LeMaitre Vascular, Inc.

Good day, ladies and gentlemen. Welcome to the LeMate Vascular First Quarter 2024 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 LeMate Vascular. Please go ahead, sir.

Thank you, Operator. Good afternoon, and thank you for joining us on our Q1 2024 Conference Call. With me on today's call is our CEO, George LeMate, 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 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 2nd, 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 is 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. Q1 was an excellent quarter with 14% sales growth, a 68.6% gross margin, and 62% EPS growth. We posted record sales for each of our three geographies and nine of our 12 product categories. I'll focus my remarks on the top line, our sales force, and some regulatory updates. Allografts were up 31% in Q1, bovine patches 13%, and carotid shunts 27%. APAC was our strongest region, up 44% in Q1, driven by $600,000 of Q1 sales growth from our new sales offices in Korea and Thailand. EMEA sales were up 17%, while the Americas were up 10%. Notably, Canada was up 31% and the UK was up 29%. We ended Q1 with 137 reps, including 62 in North America, 52 in Europe, and 23 in APAC. We expect to have 150 reps on staff at the end of 2024, with most of the hiring in North America, where our average territory size is $2.2 million. In Europe, the average territory size is $1.1 million and APAC is $700,000. We also continue to add international sales offices. Last Monday, we had a ribbon cutting ceremony at our new Paris sales office. France is our sixth largest country. Opening this office should improve our connections with French surgeons and hospitals, as well as our eight French sales reps. We've experienced a strong link between opening an office and sales growth. A Zurich office might be next. We seem well positioned for the 2027 MDR CE mark deadline. Based on recent discussions with our notified bodies, we now expect to receive an additional 11 MDR CE marks by September 30. In total, we should possess 14 of our 22 MDR CE marks by the end of the third quarter, and we expect to receive the remaining eight approvals by the end of 2025. Our autograph CE mark filing was made in December 2023. When we acquired Autographed in 2020, it was cleared for sale only in the US, so receiving European approval would be a nice opportunity for our largest US product line. We sold $33 million of Autographed in the US in 2023. We now believe that Autographed will receive its CE mark by Q4 2025. In the meantime, we're also submitting Autographed for approval in Canada, Australia, Japan, Korea, Thailand, and Singapore. Separately, we continue to pursue allograft approvals in Ireland and Germany. We believe that one of these approvals will happen in 2024 and another one in 2025. These are not MDRCE marks, but rather individual approvals by each country's human tissue authority. To conclude, Q1 was an excellent quarter with 14% sales growth, a 68.6% gross margin, and 62% EPS growth. We believe our profitability and cash balance provide us strategic optionality. With that, I'll turn the call over to JJ.

Thanks, George. We continue to apply pricing floors to more geographies and more devices. Pricing floors are possible because of our high-quality, differentiated devices selling into niche markets. Average selling price has increased 8% in Q1 2024, while units increased 3%. This follows our full year 2023 ASP increase of 12% and unit growth of 5%. In Q1 2024, we posted a gross margin of 68.6%, up 3,300 basis points year over year. The increase was driven by higher ASPs and productivity improvements. More specifically, a more efficient manufacturing team continues to benefit the P&L. In Chicago, our Allagraph Manufacturing Group had a strong Q1. and in Burlington, quality costs remain in check. Average selling price increases improved the gross margin by approximately 2.5% in the quarter, and our guidance calls for a 68.6% gross margin for the full year. Operating expenses in Q1 2024 were $24.8 million, an increase of 8% versus the Q1 2023. The increase was driven largely by more employees, including 12 more sales professionals. The 8% increase compares favorably to our 20% adjusted operating expense increase in the full year 2023 and reflects our shift from post-COVID rehiring to a more restrained hiring posture in 2024. Q1 2024 operating income increased 51% year-over-year to $11.9 million and resulted in an improved operating margin of 22%, up from 17% in the prior year period. EPS was $0.44 in the quarter, up 62%. We ended Q1 2024 with $108 million in cash and securities, an increase of $3.2 million in the quarter. The increase was driven by cash from operations of $5 million. Separately, our new ERP system went live in the US in Q1 2024. The system should improve real-time reporting, streamline financial processes, and provide more sophisticated analytics. Implementation at our overseas entities will take place in 2025 and beyond. This project should cost $7 to $10 million, and the annual P&L impact will be about $1 million. Regarding guidance, we are forecasting improved operating leverage in 2024, driven by restrained operating expense growth and an improved gross margin. Our updated guidance includes an operating margin of 22% in 2024 versus 19% in 2023 and 17% in 2022. For more details, please see today's press release. But a few Q2 highlights include sales growth of 10%, gross margin of 68.6%, and EPS growth of 31%. And for the full year, 2024 guidance has increased to sales growth of 11%, gross margin of 68.6%, and EPS growth of 33%. With that, I'll turn it back over to the operator for questions.

Ladies and gentlemen, if you have a question or comment at this time, please press star 11 on your telephone keypad. If your question has been answered or you wish to remove yourself from the queue, simply press star 11 again. Once again, if you have a question or comment, please press star one one on your telephone keypad. Please stand by while we compile the Q&A roster. Our first question or comment comes from the line of Rick Wise from Stiefel. Mr. Wise, your line is open.

George, maybe I first, I guess I must say, in fact, the proverbial congratulations on another excellent quarter. And thank you. To start off with the questions, let's focus on Salesforce. You said you're at 137, still hoping to get to 150 by year end. Is that a stretch target? Are you feeling good? Do you have people lined up? Just maybe talk us through that process. You said folks are going, you're sort of aiming more in the U.S. territory splitting or you start opening new areas? Just some larger perspective there. Thank you.

Sure, sure. Thanks for the good question, Rick. Yeah, it's been a little bit slow, probably inside your question, you're pointing that out. 136, 136, the last couple quarters, now 137. We have 14 open on the board that have been recruiting for, I don't know, one, three months on average for those guys. So we definitely feel like we're going to get those people. Of course, there's always some turnover. And then probably in the summer, we're also going to be opening up some new expansion territories. And to your point and also from the script, we're definitely hiring in North America almost exclusively. There's one or two in Europe and one or two in Asia right now. So no, I think we'll get there. It's still eight months left in the year to get there. And hiring is not that hard. It's doable. So feel comfortable where we are. And as for how we're getting these, I think To stylize, I think we're largely splitting the territories that are already out there. We called out this $2.2 million average size. We have a sort of rule of thumb inside of LaMate that once something gets that big, you probably should split it in half. And on average, all of our territories in the US are at that size now.

Gotcha. JJ, a question for you on gross margin. Thanks for the detailed color and the breakdown. on the price contribution. Maybe talk to us about the productivity side. Is it volume? Is it mix? Is there something happening that should drive, in addition to price and volume, expanding gross margins maybe longer than we're appreciating?

Yeah, I would say it's Sort of three things, Rick. Average price increases, the DL efficiencies, and quality costs. And I would expect those to continue as we go through the year.

Yep. And so, Rick, part of this story here is that the quality, if you look back over the last four years, it feels like there's a pretty simple story in gross margin where quality costs have gone, have added about four or five points of cost just on our gross margin over the last four or five years. And we feel like we've kind of put a top or a head on that. And it feels like we've got that in control and it's not going to get worse.

Yeah. And in terms of the price increases, Rick, I would say those are probably adding two, two and a half percent to the gross margin. So if we get an eight or nine percent price hike in a year, it's probably adding something like that. So a really nice tailwind. And then the direct labor efficiencies piece, that's the story of hiring manufacturing folks post-COVID. And then that process was kind of difficult and sloppy. And so we had trouble getting people in the door, and we had trouble keeping people. Turnover was a little bit higher. And then we had trouble training folks. And so as we got through that, those manufacturing efficiencies, i.e. the direct labor folks being in their sort of stations longer, more utilization, if you will, and then being more efficient, making devices quicker, if you will. That all started to come through to the P&L, and I think we're seeing those sort of three favorable trends happening through the rest of the year as well.

Gotcha. And maybe just a last one from me for now. I mean, there's so much to choose from here, but I'm really struck by the incredibly impressive OUS growth performance. And again, my theme here is just the sustainability of the kind of impressive growth you're turning in. 44% in Asia Pacific, et cetera, opening new offices in France, the new product approvals and rollouts. Talk to us about the sustainability of the kind of growth we're seeing and I mean, is there upside from here? Just any incremental perspective there, George, would be welcome.

Sure. Thanks for the great question, Rick. And I appreciate how you framed that. I think particularly the Asia PAC, what you're seeing over here in the last five years is a repeat of what we did in Europe back in the, I'm going to call it the aughts and the tens. I don't even know what you're supposed to call those anymore. But I think right now you're sort of shifting your focus a little bit over there. And to simplify this for everyone on the call, I think this is just a virgin territory hypothesis. And we just keep finding new places to go. Korea is going crazy right now in a good way for us. Thailand we hope will start with that as well. And I even think something we didn't mention here today was China actually, you know, we started not using the word China on these calls because things have been so delayed with the regulatory. operationally and organically, it's going crazy. It's going great. We had a 92% quarter in Q1 in China. So I would say simply put, it's virgin territory for Asia. And then I think when you flip your eyes back over to Europe, it's about getting these approvals for RFA and ArteGraph, really big product lines for us in the U.S. The number one product line is ArteGraph, and RFA is not that far behind, or Allograft, sorry, these two words, are very close. Artigraft and Allograft are the two biggies in the U.S., and we don't have any approvals for those two products in Europe. So I think the sustainability may not even be next year for both those products. It may be the year after, but I think you've got a nice runway of bringing American devices overseas.

Thanks so much.

Thanks, Rick.

Thank you. Again, ladies and gentlemen, if you have a question or comment at this time, please press star 1-1 on your telephone keypad. Our next question or comment comes from the line of Suraj Kalia from Oppenheimer. Sir, your line is open.

Good afternoon, everyone. George, can you hear me all right?

I can, Suraj.

Perfect. So, gentlemen, congrats on a nice quarter. George, forgive me shuttling between many calls. Did you talk about valvular tome growth? I just wanted to get a sense of where we are, at least on a macro level, for valvulotomes, given the intense debate on endovascular versus surgical.

Of course, of course. We didn't bring it up. Valvulotomes were up 2% in Q1. Last year was a much bigger growth number. Maybe if I could say, this is so typical, but we had a really tough comp in Q1 to beat up on for valvulotomes, but they were still up 2%. If you look out over the year and the annualization of everything, units and stuff, I feel like last year was a nice year for valvulatomes. This year is not quite as nice, but there still should be a little bit of growth with valvulatomes.

Got it. Fair enough. The other thing, George, in terms of price impact on the quarter end, how should we think about average sales rep tenure versus a year ago?

Hmm, interesting. We hadn't really discussed that much in the prep for this meeting. It feels to me like Salesforce turnover has not been a problem for us over the last, I don't know, 18 months ago or so, 24 months. So it's not something we're on that much right now. I would say unchanged versus a year ago Salesforce turnover.

Got it. And George, one final question. Obviously, there's been a large strategic that has you know, just surprised everyone with takeout multiples. And you guys have been relatively very disciplined on M&A and, you know, basically showcasing to the street in terms of your strategy. And David has, you know, been very articulate in that. George, I'm curious if you could just shed some light on how you see the potential target landscape, just the M&A environment, how you all are seeing it What should we think about as the year progresses? Thank you for taking my question.

Hey, Suraj. It's Dave. If you don't mind, I'll jump in. You mentioned the multiples. You're probably referring to J&J Shockwave and the roughly 18 times 2023 revenue. That was obviously a huge announcement in our space. I would say we're always cognizant of valuation. That was a very high valuation. There's another lower one, Advanced Medical Solutions bought Peter's Surgical in Europe for less than two times sales. So, you know, valuation always depends on what you're buying. Of course, I think I read your reports and I see small cap med tech valued around four to five times sales. I mean, we are, I'd say we are very, we do focus on valuation law. I'd say more than that, we focus on strategic fit. And so for us, finding the right target, which, you know, ideally is an open vascular target. There are about 25 of them with more than $5 million of revenue. That's where we're really hunting. And in terms of, you know, this year, you never know where I'd say we've got, two targets are a little bit larger that we're talking to, but things come and go, but we're always hunting. So I guess I'll leave it with that unless you have a follow-up.

Nope, that should be good enough. Gentlemen, thank you for taking my question and congrats again.

Thanks a lot, Suraj.

Thank you. Our next question or comment comes from the line of Daniel Strouder from Citizens JMP. Mr. Strouder, your line is now open.

Yeah, great. Thanks. So I had a quick question on the operating margin profitability in 2024. And correct me if my math is wrong, but if we look at gross margin and revenue guide for 2Q in the year, due to that operating income number, it seems like there's a good amount more of OPEX leverage than we were anticipating. So I guess, you know, if that is the case, where is this primarily coming from on the income statement? You know, is it mainly from sales rep utilization, and how are you continuing to drive this throughout the year?

Thanks. I feel like at a really high level, the leverage that we're going to get this year is about the extra sales growth versus what we were expecting. You see the guide here has changed, I think, from 2-12, the last time we spoke to you guys in February, and here we are now at a 2-15 for the whole year. And then buried inside of that is we've lost some to the dollar, the strengthening of the dollar. So I think that's a little bit mostly where the leverage is coming from in the P&L. And then also the gross margin, we were coming at you last time with a 68% gross margin. We're starting to feel a little bit more comfortable about our gross margin. And so we're giving you the 68.6 now for the year instead of the 68.0. As we were preparing our guidance and everything, we kept off expenses exactly the same.

And Danny, I would say on the gross margin piece, we beat a little bit in Q1 by 10 basis points or so. And FX is actually hurting us by about 0.2, 0.3% since our last guide for the rest of the year. So the 0.6 increase that you're getting on gross margin is actually closer to 1% maybe or so. And part of that, I think, is because when we did guidance last time, we thought ASPs were going to be in the 6% or 7% range. Maybe they're more like the 8% or 9% range. And so there's nice tailwinds there. And then those pieces we were talking about earlier in terms of direct labor efficiencies and quality costs and all that helping us as well in the second half.

I hope that gets to your question, Daniel.

Yeah, that was great. And then just one follow-up more along the lines of revenue guidance and cadence in the back half. Typically, three Q steps down from two Q. Are you still expecting that normal seasonality, or could that be a little more modest from what you're seeing given the strength thus far and what you've got it to? I know you have some pretty tough comps in three Q and four Q, so I just wanted to get your thoughts on your confidence in second half sales growth as you sit here today.

Yeah, so, you know, when we do guidance, we sit in the room for two days basically going through all this stuff on each of the lines, and sales is obviously the number one driver. And so I would say we look at that from a lot of different angles. Seasonality is certainly one of those, and Q3 is generally sort of the weaker quarter of the four quarters, particularly in Europe as folks go on vacation and go to the mountains and the beach and all that kind of good stuff. So I would say, yeah, you would expect that cadence where Q2 would be higher, Q3 would go down, and then Q4 would come up and maybe feel a little bit more like Q2-ish sort of thing. If you do that by day, you wind up getting some pretty sales per day. You get some pretty logical answers there. And if you look at it percentage-wise through the quarters, I think you get some good answers there. There is an FX topic. that's hurting us as we go through the rest of the year. And certainly since last guide, I think it was like $1.1 million or so that FX has gone against us. So our increase in guide is actually, you know, maybe a little bit more robust than it seems. We beat by what, 1.7, 1.8 in Q1. And now we're given an extra, you know, up to 3 million. And then really it's up to 4, 4.2 million because of that FX piece. So I think we're signaling that we feel more confident about the sales answer, driven by ASPs and hospital cases and some of the good results in these individual product lines, as well as the geographies that we talk about, Thailand and Korea and other places that are sort of popping up and doing well also.

That's great. Thank you for the questions, and congrats on the great quarter. Thanks, Daniel.

Thank you. Our next question or comment comes from the line of Michael Sarkone from Jefferies. Mr. Sarkone, your line is now open.

Hi, good afternoon, and thanks for taking my question. Just like Art, you know, the ASPs that you're getting, 8%, I think JJ said, you know, this year now you're expecting closer to 8% to 9%. Really impressive. Just wanted to get a feel for How sustainable you think that level of price taking is as we look beyond 2024?

Right. So, Michael, I try to make a real point of not guiding past Q4 of 24 here. But in sort of answer to your question as much as I can, I feel like we're in about the sixth inning in a nine-inning baseball game. People have been asking this question a lot, and we've come back to that. We're in the sixth inning of these price hikes. All right, great.

That's helpful. Thank you. And just a question around the ERP system you've talked about. You mentioned real-time reporting, financial processes, and more sophisticated analytics. I was wondering if you could speak to, you know, does this help at all boost Salesforce productivity in any way? And then on the expense side, are you going to be able to ring any expense efficiencies from some of the analytics you may be getting from the ERP system?

So it's a great question. And it's a big project in Burlington, even though it doesn't really poke out too much on calls like this. We have this very strong belief that better accounting leads to better decisions everywhere in your business. So the answer to all of your questions yes we probably can watch the sales folks more closely and yes we can ring some efficiencies out of the operations you know we've never installed the program this big we were still on sort of what I'll call a junior varsity platform until until February of this year so this is a big switch for us we're really excited about it we all feel strongly that better accounting will lead to better decisions and better results for the company Mike as an example our analytics tool is homegrown and the analytics

Tool is homegrown by our IT folks who did a phenomenal job and it does a really nice job of getting data to folks quickly and slicing and dicing. But there's an even better answer out there that Microsoft has been working on for the last 20 years. And so eventually we'll replace that analytics tool and it'll pump out even more sophisticated data and make it easier to get just one example of how it might benefit us in the future.

That's helpful, JJ. Thanks. Yeah, I was going to say it's impressive. There's no shortage of companies that have Salesforce or commercial disruptions while they're implementing large ERP systems. Just one last one for me that I'll squeeze in. Could you just give us an update on how things are going with Zio and how you're thinking there?

Hey, Mike, it's Dave Roberts. Sure, happy to. In Q1, we did about 1.25 million sales of the ZIO, which was right at the guidance, but sort of performed where we expected. That was down from the 1.5 million in Q4. And we don't really guide on the product line going forward, but It had a good April, so we'll see where it comes out. But I would say at a high level, it's a little bit under what we expected when we signed the deal a year ago, but not too far under. And Q1 was the first quarter where a deal was on the Lomate Reps Commission plan. So it's still sort of early days at the moment.

Got it. Thank you. Thanks a lot for your questions.

Thank you. Our next question or comment comes from the line of James Sidoti from Sidoti and Company. Mr. Sidoti, your line is now open.

Thank you. This is Alex on for Jim. Congrats on the quarter and thanks for taking questions. A couple of quick ones for me. We spoke about GLPs, you know, and the effect on cardiovascular event reductions in the fall. sounded like there wasn't a meaningful effect. I just wanted to check in on that and see if that still helped.

Yeah, okay. Hey, thanks for your question, Alex. It's George. We have not seen anything, and the whole sort of thing kind of came and went for our perspective, sort of as a Wall Street brouhaha. We feel comfortable that our business proceeds with or without GLP, so no effect up here.

Thanks for the update. Appreciate it.

And I wanted to check in on the manufacturing operations. I think you guys had spoken about thinking of adding an additional shift or opening up another facility maybe in Burlington. Just wanted to check in on how you're thinking about that these days.

Hi, Alex. Yeah, okay. So it's a bit of an old topic in some ways, which is we did this project called Small Ball about a year and a half ago. And instead of renting a new building, what we did is we went into one of our buildings, we carved out another 50% of clean room space. And that's online maybe about 12 months ago or so. And then we went and hired a lot of people for that. And we also hired a second shift. I would say, you know, in a hopeful analysis, the better gross margin here is a little bit impacted by all that, but not exactly. So, yes, we have a much bigger floor plate for manufacturing. And we also have second shift now. There's really no constraints to manufacturing up here. I switched the topic a little bit. You didn't ask about this, but maybe we talked about it a little bit. But in Chicago, where we process our allograft, we felt a little production constrained out there. And we've been adding bodies and resources out there recently. And we seem to be turning the corner on some production issues out there. So we're excited about that. That might lead to more allograft growth

going forward but we shall see and we don't really guide by product line so thank you yeah i appreciate the clarification there a lot of good questions today and that's all from us thank you thanks a lot alex thank you our next question or comment comes from the line of brooks o'neill from lake street capital markets mr o'neill your line is now open this is aaron on the line for brooks um congrats on the great quarter

Did you mention what percentage of the Q4 sales growth was related to price versus volume? More specifically, you know, how that was sort of split? And then maybe just in addition to that, any thoughts around changes within this split moving forward throughout the year, if you have that info?

Yeah, and you want Q1 or Q4? Sorry, Q1. Okay, yeah, Q1, 8% price, 3% units. And we're trying not to guide for the whole year. We don't quite know, but maybe that's the answer about we're in the sixth inning of price hikes. Maybe we still have some to go with that.

And if you want a little more color on that, the heavier hitters in terms of ASP increases this quarter were Artographed and RestoreFlow and some of our catheters and OmniFlow. And if you thought about it last year, it was more of Valvulatomes and Shunt. It was more of a broad-based ASP increase this year, in Q1 anyway. We'll see what happens as we go forward.

Okay, gotcha. That's helpful. And then back to the sales reps. You know, you mentioned you plan to hire a few more this year. You know, I'm assuming that the reps that you have hired in the past and getting them properly trained has been a bit challenging and maybe time-consuming. How have you sort of approached this, and would you say that you're starting to see some tangible benefits in that aspect?

I would say I generally feel like we haven't changed that much in how we train them over the years, so there's been no gap between old reps hired and new reps hired. You're right to point out, though, Ed, that it is a time-consuming project. I would say we have never been the number one trainer for medical device companies in the United States. To sort of get at this right now, we actually have a job requisition open and being filled for a sales trainer, a dedicated sales trainer, and that'll be the first one that we've had in, it feels like, five or nine years here. So there's some hope that we can sort of close down on that gap or that area of opportunity at the company.

Gotcha. I appreciate that, Collin. And again, congrats on the quarter, guys. Thanks a lot, Ed.

Thank you. Our next question or comment comes from the line of Brett Fishman from KeyBank, Mr. Fishman, your line is now open.

Hey, guys. Thanks very much for taking the questions. Follow-up on Artographed. It's been a very successful acquisition just considering the U.S. performance. You mentioned a bunch of potential new markets and understand it's still very early in that process. But curious how you're looking at that opportunity from a TAM perspective across the markets that you're looking to launch in. Maybe just understand it's still like more than a year out, but maybe like a directional range of outcomes if those launches are in fact successful.

Yeah, Brett, that's a fantastic question. We think about this and we talk about this a lot. Maybe if I limit my comments to Europe, it's easier. Europe being sort of 50% of the rest of the world besides the U.S. and Canada. You'd love to say, oh, it's exactly, Europe is, you know, half this, let's say it's half the size of the U.S. You'd love, financially, let's say, you'd love to say, oh, it's half of that. Then I'd cut that in half again for one reason, which is, in Europe, they don't use as much PTFE and prosthetic implants in AV access cases as we do in the United States. It's a little bit of a different practice pattern by the vascular surgeons over there. So if you took our 33 of revenue in the U.S., let's say that's kind of full, although we still plan on growing that, but let's take 33 in the U.S., you go to 16, and then cut it in half, 16 being geographically, Europe's always about half as big as the U.S., and then cut that in half again. So maybe there's an eight TAM there, and then maybe if you want to be really high level, you could say there's another eight TAM away from that in places like Japan and Korea and China.

All right. Super helpful callers.

Appreciate that. And then one follow-up on the product area. Another good quarter for Allograft, not too surprising, but the trends in carotid shunts looks like they bumped up again this quarter, I think it was 27%. Just curious maybe on what was underlying that level of growth and how sustainable that might be.

Right. I mean, it's just a fantastic story that's going on with shunts, which is The main competitor or one of the two main competitors, Bard, left the market because they were frustrated with Brussels and the whole new CE MDR thing. So they just said, we're not going to support this product line. So, you know, we're just taking all the old units from those guys. In addition, since, you know, the CE barriers have gotten higher and higher, we're taking the opportunity to put in some price changes on that product line. So you got more units because Bard left and then because Bard's gone away and there's no new competitors coming in, you probably have better pricing. So I think the number was something like 17% this year. Oh, this quarter Q1, what was it? Sorry, 27% was our up, Brett, in that. So excellent activity going on there. Despite TCAR, despite stenting and all that, it's been a fantastic run.

All right, appreciate you taking the questions and congrats on the quarter, guys.

Thanks a lot, Brett.

Thank you. I'm sure no additional questions in the queue at this time. Ladies and gentlemen, that concludes today's conference. I would like to thank you for your participation, and you may now disconnect. Have a great day.