lmat20230331

lmat20230331_10q.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM

10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2023

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to .

Commission File Number 001-33092

LEMAITRE VASCULAR, INC.

(Exact name of registrant as specified in its charter)

Delaware

04-2825458

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

63 Second Avenue, Burlington, Massachusetts	01803
(Address of principal executive offices)	(Zip Code)

(781) 221-2266

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Exchange Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which

registered

Common stock, $0.01 par value per share

LMAT

The Nasdaq Global Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Large accelerated filer	☒	Accelerated filer	☐

Non-accelerated filer	☐	Smaller reporting company	☐

		Emerging growth company	☐

			Page

Part I.	Financial Information:		4

	Item 1.	Financial Statements	4

		Consolidated Balance Sheets as of March 31, 2023 (unaudited) and December 31, 2022	4

		Unaudited Consolidated Statements of Operations for the three-month periods ended March 31, 2023 and 2022	5

		Unaudited Consolidated Statements of Comprehensive Income for the three-month periods ended March 31, 2023 and 2022	6

		Unaudited Consolidated Statements of Stockholders’ Equity for the three-month periods ended March 31, 2023 and 2022	7

		Unaudited Consolidated Statements of Cash Flows for the three-month periods ended March 31, 2022 and 2021	8

		Notes to Unaudited Consolidated Financial Statements	9

	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22

	Item 3.	Quantitative and Qualitative Disclosure about Market Risk	30

	Item 4.	Controls and Procedures	30

Part II.	Other Information:		32

	Item 1.	Legal Proceedings	32

	Item 1A.	Risk Factors	32

	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	34

	Item 6.	Exhibits	35

	Signatures		36

	(unaudited)
	March 31,			December 31,
	2023			2022
	(in thousands, except share data)
Assets
Current assets:
Cash and cash equivalents	$	16,677		$	19,134
Short-term marketable securities		64,328			63,557
Accounts receivable, net of allowances of $820 at March 31, 2023 and $835 at December 31, 2022		25,365			22,040
Inventory and other deferred costs		53,779			50,271
Prepaid expenses and other current assets		4,619			6,731
Total current assets		164,768			161,733

Property and equipment, net		19,242			17,901
Right-of-use leased assets		15,527			15,634
Goodwill		65,945			65,945
Other intangibles, net		45,508			46,527
Deferred tax assets		1,802			1,745
Other assets		2,074			991
Total assets	$	314,866		$	310,476

Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	3,371		$	2,903
Accrued expenses		17,620			19,967
Acquisition-related obligations		856			573
Lease liabilities - short-term		2,057			1,886
Total current liabilities		23,904			25,329

Lease liabilities - long-term		14,448			14,710
Deferred tax liabilities		71			69
Other long-term liabilities		2,278			2,167
Total liabilities		40,701			42,275

Stockholders’ equity:
Preferred stock, $0.01 par value; authorized 3,000,000 shares; none outstanding		-			-
Common stock, $0.01 par value; authorized 37,000,000 shares; issued 23,714,913 shares at March 31, 2023, and 23,655,716 shares at December 31, 2022		238			237
Additional paid-in capital		192,003			189,268
Retained earnings		100,714			97,773
Accumulated other comprehensive loss		(5,572	)		(6,031	)
Treasury stock, at cost; 1,572,197 shares at March 31, 2023 and 1,568,595 shares at December 31, 2022		(13,218	)		(13,046	)
Total stockholders’ equity		274,165			268,201
Total liabilities and stockholders’ equity	$	314,866		$	310,476

	Three months ended
	March 31,
	2023			2022
	(in thousands, except per share data)

Net sales	$	47,075		$	39,561
Cost of sales		16,192			13,599

Gross profit		30,883			25,962

Sales and marketing		10,897			7,850
General and administrative		7,932			7,252
Research and development		3,875			2,932
Restructuring		305			-

Total operating expenses		23,009			18,034

Income from operations		7,874			7,928

Other income (expense):
Interest income		568			108
Foreign currency loss		(425	)		(40	)

Income before income taxes		8,017			7,996
Provision for income taxes		1,977			1,958

Net income	$	6,040		$	6,038

Earnings per share of common stock:
Basic	$	0.27		$	0.28
Diluted	$	0.27		$	0.27

Weighted-average shares outstanding:
Basic		22,111			21,935
Diluted		22,274			22,103

Cash dividends declared per common share	$	0.140		$	0.125

										Accumulated
					Additional					Other								Total
	Common Stock				Paid-in		Retained			Comprehensive			Treasury Stock					Stockholders’
	Shares		Amount		Capital		Earnings			Income (Loss)			Shares		Amount			Equity

Balance at December 31, 2021		23,477,784	$	235	$	181,630	$	88,125		$	(3,435	)		1,554,905	$	(12,404	)	$	254,151

Net income								6,038											6,038
Other comprehensive income (loss)											(1,189	)							(1,189	)
Issuance of common stock for stock options exercised		24,917		-		508													508
Vested restricted stock units		7,158		-															-
Repurchase of common stock for net settlement of equity awards														3,016		(145	)		(145	)
Stock-based compensation expense						1,167													1,167
Common stock dividend paid								(2,743	)										(2,743	)
Balance at March 31, 2022		23,509,859	$	235	$	183,305	$	91,420		$	(4,624	)		1,557,921	$	(12,549	)	$	257,787

	For the three months ended
	March 31,
	2023			2022
	(in thousands)
Operating activities
Net income	$	6,040		$	6,038
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		2,351			2,373
Stock-based compensation		1,290			1,167
Provision for inventory write-downs		334			498
Loss on divestitures		305			-
Foreign currency effect on net income		54			(428	)
Fair value adjustment to contingent consideration obligations		25			(32	)
Provision for doubtful accounts		(7	)		60
Changes in operating assets and liabilities:
Accounts receivable		(3,242	)		(1,951	)
Inventory and other deferred costs		(3,755	)		(1,267	)
Prepaid expenses and other assets		1,224			1,692
Accounts payable and other liabilities		(2,340	)		(3,439	)
Net cash provided by operating activities		2,279			4,711
Investing activities
Purchases of property and equipment and other assets		(2,130	)		(536	)
Purchases of short-term marketable securities		(564	)		-
Payments related to acquisitions		(270	)		-
Net cash used in investing activities		(2,964	)		(536	)
Financing activities
Proceeds from stock option exercises		1,446			508
Purchase of treasury stock for net settlement of equity awards		(172	)		(145	)
Common stock cash dividend paid		(3,099	)		(2,743	)
Net cash used in financing activities		(1,825	)		(2,380	)

Effect of exchange rate changes on cash and cash equivalents		53			(90	)
Net increase (decrease) in cash and cash equivalents		(2,457	)		1,705
Cash and cash equivalents at beginning of period		19,134			13,855
Cash and cash equivalents at end of period	$	16,677		$	15,560

	Three months ended March 31,
	2023		2022
	($ in thousands)

Americas	$	32,126	$	26,543
Europe, Middle East and Africa		12,277		10,494
Asia Pacific		2,672		2,524
Total	$	47,075	$	39,561

	Three months ended March 31, 2023
	(in thousands)
Unrecognized tax benefits as of December 31, 2022	$	612
Additions/adjustments for tax positions of current year		-
Additions/adjustments for tax positions of prior years		(4	)
Reductions for settlements with taxing authorities		-
Reductions for lapses of the applicable statutes of limitations		-
Unrecognized tax benefits as of March 31, 2023	$	608

	March 31, 2023		December 31, 2022
	(in thousands)
Raw materials	$	17,695	$	14,929
Work-in-process		3,940		3,662
Finished products		27,233		26,688
Other deferred costs		4,911		4,992

Total inventory and other deferred costs	$	53,779	$	50,271

	March 31, 2023						December 31, 2022
	Gross				Net		Gross				Net
	Carrying		Accumulated		Carrying		Carrying		Accumulated		Carrying
	Value		Amortization		Value		Value		Amortization		Value
	(in thousands)
Product technology and intellectual property	$	29,549	$	14,021	$	15,528	$	29,549	$	13,319	$	16,230
Trademarks, tradenames and licenses		3,767		1,635		2,132		3,647		1,533		2,114
Customer relationships		36,542		9,042		27,500		36,197		8,359		27,838
Other intangible assets		1,536		1,188		348		1,461		1,116		345

Total identifiable intangible assets	$	71,394	$	25,886	$	45,508	$	70,854	$	24,327	$	46,527

United States	2019 and forward
Foreign	2015 and forward

	Year ended December 31,
	2023		2024		2025		2026		2027		2028
	(in thousands)

Amortization expense	$	4,489	$	5,772	$	5,440	$	5,041	$	4,764	$	4,378

	Three Months Ended
		March 31,
	2023			2022
Lease cost
Operating lease cost		580			525
Short-term lease cost		162			163
Total lease cost	$	742		$	688

Other information
Cash paid for amounts included in the measurement of operating lease liabilities	$	737		$	674

Right-of-use assets obtained in exchange for new operating lease liabilities	$	472		$	141

Weighted average remaining lease term in years - operating leases		7.2			7.6

Weighted average discount rate - operating leases		4.95	%		4.90	%

Remainder of 2023	$	2,184
Year ending December 31,
2024		2,860
2025		2,753
2026		2,532
2027		2,423
2028		2,390
Thereafter		4,585
Adjustment to net present value as of March 31, 2023		(3,222	)

Minimum noncancelable lease liability	$	16,505

Record Date	Payment Date	Per Share Amount		Dividend Payment
				(in thousands)
Fiscal Year 2023
March 9, 2023	March 23, 2023	$	0.140	$	3,099

Fiscal Year 2022
March 8, 2022	March 24, 2022	$	0.125	$	2,743
May 17, 2022	June 2, 2022	$	0.125	$	2,745
August 25, 2022	September 8, 2022	$	0.125	$	2,750
November 17, 2022	December 1, 2022	$	0.125	$	2,750

SEC Form 10-Q filed by LeMaitre Vascular Inc.