13.0% | | Income from operations | $12,626 | $11,874 | +6.3% | | Net income | $11,011 | $9,887 | +11.4% | | Diluted EPS | $0.48 | $0.44 | +9.1% | - Cash dividends declared per common share increased by 25% to $0.20 in Q1 2025 from $0.16 in Q1 2024[12] Consolidated Statements of Cash Flows For Q1 2025, net cash provided by operating activities significantly increased to $9.0 million, while investing activities used $4.3 million and financing activities used $5.2 million, resulting in a net decrease in cash of $0.3 million Cash Flow Summary (in thousands) | Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $9,039 | $5,071 | | Net cash used in investing activities | ($4,320) | ($2,361) | | Net cash (used in) provided by financing activities | ($5,239) | $39 | | Net (decrease) increase in cash | ($270) | $2,326 | Notes to Unaudited Consolidated Financial Statements The notes detail accounting policies and financial statement components, covering business operations, convertible senior notes, stock-based compensation, and a subsequent event regarding new U.S. tariffs announced in April 2025 - The company operates in a single segment, developing, manufacturing, and marketing medical devices and implants for vascular surgery[23] - In December 2024, the company issued $172.5 million in 2.50% convertible senior notes due 2030, with net proceeds of approximately $167.7 million[44][45] - On April 2, 2025, the U.S. government announced new tariffs on a range of imported goods, effective June 15, 2025. The company is assessing the potential impact on its business[68][69] - The company's Board of Directors authorized a share repurchase program of up to $75.0 million on February 18, 2025, with no repurchases made to date under this program[56] Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's Q1 2025 financial performance, including a 12% increase in net sales to $59.9 million, strategic initiatives, and operational updates like MDR CE mark progress and ERP system implementation Overview LeMaitre Vascular's overview details its three-pronged growth strategy, the significant contribution of biologic products to sales, and progress in regulatory approvals and ERP system implementation - The company's three-pronged growth strategy involves a focused call point, competing in low-rivalry niche markets, and expanding the direct sales force alongside acquisitions[72] - Biologic offerings represented 52% of worldwide sales in Q1 2025[75] - As of May 1, 2025, the company has obtained 17 MDR CE marks for selling devices in the European Union and expects to hold 23 by the end of 2025[82] - A new ERP system (Microsoft Dynamics D365) was implemented in the U.S. in February 2024 and in the UK in February 2025 to improve operations[89] Results of Operations Q1 2025 net sales grew 12% to $59.9 million, gross margin improved to 69.2%, and operating expenses rose 16% to $28.8 million, primarily due to increased headcount and compensation Net Sales by Geography (in thousands) | Region | Q1 2025 | Q1 2024 | % Change | | :--- | :--- | :--- | :--- | | Americas | $38,958 | $35,245 | +11% | | Europe, Middle East and Africa | $16,959 | $14,395 | +18% | | Asia Pacific | $3,954 | $3,838 | +3% | | Total | $59,871 | $53,478 | +12% | - Gross margin increased by 60 basis points to 69.2% in Q1 2025, up from 68.6% in Q1 2024, due to manufacturing efficiencies, lower obsolescence charges, and price increases[105][106] - Sales and marketing expenses increased 22% to $14.2 million, and General and administrative expenses increased 16% to $10.5 million, primarily due to higher headcount and compensation[107][108] Liquidity and Capital Resources As of March 31, 2025, the company held $25.3 million in cash and $277.2 million in marketable securities, with $9.0 million net cash from operations, and believes its resources are sufficient for the next twelve months - As of March 31, 2025, the company had $25.3 million in cash and cash equivalents and $277.2 million in short-term marketable securities[116] Q1 2025 Cash Flow Summary (in thousands) | Activity | Amount | | :--- | :--- | | Cash from Operating Activities | $9,039 | | Cash used in Investing Activities | ($4,320) | | Cash used in Financing Activities | ($5,239) | - A quarterly cash dividend of $0.20 per share was paid in Q1 2025, totaling $4.5 million. A similar dividend was approved for Q2 2025[133] - The company believes its existing cash, investments, and future cash flows will be sufficient to fund operating expenses, capital expenditures, and convertible note payments for at least the next twelve months[124] Quantitative and Qualitative Disclosure about Market Risk The company is exposed to market risks from interest rate and foreign currency exchange rate fluctuations, with no material changes reported since the 2024 year-end report - The company is exposed to interest rate and foreign currency exchange risks. There has been no material change in this risk profile since the 2024 Form 10-K[137] Controls and Procedures Management concluded that disclosure controls and procedures were effective as of March 31, 2025, while noting ongoing changes to internal controls due to ERP system implementation - Management concluded that as of March 31, 2025, the company's disclosure controls and procedures were effective at the reasonable assurance level[140] - The phased implementation of a new ERP system, which began in February 2024, is expected to continue to cause changes to internal controls over financial reporting[141] Part II. Other Information Legal Proceedings The company is involved in routine legal matters but anticipates no material adverse effect on its financial position, results, or cash flows from current proceedings - The company states that there are no ongoing legal matters that are expected to have a material adverse effect on its financial condition or operations[144] Risk Factors This section supplements 2024 10-K risk factors, highlighting potential negative impacts from global economic conditions, tariffs, and product recalls, including a recent immaterial packaging seal issue - Adverse global economic conditions, including tariffs and trade tensions, could negatively affect the company's business and financial results[146] - In April 2025, the company voluntarily notified regulatory bodies and customers of an inadequate packaging seal on certain catheter products, which may result in a compromised sterile barrier. The financial impact is expected to be immaterial[148] Unregistered Sales of Equity Securities and Use of Proceeds The company reported no unregistered equity sales, repurchased 6,065 shares for employee tax obligations, and has a $75.0 million authorized share repurchase program with no purchases made to date - In Q1 2025, the company repurchased 6,065 shares to cover employee taxes on vested equity awards[150] - A $75.0 million share repurchase program was authorized on February 18, 2025, and remains fully available as no shares have been repurchased under it to date[150] Other Information Chairman and CEO George W. LeMaitre adopted a Rule 10b5-1 trading plan on March 10, 2025, for the potential sale of up to 250,000 shares of common stock through March 10, 2027 - Chairman and CEO George W. LeMaitre adopted a Rule 10b5-1 trading plan on March 10, 2025, for the sale of up to 250,000 shares of common stock through March 10, 2027[151] Exhibits This section lists the exhibits filed with the Form 10-Q, including CEO and CFO certifications and Inline XBRL data files