Release Date: February 27, 2025

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 14% growth in sales, with income and EPS increasing by 26% and 30% respectively.
• The company saw significant geographical sales growth, with AIPAC up 21%, AEA 18%, and the Americas 12%.
• Expansion of the sales team, with a 12% increase in reps and a 29% increase in sales managers, is expected to drive future growth.
• New international sales offices in Shanghai and Switzerland are expected to reduce customs complexity and boost sales.
• LeMaitre Vascular Inc (NASDAQ:LMAT) has received 16 of 23 MDR CE marks, with further approvals anticipated, which will expedite market entry in various regions.

Negative Points

• The company faces challenges with the remaining 7 MDR CE marks, which are expected to be received in 2025.
• There are uncertainties regarding the actual price increases translating from list prices, especially outside the US.
• Operating expenses increased by 12% year over year, driven by investments in the sales team.
• The company is still in the process of expanding its presence in China, with a small sales force relative to the market size.
• Potential impacts from tariffs and geopolitical factors could affect the supply chain and sales, although currently deemed minimal.

Q & A Highlights

• Warning! GuruFocus has detected 6 Warning Signs with LMAT.

Q: Can you discuss the guidance for pricing and volume, particularly the 8% list price increase in January? A: (CFO) Historically, our list price increases have translated into actual price increases slightly higher than anticipated. For 2025, we expect around 6% pricing and 4% volume growth, but this will depend on various factors as the year progresses.

Q: How many of your US and European accounts have been repriced, and how many are left? A: (CEO) All accounts, except for Japan which starts April 1, have been repriced as of January 1.

Q: Can you elaborate on your salesforce expansion plans, particularly the expected 165 reps by year-end 2025? A: (CEO) We plan to add about 13 reps, with two-thirds of the growth in the US due to large territories. Internationally, we are expanding in new markets like Portugal, Czechia, and Switzerland.

Q: What is the expected impact of the autographed MDR CE mark approval in Europe? A: (CEO) We anticipate significant market opportunities, but it's challenging to provide specific guidance before approval. The European market is estimated at $8 million, and we have high hopes for growth post-approval.

Q: Can you provide insights into the gross margin target of 69.7% for 2025? A: (CFO) The target is driven by direct labor efficiencies, improved product yields, and controlled quality expenses. We also expect benefits from price increases and manufacturing efficiencies.

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