LeMaitre Vascular(US:LMAT)2023-05-03 02:10Financial Data and Key Metrics Changes - Q1 2023 sales were $47.1 million, an increase of 19% on a reported basis and 22% organically compared to Q1 2022 [16] - Gross margin for Q1 2023 was 65.6%, flat compared to the prior year, with guidance for a full-year gross margin of 65% [16][17] - Operating income for Q1 2023 was $7.9 million, reflecting an operating margin of 17% [18] - Operating expenses increased by 28% in Q1 compared to the prior year, primarily due to higher selling commissions and increased headcount [18][19] - The company expects EPS growth excluding special charges of 17% for the full year [19] Business Line Data and Key Metrics Changes - Valvulotomes sales increased by 29%, carotid patches by 17%, bovine grafts by 22%, allografts by 42%, and carotid shunts by 18% [3] - The addition of the Aziyo product line is expected to decrease gross margin by about 0.5% [17][20] - The company anticipates $3.5 million to $4 million in sales from the Aziyo distribution agreement for the year [27] Market Data and Key Metrics Changes - Sales in the Americas increased by 21%, EMEA by 17%, and APAC by 6% [3] - The company reported a 14% increase in credit card swipes in U.S. hospitals, indicating a strong recovery in procedure volumes [25] Company Strategy and Development Direction - The company is expanding its presence in Asia Pacific, with a new office in Seoul and plans to sell directly to Thai hospitals [5] - The company aims to end the year with 135 to 140 sales representatives, up from 128 [4][35] - The management is focused on leveraging the larger sales force and addressing supply chain disruptions to improve operational efficiency [17][36] Management Comments on Operating Environment and Future Outlook - Management noted that the growth was driven by an improving macro environment and increased procedure volumes as hospitals return to pre-COVID staffing levels [10] - The company expects some normalization in hospital procedure volumes over time, which may moderate sales growth [27] - Management expressed confidence in the pricing power and ability to implement price increases without significant pushback from customers [70] Other Important Information - Regulatory costs increased by 47% in Q1 as the company continues to work on obtaining MDR CE marks [19] - The company reported cash flow from operations of $2.28 million for the quarter [83] Q&A Session Summary Question: What were the key drivers of sales performance in the Americas and EMEA? - Management highlighted a significant increase in hospital activity, with a 14% rise in credit card swipes in U.S. hospitals, indicating strong procedural recovery [25] Question: How does the company expect pricing and volume trends to evolve? - Management indicated that while pricing may not sustain a 13% increase every quarter, they expect continued robust pricing and some normalization in procedure volumes [27] Question: Can you quantify the impact of Omniflow backorders on Q1 performance? - Management reported a reduction in Omniflow backorders from $800,000 at the beginning of the year to $400,000 by the end of Q1, indicating improvement [29] Question: What is the outlook for the Aziyo product line? - The company expects to generate $800,000 in sales from the Aziyo product line in Q2 and $3.8 million for the full year, with a 50% gross margin [14][57] Question: How does the company view pricing power in the current environment? - Management noted minimal pushback on recent price increases, attributing this to supply chain dynamics and inflationary pressures in the market [70]