LeMaitre Vascular, Inc. Q3 FY2025 earnings call

• Q3 featured organic sales growth of 12% and a better-than-expected gross margin. - Artegraft launch exceeded expectations with Q2 to Q3 sales growth and expected Q4 sales. - Received German approval for RestoreFlow in October with distribution beginning in Q2 2026. - Leased a European RFA distribution facility in Dublin. - Ended Q3 with 152 reps, with 23 open rep hiring requisitions and expecting 165 reps at year-end. - Published 2026 U.S. hospital price list with an 8% increase, 55% of North American revenue subject to price floors. - Opening a 34,000 square foot distribution center near Burlington headquarters in Q1 2026.

In Q3, Grafts saw a 23% increase, Shunts up 18%. EMEA grew 18%, Americas 10%, and APAC 4%. Organic sales growth was 12%, with price accounting for 10% of Q3 growth and 2% from units. Excluding catheters, Q3 organic growth was 14%. The international Artegraft launch exceeded expectations with Q2 sales at $420,000, Q3 at $1.4 million, and expected Q4 sales of $2 million, growing 33% worldwide in Q3.

• Full year revenue guidance is $248 million, 13% growth. - Anticipate a full year adjusted gross margin of 70.3% and adjusted operating income of $63.7 million, up 22%, resulting in a 26% adjusted operating margin for the year. - Guidance on adjusted fully diluted earnings per share of $2.37, up 22% over 2024. - Guiding 40% op income growth in Q4 and a 29% op margin.

• The New Jersey Artegraft facility received an FDA warning letter related to quality management system, but it hasn't disrupted production, shipping, or invoicing. - Issues with cardiac patch launch in China; struggling to sell cardiac patches approved in December. - Constraints with German approval for RestoreFlow regarding specific recovery centers for inventory.

Q: Michael Sarcone asked about lower organic growth.

A: George LeMaitre responded about catheter recall front-loading sales, FX impact, and APAC struggles.

Q: Shaymus Contorno asked about 2026 U.S. hospital price increase.

A: George LeMaitre explained about niche categories and blended pricing.

Q: Rick Wise asked about key product lines and capital deployment.

A: George LeMaitre mentioned biologics like Artegraft, allografts, XenoSure; David Roberts talked about cash balance and capital deployment strategy.

Q: Nathan Treybeck asked about R&D spend and Germany approval for RestoreFlow.

A: George LeMaitre discussed R&D spend and Germany approval's importance.

Q: Michael Petusky asked about sales force and China.

A: George LeMaitre talked about sales force numbers, China sales growth, and cardiac patch launch issues.

Q: Kyle Bauser asked about growth mix and margin improvement.

A: David Roberts discussed growth mix by region and manufacturing/operational efficiencies contributing to margin improvement.

Q: Daniel Stauder asked about cardiac and carotid shunt performance.

A: George LeMaitre talked about cardiac allograft growth and carotid shunt growth due to BARDA exiting.