LeMaitre Vascular, Inc.

Welcome to the Lumet-Baskler Q4 2023 Financial Results Conference Call. As a reminder, today's call is being recorded. At this time, I would like to turn the call over to Mr. J.J. Pellegrino, Chief Financial Officer of Lumet-Baskler. Please go ahead.

Thank you, Operator. Good afternoon, and thank you for joining us on our Q4 2023 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 will make 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 risk 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, February 27, 2024, 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 disclosure of the factors that could cause results to differ materially from those expressed or implied. During this call, we will discuss non-GAAP financial measures, which include organic sales growth, as well as operating income, operating expense, and EPS excluding special charges. A reconciliation of GAAP to non-GAAP measures discussed in this call is contained in the associated press release and is available in the investor relations section of our website, www.lemate.com. I'll now turn the call over to George Lemaitre.

Thanks, JJ. Q4 was an excellent quarter, with 19% sales growth, a 68.1% gross margin, and 46% off-income growth. I'll focus my remarks on the top line, Salesforce activities, and some regulatory updates. Geographically, EMEA was up 21% in Q4, the Americas 20%, and APAC 11%. By product, bovine patches were up 18%, allografts 52%, Valvatone's 12% and carotid shunt 16%. Distribution of the porcine patch also added $1.5 million of sales in the quarter. The return to hospital by staff and patients, ASP increases, ample product supply, and the growth of our sales force drove Q4 sales growth. We ended 2023 with 136 reps worldwide. By December 2024, we expect to employ approximately 150 reps. To accommodate rep growth in North America, we recently promoted three regional sales managers to become area sales managers. This additional management bandwidth should enable us to hire, train, and manage more RSMs and reps. The revenues from the 2020 autographed acquisition, coupled with recent sales growth, have made our North American territories too large. In 2023, our average North American territory had $2 million in sales. Over the years, we found smaller territories enable tighter relationships with surgeons. So we've begun dividing some of the larger territories. This should reduce windshield time, too. In Europe, we also remain in growth mode. We plan to open a Paris office in Q2, which should improve our connections with French surgeons and hospitals, as well as our eight French sales reps. France is our sixth largest country by sales. Turning to Asia. I visited four of the six APAC offices in early February. Things look great over there. Our Tokyo branch is celebrating 20 years, and we've just opened offices in Seoul and Bangkok. In our first direct year in Korea, 2023 sales reached $1.7 million and op profits were $250,000. Both figures exceeded expectations. In Thailand, our first full year of direct sales should be about $1.6 million in 2024. Our Chinese team is also performing well and grew 40% last year. The autographed CE file was submitted in December 2023, and we also plan to file for autographed approval in Canada, Australia, and several other APAC countries this year. We also plan to make Xenosure filings for our peripheral and cardiac products by 2025 in China. And we're also making the MDR transition in Europe. As you know, Brussels has extended the MDR deadline to 2027. 22 of our product categories need this new MDR CE mark, so this is a considerable undertaking. We currently own three of these new MDR CE marks. Also in Europe, our allograft filings have been made in Ireland and Germany. An approval in either of those countries will be our first approval of allografts in the European Union. To conclude, 19% sales growth and a gross margin recovery produced 46% up income growth in Q4. Our growing profitability and cash on hand provide safety and strategic optionality. With that, I'll turn it over to JJ.