LeMaitre Vascular(US:LMAT)2021-07-31 18:42Financial Data and Key Metrics Changes - The company reported record Q2 sales of $40.7 million, representing a 64% increase compared to Q2 2020, with sales growth of 83% in the Americas, 36% in EMEA, and 30% in APAC [7] - Gross margin for Q2 2021 was 65.8%, a decrease of 2.7% year-over-year, attributed to product mix changes, manufacturing inefficiencies, and inventory write-downs [9] - Operating income was $11.1 million in Q2 2021, with an operating margin of 27% [10] - EBITDA for Q2 2021 was $13.3 million, up 108% year-over-year [10] - The company ended Q2 2021 with $23 million in debt and $21.8 million in cash and investments [10] - Full-year 2021 sales guidance is set at $154.1 to $158.1 million, indicating a 21% increase at the midpoint compared to 2020 [12] Business Line Data and Key Metrics Changes - Artegraft sales reached $6.7 million in Q2, contributing significantly to overall sales growth [8] - The company is expanding its product offerings, with notable sales from valvulotomes, carotid shunts, carotid patches, and allografts [8] Market Data and Key Metrics Changes - APAC market saw a boost from $250,000 in Japanese XenoSure sales, with expectations to submit trial results to the Chinese FDA by October [8] - The company plans to ship from warehouses to hospitals in 8 of its 9 largest markets by October [8] Company Strategy and Development Direction - The company is focused on rebuilding its sales force, aiming to return to a pre-COVID high of 112 sales reps, currently at 88 [8] - Expansion of warehouses in England, Italy, and Japan is underway to enhance customer connections and order fulfillment speed [8] - The management is considering larger acquisition targets, particularly in disposables and implantables used by vascular surgeons, while remaining open to branching into endovascular or cardiac surgery [20] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding Q3, noting the potential impact of COVID-19 and seasonal trends on sales [16][18] - The company is experiencing a backlog of procedures that were delayed due to the pandemic, which contributed to strong Q2 performance [16] - There are concerns about the Delta variant affecting elective surgeries, particularly in the Southeast U.S. [24] Other Important Information - The company has paid down $42 million of debt since the Artegraft acquisition and recently retired the remaining $23 million with proceeds from a stock offering [11] - The management highlighted the importance of maintaining a clean balance sheet to attract potential sellers for acquisitions [20] Q&A Session Summary Question: Trends and momentum for Q3 - Management noted strong Q2 performance but expressed caution about Q3 due to potential seasonal slowdowns and COVID impacts [16] Question: Impact of hiring on manufacturing efficiencies - Management indicated that rehiring manufacturing personnel should improve efficiencies and margins in the coming quarters [18] Question: M&A pipeline and potential targets - The company is pursuing various acquisition targets, with a focus on larger opportunities in the vascular market [20] Question: Sales expectations for Q4 compared to Q2 - Management explained that Q2 was unique due to backlog recovery, and they are cautious about Q4 due to potential COVID impacts [24] Question: Hiring pace for sales force - Management acknowledged slow hiring progress but expects acceleration as they fill open positions [29] Question: Balance sheet status post-equity offering - Management confirmed a pro forma balance sheet with essentially zero debt and approximately $50 million in cash [33] Question: Artegraft's revenue compared to other product categories - Artegraft has surpassed some individual brands but has not yet overtaken the entire Valvulotomes category in revenue [39]