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LV

LEMAITRE VASCULAR INC (LMAT)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 delivered net sales of $55.7mm (+14% YoY, +14% organic), diluted EPS of $0.49 (+30% YoY), and gross margin of 69.3% (+121 bps YoY), driven by higher ASPs and manufacturing efficiencies .
  • Guidance introduced: Q1 2025 sales $56.7–$58.7mm (mid: $57.7mm), GM 69.7%, EPS $0.48–$0.53; FY 2025 sales $235.4–$242.8mm (mid: $239.1mm), GM 69.7%, EPS $2.15–$2.32 .
  • Capital allocation catalysts: dividend raised 25% to $0.20/share and new $75mm repurchase authorization; cash and securities increased to $299.7mm due to $172.5mm 2.50% convertible notes issuance .
  • Operational momentum: product strength in grafts (+23%), carotid shunts (+14%), catheters (+12); APAC +21%, EMEA +18%, Americas +12%; Chinese approval for XenoSure with sales expected to begin around July 2025 .

What Went Well and What Went Wrong

What Went Well

  • Gross margin beat: 69.3% vs Q4 2023 68.1%, supported by higher ASPs, labor efficiencies, improved RestoreFlow yields, and restrained quality expenses; Q1 2025 GM guided to 69.7% .
  • Sales execution: Q4 sales +14% organic, led by grafts (+23%), shunts (+14%), catheters (+12); geographic strength across APAC (+21%), EMEA (+18%), Americas (+12%) .
  • Strategic progress and quotes: “2024 was a productive year… More reps, higher ASPs, a better GM and controlled spending produced growth in sales (+14%), op. income (+42%) & EPS (+44%). $300mm of cash provides strategic optionality.” — Chairman/CEO George LeMaitre .

What Went Wrong

  • Operating leverage mixed: Q4 operating income $12.9mm (23% margin) below prior guidance midpoint ($13.3mm), though within range; sequential OI lower vs Q3 ($13.1mm) and Q2 ($14.4mm) .
  • Dependence on pricing: Management acknowledged pricing floors and list price increases (8% U.S. effective Jan 2025); the sustainability of elevated ASPs remains a key watch item for estimate durability .
  • Regulatory timing risk: MDR CE marks (16 of 23 received) and European approvals (Artegraft, RestoreFlow allograft) carry timing uncertainty; Artegraft CE mark expected H1 2025 but not quantified in guidance .

Financial Results

Sequential Performance (last three quarters)

MetricQ2 2024Q3 2024Q4 2024
Revenue ($USD Millions)$55.849 $54.819 $55.717
Diluted EPS ($)$0.52 $0.49 $0.49
Gross Margin (%)68.9% 67.8% 69.3%
Operating Income ($USD Millions)$14.380 $13.148 $12.854
Operating Margin (%)26% 24% 23%
EBITDA ($USD Millions)$16.753 $15.776 $15.032

Year-over-Year (Q4 2023 vs Q4 2024)

MetricQ4 2023Q4 2024
Revenue ($USD Millions)$48.883 $55.717
Diluted EPS ($)$0.38 $0.49
Gross Margin (%)68.1% 69.3%
Operating Income ($USD Millions)$10.206 $12.854
EBITDA ($USD Millions)$12.764 $15.032

Segment Breakdown (Net Sales by Geography)

GeographyQ2 2024 ($mm, %)Q3 2024 ($mm, %)Q4 2024 ($mm, %)
Americas$36.907, 66% $35.802, 65% $36.629, 66%
EMEA$15.298, 27% $15.001, 28% $15.275, 27%
APAC$3.644, 7% $4.016, 7% $3.813, 7%
Total$55.849, 100% $54.819, 100% $55.717, 100%

KPIs and Operating Metrics

KPIQ4 2024 Value
Sales reps (total)152 (+12% YoY)
Sales managers (total)31 (+29% YoY)
Price and unit growth (Q4)+8% price, +6% units
Cash & marketable securities$299.7mm
Operating cash flow (Q4)$14.6mm
Interest income/expense (Q4 incremental effect)+$0.430mm interest income; $(0.205)mm interest expense; +$0.01 EPS
Dividend (quarterly)$0.20 (+25%)
Share repurchase authorization$75.0mm (authorized Feb 18, 2025)
Convertible senior notes$172.5mm, 2.50% due 2030

Guidance Changes

MetricPeriodPrevious GuidanceCurrent Guidance/ActualChange
Sales ($mm)Q4 2024$54.9–$56.9 (Mid: $55.9) Actual: $55.717 In range; slightly below mid
Gross Margin (%)Q4 202468.0% Actual: 69.3% Beat
Operating Income ($mm)Q4 2024$12.6–$14.0 (Mid: $13.3) Actual: $12.854 Within range; below mid
Diluted EPS ($)Q4 2024$0.47–$0.51 (Mid: $0.49) Actual: $0.49 In line
Sales ($mm)FY 2024$219.0–$221.0 (Mid: $220.0) Actual: $219.863 In line; slightly below mid
Operating Income ($mm)FY 2024$52.0–$53.4 (Mid: $52.7) Actual: $52.256 Slightly below mid
Diluted EPS ($)FY 2024$1.91–$1.96 (Mid: $1.94) Actual: $1.93 Slightly below mid
Sales ($mm)Q1 2025—$56.7–$58.7 (Mid: $57.7) New
Gross Margin (%)Q1 2025—69.7% New
Operating Income ($mm)Q1 2025—$12.3–$13.7 (Mid: $13.0) New
Diluted EPS ($)Q1 2025—$0.48–$0.53 (Mid: $0.50) New
Sales ($mm)FY 2025—$235.4–$242.8 (Mid: $239.1) New
Gross Margin (%)FY 2025—69.7% New
Operating Income ($mm)FY 2025—$57.3–$62.4 (Mid: $59.8) New
Diluted EPS ($)FY 2025—$2.15–$2.32 (Mid: $2.24) New
DividendOngoing$0.16 (Q3 2024) $0.20 (approved Feb 18, 2025) Raised (+25%)
Share RepurchaseThrough Feb 2025$50mm (authorized Feb 21, 2024) $75mm (authorized Feb 18, 2025) Increased

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 2024)Previous Mentions (Q3 2024)Current Period (Q4 2024)Trend
Pricing/ASPsGM up on higher ASPs; organic growth +12% Pricing and efficiencies drove GM to 67.8% +8% price, +6% units; U.S. list +8% Jan 2025 Strength sustained; watch durability
Sales force expansion144 reps on staff 146 reps; 28 managers 152 reps; 31 managers; target 165 by YE 2025 Continuing expansion
Regional growthAPAC +20%, EMEA +13%, Americas +10% APAC +24%, EMEA +22%, Americas +12% APAC +21%, EMEA +18%, Americas +12% Broad-based
Product performanceAllografts +30; patches +12; shunts +22 Grafts +24; patches +13; shunts +18 Grafts +23; shunts +14; catheters +12 Consistent leaders
Regulatory/MDR——16/23 MDR approvals; Artegraft CE Mark expected H1 2025; RFA approvals targeted in Ireland/Germany Progressing; timing risk
China expansion——XenoSure cardiac approval; initial sales likely around July after reimbursement/listings; 4–5 reps Launch in H2 2025
ERP/Tech ops——D365 rolled out in UK; paperless manufacturing initiative in Burlington Ops modernization
Tariffs/Macro——Minimal exposure given U.S.-based sourcing; China <1% sales Limited risk
M&A optionality——$172.5mm convert expands scope; disciplined approach Optionality increased

Management Commentary

  • “We ended Q4 with 152 reps, up 12% year-over-year, and we're targeting 165 at 12/31/25… We believe the sales force is our #1 asset” — George LeMaitre .
  • “In Q4, our differentiated product portfolio, direct-to-hospital model and larger sales team produced 8% price and 6%-unit growth” — Joseph Pellegrino .
  • “Just last week, we began shipping products from our new Shanghai office… we received our Chinese XenoSure cardiac approval in December… We should begin selling XenoSure in H2” — George LeMaitre .
  • “Operating income… increased 26%… operating margin of 23%. We ended Q4 2024 with $300 million in cash and securities… Board… approved a cash dividend of $0.20 per share per quarter” — Joseph Pellegrino .

Q&A Highlights

  • Pricing and volume in guidance: Management suggests blended ~6% pricing and ~4% units as a reasonable assumption, acknowledging variability by geography, product, and customer; all repricing started Jan 1 (Japan Apr 1) .
  • Margin phasing: FY 2025 op margin guided to 25%; Q1 tends to be lower due to $1mm+ sales meetings expense; expect build through year .
  • China launch specifics: Reimbursement and provincial/hospital listings underway; target initial sales around July; current China sales force of 4–5 reps .
  • Tariffs exposure: Minimal impact due to U.S.-based sourcing; China <1% of sales even if retaliation occurs .
  • Regulatory cadence: MDR CE marks largely reapprovals (limited upside); Artegraft is the notable exception with potential incremental impact after CE Mark .

Estimates Context

  • S&P Global consensus EPS and revenue estimates for Q4 2024 were not retrievable due to SPGI daily request limits; therefore, estimate comparisons are unavailable. Where relevant, we compared actuals to company guidance ranges and midpoints .
  • Analysts initiated coverage recently (Wells Fargo), indicating growing sell-side attention; however, consensus figures could not be incorporated in this recap due to the data access constraint .

Key Takeaways for Investors

  • Gross margin outperformance and broad product/geographic strength underpin Q4 results; focus near term on whether elevated ASPs continue to drive margin expansion in Q1–Q2 against list price hikes .
  • Sequential operating income softness versus Q2/Q3 suggests monitoring OpEx cadence and productivity as the sales force scales; Q1 seasonality (sales meetings) likely weighs on margin before 2H uptick .
  • China XenoSure launch and MDR/CE milestones present incremental 2H 2025 catalysts; Artegraft CE mark (H1 target) could open ~$8mm European market, though management avoided quantifying near-term impact .
  • Capital structure now supports larger M&A optionality (2.50% convert); combined with a higher dividend and repurchase authorization, capital deployment could be a stock catalyst subject to disciplined execution .
  • Regional momentum remains durable (APAC/EMEA/Americas all double-digit growth), suggesting diversified demand and pricing power across markets .
  • Watch pricing sustainability and regulatory timing as key variables for beating newly raised 2025 guidance midpoints; management’s track record of exceeding organic sales guidance provides a constructive backdrop but is not guaranteed .
  • Near-term trading: expect focus on Q1 2025 gross margin and EPS delivery versus guidance, China launch milestones, and any acquisition updates; medium-term thesis centers on margin structure durability, sales force productivity, and disciplined M&A .