管理層發言
Welcome to LeMaitre Vascular's Q1 2026 Financial Results Conference Call. As a reminder to everyone, today's call is being recorded. At this time, I will turn the call over to Mr. Dorian LeBlanc, Chief Financial Officer of LeMaitre Vascular. Please go ahead, sir.
Thank you. Good afternoon, and thank you for joining us on our Q1 2026 conference call. With me on today's call is our CEO, George LeMaitre, and our President, Dave Roberts. Before we begin, I'll read our safe harbor statement. Today, we'll be making some forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, the accuracy of which is subject to risks and uncertainties. Wherever possible, we will try to identify those forward-looking statements by using words such as believe, expect, anticipate, pursue, forecast and similar expressions. Our forward-looking statements are based on our estimates and assumptions as of today, May 5, 2026, and should not be relied upon as representing our estimates or views on any subsequent date. Please refer to the Cautionary Statement regarding forward-looking information and the Risk Factors in our most recent 10-K and subsequent SEC filings, including disclosures of factors that could cause results to differ materially from those expressed or implied. During this call, we will discuss non-GAAP financial measures, such as organic sales growth. Reconciliations of GAAP to non-GAAP measures discussed in this call are contained in the associated press release and, if applicable, in supplemental materials, both of which are available in the Investor Relations section of our website, www.lemaitre.com. I'll now turn the call over to George LeMaitre.
Thanks, Dorian. Q1 featured 11% sales growth, a 72.7% gross margin and 42% EPS growth. Grafts were up 20%, valvulotomes 15% and carotid shunts 11% as each category posted record sales. Our three geographies also posted record sales. EMEA was up 20%, APAC 18% and the Americas 7%. Artegraft has become our largest product, and we're investing in its growth in three ways: number one, filing more international approvals; number two, making longer sizes available for leg bypasses; and number three, pursuing Quick Stick claims for AV access. Worldwide Artegraft sales grew 36% in Q1. International Artegraft sales in Q1 were $2.1 million, and we expect 2026 sales to be $10 million versus $4 million in 2025. Health Canada has approved Artegraft and the launch is planned for H2 2026 as we finalize Canadian-specific packaging validations. Additional Artegraft approvals are expected in 2027 for Korea, Brazil, Vietnam and India. We're also working to make longer artegrafts available. Because European surgeons use Artegraft for leg bypasses, our longest Artegraft, which is 50 centimeters, is now in high demand, and we know we could sell longer sizes. Unfortunately, our current packaging tube is just 53 centimeters long. So the first step is to gain approval for a longer tube, and we plan to make these filings in the U.S. and Europe in H2 2026. First sales of these longer artegrafts could start in H2 2027. Separately, we've made a pre-submission filing to the FDA as we seek Quick Stick AV access claims on Artegraft's U.S. labeling. This pre-submission will help us collaborate with the FDA to develop the pathway for a PMA filing or to design a clinical trial. While Artegraft's current U.S. labeling restricts cannulation to 10 days after implantation, peer-reviewed literature indicates that Artegraft can be cannulated 1 to 3 days after implantation. RFA grew 25% in Q1, led by strong U.S. results. We currently distribute tissues in three countries: the U.S., Canada and the U.K. German implants should begin in Q2, and we now expect to receive Irish approval in H2. Our Irish warehouse opened in April, and we'll begin shipping our core medical devices starting in June as we await an audit from the Irish Tissue Authority. This audit should enable tissue distribution from our Dublin warehouse to Irish hospitals in H2. Long term, this warehouse will be used for pan-European distribution. We filed for Australian approval in April, and we plan to file in Austria, Holland, Belgium, Spain and Switzerland in 2026. As for our RFA facility transfer, tissue processing is ramping up in Burlington, and we should complete the project by year-end. We ended Q1 with 158 sales reps, up 3% year-over-year, and we plan to end 2026 with 170 to 180. We currently have 16 open requisitions for new reps, mostly in the U.S. We ended Q1 with 35 regional sales managers and country managers, up 13% year-over-year. We expect to go direct in Poland in Q4, and this project will include an office, warehouse, a general manager, a customer service team and several reps. Poland will be our 32nd direct country. Higher ASPs, geographic expansion and disciplined spending produced 11% sales growth and 42% EPS growth in Q1. Full year 2026 also shows operating leverage. Increased guidance implies 12% sales growth and 26% EPS growth. Our new 2030 goals are posted on the walls of all LeMaitre conference rooms. We call them the 2030 planks, and our playbook remains simple: produce quality devices, build our sales force, go direct in new countries, acquire niche products and focus on profitability, cash flow and dividends. I'll now turn the call over to Dorian.
Thanks, George. Organic sales growth of 10% over Q1 2025 was driven by average selling price increases of 8% and unit growth of 2%. Unit growth was impacted by a lower-than-average quarter in our distribution business, which can be lumpy. Excluding distribution, direct sales grew 12.8% organically, comprised of 8.4% price and 4.4% units. Total organic revenue growth excludes a $2 million foreign exchange benefit in Q1 2026 and $1.5 million of Aziyo distribution sales in Q1 2025. These two items largely offset one another. We discontinued Aziyo distribution in May 2025. In Q1 2026, we posted a gross margin of 72.7%. The 350 basis point year-over-year improvement was driven primarily by higher ASPs and manufacturing efficiencies. Our Q2 gross margin guidance of 72.1% reflects the impact of our new Billerica warehouse and the manufacturing transfer of our RFA processing to Burlington. Operating expenses in Q1 2026 were $30.6 million, an increase of 6% versus Q1 2025. Despite the continued expansion of the sales force, overall company headcount decreased 3% from 662 at March 1, 2025, to 641 at March 31, 2026. Q1 2026 operating income increased 41% year-over-year to $17.8 million, with an operating margin of 27% compared to 21% in Q1 2025. Fully diluted earnings per share were $0.68, up 42%, benefiting from strong operating income and an improved effective tax rate. We believe our effective tax rate will remain lower than our historical rates. Given the strong growth in high-margin international Artegraft sales and our overall geographic sales mix, a larger share of our income qualifies for the foreign-derived intangible income (FDII) deduction, which structurally lowers our tax rate. Excluding the discrete items in this quarter, we expect an 80 basis point improvement from historical effective tax rate due to the higher FDII deductions, another benefit of our U.S. manufacturing footprint. Cash from operations generated $15 million in Q1 2026 as compared to $9 million in Q1 2025. We paid $5.7 million in dividends to our shareholders during the quarter. We ended Q1 2026 with $367 million in cash and securities, an increase of $8 million in the quarter. The LeMaitre playbook continues to drive broad-based revenue growth, supported by our differentiated products, direct-to-hospital model and strong commercial organization. We are affirming our full year revenue guidance of $280 million, representing 12% organic growth. We are increasing our annual guidance for gross margin to 72.3% and operating income to $79.8 million, representing 24% growth over adjusted 2025 operating income. We are also increasing annual guidance for diluted earnings per share to $3, or 26% growth from adjusted 2025. Historically, Q2 has been one of our strongest quarters, and we're expecting revenue of $71.5 million and an operating margin of 30%. Our current guidance assumes a constant euro-U.S. dollar exchange rate of $1.17 and no dilutive impact from our convertible debt. For additional details, please see today's press release. Finally, we'd like to welcome Keith Hinton from Freedom Capital Markets to the call. Keith initiated coverage on LeMaitre on March 31. With that, I'll turn the call over to the operator for questions.
分析師問答
Our first question comes from the line of Keith Hinton from Freedom Capital Markets.
I have a high-level question on the pricing side of things. EMEA has been growing faster than the U.S. for a few years. It's my assumption that prices there start lower and there's less ability to take price over time. Considering that balance against the ongoing mix shift towards grafts, where it seems like you do have good pricing leverage in the U.S., how should we think about the sustainability of high single-digit blended pricing increases in the out years?
This is George LeMaitre. Welcome to your firm for covering the company, and welcome to the call. Regarding price increases and sustainability, we feel very comfortable with what's going on here. We have another year where we're validating that we're able to get these price increases. We achieved 8% in Q1. Regarding European pricing flexibility versus U.S. pricing flexibility: the pricing floors that we put in are largely in the United States on about 55% of our products, and we adjust them year-to-year. In Europe, I think we have more room to go; only about 40% of our products have pricing floors. You can add pricing floors to more products in Europe. Also in Europe it takes longer for price increases to be fully realized because in parts of Southern Europe many products are sold on three-year tenders, so you can only change your price once every three years and it takes time to fully implement. So there is a little more room in Europe given that we are not as price-floored there and because it takes longer for hikes to be fully installed.
That would be perfect. And then one specific: can you talk about patches performance in the quarter? I know there was a tough comp; you were lapping some supply issues for a competitor, and I think that was the last quarter of Elutia. How should we think about patches growth going forward?
It was not a strong quarter for patches. XenoSure, our core patch, was up 5%. Organic growth for the whole patch category was 2.3% for the quarter. Again, 5% for XenoSure and 2.3% for the whole category. Does that help?
We had an audio problem earlier but can hear you well at the moment. Great. We lost you for a little while.
Our next question is from the line of Michael Petusky from Barrington Research.
With the events of the last couple of months in the Middle East, are you seeing any impact either in terms of customers in that part of the world or in general in terms of transportation costs and so on? Any impact from the international problems?
We had a concrete issue: we weren't able to ship $175,000 worth of exports to the Middle East at the end of the quarter, so we ended Q1 without having shipped that. In general, we're not being significantly impacted. This is a big topic globally, but for LeMaitre Vascular so far, we've been okay. As time goes by, supply chain costs for transportation may increase, but for now we are managing and things are okay with respect to what's happening in Iran.
Great. And if Dave is available, I'd like an update on M&A and any commentary he has there.
Mike, yes, it's Dave. We're active on M&A. We've put out two or three term sheets so far this year. The hunting ground remains open vascular, where there are a couple dozen targets, and cardiac surgery, which is about 12% of the market. The revenue sweet spot for targets remains roughly $15 million to $150 million. We have cash and dry powder to execute, so we're looking for the right fit at the right price.
Over the last five years you were pretty active, and recently less so. Have you changed your approach at all in terms of hurdle rates or are you waiting for the right pitch?
We haven't materially changed our approach. The last sizable acquisition was Artegraft almost six years ago. We did a very small acquisition in December. High level, no, we haven't changed our approach. Part of the reason for fewer acquisitions is fewer targets left in open vascular. We've sharpened our focus in cardiac surgery and feel we're there now, which is why we're making these nonbinding offers. We have a lot of cash but prefer to wait for the right opportunity rather than overpay.
A small addition: over the last six years since our last big acquisition, we've grown more confident in organic growth. The stock has moved based on organic performance, and when you prove you can grow organically, you feel less pressure to do acquisitions. That has implicitly raised the bar for acquisitions.
Our next question is from the line of Michael Sarcone of Jefferies.
George, you opened the call talking about growth drivers for Artegraft. I want to focus on the Quick Stick claims. Can you help frame the volume opportunity? Gore Acuseal is a primary competitor. What could you gain in share or volume growth if you obtained the Quick Stick claim?
Mike, it's Dave Roberts. You're right to identify Gore Acuseal. There are other Quick Stick grafts on the market. Quick Stick focuses on dialysis access, not peripheral bypass. In Europe, Artegraft is primarily used for peripheral bypass, so a Quick Stick claim will mainly help in the U.S. Last year, our U.S. Artegraft sales were around $40 million. We don't heavily publish TAM estimates here, but we do believe Quick Stick would expand Artegraft sales materially versus current U.S. levels. The regulatory path is long — it could be two years or possibly five to six years — but the market is large enough to justify the investment. We do expect a material increase in U.S. sales if we obtain the claim, but we're not prepared to quantify precisely how much bigger yet.
On Artegraft lengths: what effect does longer length have on ASP? As you elongate grafts, what kind of ASP bump do you expect?
There's a good market for longer grafts, and we've proven this with Omniflow II, our ovine-based device that's been available for several years. When we get to longer Artegrafts, we've already seen the 50-centimeter device command a significant premium versus other Artegraft lengths. So when we get to 53, 55, 58 centimeters, we expect to be able to charge premium pricing. Also, when we launched in Europe, our manager set pricing above American pricing, which is rare but is working. Longer sizes should be strong margin devices.
Our next question is from the line of Brett Fishbin from KeyBanc Capital Markets.
Quick question on gross margin. You expanded around 350 basis points year-over-year and called out higher pricing as well as manufacturing efficiencies. Could you speak to the split between those two items? Also, can you double-click on the manufacturing efficiencies and how much more room you see to take out cost?
Thanks for the question. The 350 basis points year-over-year improvement was largely driven by pricing and positive mix. Our distribution business was down and that is a lower-margin business; Artegraft, by contrast, is a very high-margin business. Those factors, combined with higher pricing, drove the improvement. The manufacturing efficiencies are the result of consolidating operations in Massachusetts and a culture of continuous improvement. While there isn't a single transformative initiative, we've seen many lean or Kaizen projects, some automation, and better throughput. For example, at the end of 2023 we had 211 direct labor employees; at the end of 2025 we had 175, while manufacturing more devices. That's a result of automation and process improvements. We also drove cost savings in freight and logistics in the back half of last year, and we've built out a European warehouse footprint that reduces freight costs. We continue to look for opportunities to drive cost out, but much of it is continuous improvement rather than one big change.
The guidance implies a material ramp up in operating margin to hit 29% for the year. How should we think about the next few quarters and getting to a fourth quarter exit rate?
Q2 should be one of our stronger quarters historically, and we're targeting a 30% operating margin in Q2. The company-level guidance implies 29% for the year and is consistent with a strong second quarter and a healthy second half. We're at 27% operating margin for Q1, so the progression to 29% by year end is reasonable.
To add, we do plan some investments in the back half of the year — Artegraft investments, the Billerica warehouse and the Burlington RFA transition. We also expect to ramp the sales force in the back half of the year and make commercial investments. In 2025 the expense cadence was front-loaded; 2026 will likely be more normal with higher OpEx in the second half relative to the first half.
Our next question is from the line of Rick Wise from Stifel.
On first-quarter OUS Artegraft performance: you called out $2.1 million in sales this quarter, which implies a run rate below the $10 million target for the year. How are you thinking about the sales cadence through the rest of the year? Are you expecting dollars to step up each quarter, and are there seasonal dynamics we should be aware of to get to the $10 million target?
On a day-adjusted basis, Q1's $2.1 million equates to an annualized rate closer to 8.6% rather than 8.4%. Q1 is always our lightest quarter. Health Canada approval means shipments in H2 2026 once packaging validations are complete, and Southern Europe is ramping up. We feel good about reaching the $10 million target; the ramp makes sense to us.
On RestoreFlow Allografts: you highlighted beginning distribution in Germany in Q2 and expecting RFA approval in Ireland in H2. Share your latest thoughts about the European RFA market opportunity and potential speed of adoption and revenue ramp.
Artegraft gained momentum quickly and took center stage. RFA has been slower from a regulatory perspective but is now gaining focus. We received German approval in October but have not done implants yet; we are building inventory of 'German approved' items which have slightly different technical requirements than U.S.-approved items. The Irish setup took longer because the facility must be open before requesting an inspection. We filed in Australia and plan five additional European filings in H2 2026 (Austria, Holland, Belgium, Spain and Switzerland). Adoption should accelerate as regulatory work completes, but initial ramp has been a bit slower than we originally expected.
Our next question is from the line of Daniel Stauder from Citizens JMP.
On Artegraft longer sizes for leg bypass: could you discuss the decision? It sounds like higher dollar sell points and more common in Europe. Are there trends among vascular surgeons driving higher demand for these longer sizes? Why now and why pursue this?
European colleagues have long indicated a 50-centimeter graft isn't sufficient; they want 60-, 58- and 53-centimeter lengths as with our Omniflow product. In Europe, Artegraft is used more for peripheral bypass and less for AV access, so the need for longer grafts has been clear. For the U.S., 50 centimeters has been sufficient because our U.S. Artegraft business is mostly dialysis access. The project to enable longer grafts has been on our drawing board for some time; now that we have CE mark and validated demand, it's becoming real.
Clinically, for patients with peripheral vascular disease, particularly distally toward the foot, endovascular interventions are often less durable. Surgeons tend to prefer a long bypass with allografts in those situations. We've always seen the most demand for the longest allograft. In the U.S., the demand was for dialysis access, but Europe highlighted the need for longer Artegrafts.
Regarding market opportunity, how much would these approvals expand your TAM for this business? Are there procedures this unlocks? Any detail on patient population sizing or growth and what this could offer?
It's somewhat complex. We provided a TAM previously of about $30 million for biologic grafts internationally, which included the bovine graft. Last year we sold roughly $6 million of bovine and plan to sell $10 million. That was part of the $30 million TAM. In the short run, adding longer lengths doesn't change our stated $30 million TAM. We should revisit TAM over time as we get more data, but for now we expect the TAM to remain around $30 million.
Our next question is from the line of Nathan Treybeck from Wells Fargo.
On capital allocation and opportunity sets: are there any product categories in open vascular or open cardiac where you're seeing outsized momentum or strategic underinvestment?
Open vascular remains the center of the fairway for us, though targets there are more limited. Cardiac surgery is larger, and we're attracted to niche markets where we can obtain leadership positions. We prefer physician-preference, differentiated items with a short surgeon learning curve. Cardiac is about four times the size of open vascular, so there are many interesting niches. We evaluate targets strategically and with a long-term viewpoint.
How are you thinking about the RestoreFlow German launch ramp and contribution to growth this year?
We baked conservative assumptions into guidance because German launches have a slightly different set of approved tissue items and we've had to build inventory of German-approved items, which slowed initial clinic use. Our U.K. launch went well, but the German launch is more cautious. We have conservative numbers in guidance and there could be upside if the launch moves faster.
As a follow-up on guidance philosophy: you see 10% organic growth, with the distribution dynamic in Q1. The guidance implies acceleration through the year. How derisked is this guidance now?
There is always risk, but historically our guidance has been reasonable. Q2 and Q4 tend to be stronger quarters for us. We have a good history of guiding and chasing those numbers. We aim to give you a fair number and then execute to it.
Our next question is from the line of James Sidoti from Sidoti & Company.
What were operating cash and capital expenditures in the quarter?
Cash from operations was $15.1 million, and capital expenditures were $2.8 million in the quarter.
You mentioned consolidation of the Chicago plant. Is that expected to be done by the end of this year?
Yes.
You brought up Korea, Brazil, Vietnam and India. When do you expect those approvals?
We expect approvals in 2027. We wrote H2 in the script, but I would expect maybe one in H1 and three in H2. They should be moderate contributors to 2027.
Our next question is from the line of Frank Takkinen from Lake Street Capital Markets.
On the distribution swing: is there a chance it swings back in Q2 and the back half of the year? Is this potentially a geography where you may elect to go direct?
Yes, it's likely to swing back. To provide a data point, April sales growth was 13%, composed of 7% price and 6% units, which suggests Q1 was a temporary phenomenon. Our export business has a strong CAGR of about 20% since 2019. We continue to see strong growth internationally, and we use export performance to identify places to go direct. Poland, Mexico and Greece are on our 2030 plank sets. We expect to go direct in Poland this year and plan to expand direct operations to other countries over time. We're not worried about export performance; it's a strong growth area.
On the Artegraft R&D projects: does this mark a transition to more internal R&D focus given the M&A environment, or is this just one-off because Artegraft has momentum?
We haven't done extensive R&D historically, so R&D projects become very visible to us. We're pursuing low-risk, low-beta projects, like enabling a longer packaging tube, where we have high confidence we can obtain approvals. We plan to invest more in R&D than we've historically done; whereas older targets might have been 10%, we're realistically targeting around 8% as we grow from a 6% base. More R&D will help our sales force and commercial expansion.
Our next question is from the line of Keith Hinton from Freedom Capital Markets.
If you execute a sizable deal in the cardiac space, beyond purchase price, how should we think about incremental investment to bolster commercial presence in cardiac? Is there a level of near-term margin dilution you'd accept to create a growth driver for later years?
It depends on the product. If the cardiac product also has use in vascular surgery, we could leverage our existing channels and may not need a dilutive cardiac sales force. If the product is exclusively for cardiac surgery, we might need to establish a cardiac sales presence, which could be dilutive initially. We think long term: the first cardiac acquisition could create a channel that leverages future cardiac acquisitions. We always take a long-term view when considering sales force investments.
That concludes today's conference. Thank you all for your participation, and you may disconnect. Have a great day.