LeMaitre Vascular, Inc. (Nasdaq:LMAT), a provider of peripheral vascular devices and implants, today announced Q2 2010 financial results. The Company posted record quarterly sales of $14.2mm and record quarterly operating income of $2.0mm. The Company also increased its share repurchase program to $5mm and raised its sales and operating income guidance for 2010.
Q2 2010 sales increased 12% versus Q2 2009, or 15% on an organic basis. By category, Vascular was up 23% organically while Endovascular increased 2%. Vascular sales benefited from a larger sales force and strength across nearly all product lines. Geographically, organic sales growth was 23% in the Americas and 5% internationally.
The Company reported a gross margin of 75.3% in Q2 2010, up from 72.2% in Q2 2009. The increase was driven by higher average selling prices, manufacturing efficiencies, and geographic mix (63% of Q2 2010 sales were in the Americas, where gross margins are comparatively favorable).
Q2 2010 operating income was $2.0mm versus $1.0mm in Q2 2009. Net income in Q2 2010 was $1.5mm, or $0.09 per diluted share, versus $925,000, or $0.06 per diluted share in Q2 2009.
George W. LeMaitre, Chairman & CEO, said, "It was great to see strong sales, a 75% gross margin and expense control all come together to produce a 14% operating margin and a record bottom line. Our newer direct markets also continued to perform well. Sales in France, Japan and Italy increased 54%, 26% and 8%, respectively, from Q2 2009."
As of June 30, 2010 cash and marketable securities was $26.0mm. Excluding share repurchases, the Company's cash increased by $2.2mm during Q2 2010. This increase was primarily the result of $1.5mm in net income and $573,000 of depreciation, amortization and stock-based compensation.
Sales and marketing expenses increased 12% in Q2 2010 to $4.7mm. The spending increase was driven by the larger sales force and increased sales commissions. The Company ended Q2 2010 with 61 sales reps versus 54 at the end of Q2 2009.
General and administrative expenses increased 3% in Q2 2010 to $2.5mm.
Q2 2010 research and development expenses decreased 7% to $1.3mm, primarily driven by reduced regulatory and clinical spending. In addition, the Company received six regulatory approvals in Q2 2010, notably the AnastoClip GC in the U.S. and the F3 Pruitt Shunt in Europe.
Share Repurchase
During Q2 2010 the Company repurchased 76,209 shares of its common stock at an average price of $5.02 per share, for a total of $383,000. The Company's Board of Directors increased the size of the share repurchase program by $3mm, authorizing up to $5mm of its common stock to be purchased from time to time in the open market or in privately negotiated transactions. Repurchases may be made under a Rule 10b5-1 plan, which would permit shares to be repurchased when the Company might otherwise be precluded from doing so under insider trading laws. The repurchase program may be suspended or discontinued at any time and will conclude no later than December 31, 2011, unless otherwise extended by the Company's Board of Directors. The program is funded by the Company's cash and cash equivalents.
Business Outlook
The Company increased its 2010 sales and operating income guidance to $55.8mm and $6.2mm, respectively. This 2010 sales guidance implies 12% organic growth versus 2009. The Company expects Q3 2010 sales of $13.8mm and operating income of $1.4mm. This Q3 2010 sales guidance implies 8% organic growth versus Q3 2009. Guidance amounts exclude the effects of acquisitions, restructurings, foreign exchange fluctuations, and distributor terminations.
High testosterone levels in older men associated with greater risk of atrial fibrillation