Q1 2021 LeMaitre Vascular Inc Earnings Call
Welcome to the Mic marquee Nike one 2021 financial results Conference call I'll give reminder, today's call's being recorded at this time I would like to turn the call over to Mr. J J Pellegrino Chief Financial officer of the mice rats can I. Please go ahead Sir.
Thank you Joanna.
Good afternoon, and thank you for joining us on our Q1 2021 conference call.
With me on today's call are chairman and 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 at 1995, the accuracy of which are 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 estimates and assumptions as of today April 29 2021.
It 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 materially from those expressed or implied.
During this call we will discuss non-GAAP financial measures, which include EBITDA and non-GAAP outstanding debt.
A reconciliation of GAAP to non-GAAP measures discussed from yourselves change and the associated press release. It is available in the Investor Relations section of our website Www Dot one dot com.
I'll now turn the call over to George Let me.
Thanks J J.
On today's call I'll cover four topics.
Number one COVID-19 impact on our employees and company.
Number two rebuilding our sales force.
Three Rd graphs, the results and other biologic updates and finally number four our financial results.
New COVID-19 infections that lemaitre declined recently to date 36 of our employees have been infected with 35, having recovered in one still recovering.
We expect that the vaccination of our employees will prompt a return of more of our administrative personnel to the office.
Massachusetts has one of the lowest vaccine hesitancy rates in the country.
This will mean, a quicker return to normal for lemaitre.
Wait from headquarters the vaccines are also helping our sales reps gain greater hospital access.
We estimate that 70% of our American sales force and 100 per cent of our British sales force have received at least one vaccine shots.
And now the European and Canadian vaccine efforts seem to be turning the corner.
More vaccines for our sales reps likely means more sales calls and more sales.
As things open up we're simultaneously rebuilding our sales force.
March 31st we had 86 sales reps and we currently have 14 open rep hiring requisitions.
Our field personnel will report to us the doctors and nurses are showing more willingness to take sales calls.
Investment in our sales force also means building a larger physical presence and stocking inventory and are in more international locations.
So we're expanding our warehouse footprint in the in three geographies.
England, Milan and Tokyo.
This should create tighter customer connections and quicker order fulfillment.
Soon we'll be shipping inventory from warehouses in eight countries. The U S, Canada, Germany, Italy, the U K, Japan, Australia and China.
As to our recent acquisition, we estimate that our autograph will grow to $24 million from sales. This year due largely to the January price hike.
There's 24 million dollar figure implies 29% growth versus hospital level sales of $18 6 million in the 12 months prior to the acquisition.
Autograph has also begun to add to the bottom line contributing approximately $3 million of op income in Q1 and nine cents per share.
In January we also began paying autograph commissions to our broader U S sales force, which may increase unit sales going forward.
There were three other biologic projects to note.
First junior share was approved in Japan in Q3, 2020, and sales are ramping quickly, perhaps adding a million dollars in 2020 one.
Number two we launched restore flow cardio cardiac allograft in 2020, perhaps adding $500000 of 2021 sales and finally number three our Chinese xena share of cardiac trial succeeded in meeting its endpoints and we will be submitting our approval application to the Chinese F. D. A this june.
We expect approval in two or three years.
As for our financial results, we posted sales of $35 9 million up 17% year over year sales.
Sales were up 29% in the Americas, and 25 per cent in Asia Pac and they were down five per cent in Europe.
Sales in Q1, and restrained operating expenses contributed to robust bottom line growth.
We generated seven 9 million of op income in Q1, EBITDA of $10 5 million and EPS of 28.
All of these metrics were 83% better than they were a year ago comparisons.
With that I'll turn the call over to J J.
Thanks George.
Geographically.
We're driven by the U S up 29% largely due to autograft sales, Canada up 25% largely due to allograft sales.
And the Pac rim up.
<unk> 25 per cent due to strong export and Japan sales.
Byproduct autograph Valvulotome and then black can be catheters drove Q1 growth.
Our Q1 gross margin was $66 three per cent decrease.
The decrease of 70 basis points year over year.
The decrease was driven by a $600000 Tribeca inventory write down manufacturing.
Manufacturing inefficiencies well.
Our allograft gross margins and higher costs in the recently transferred Centel manufacturing lives.
Somewhat like our sales force our direct Labor force shrank in 2020 due to COVID-19 and we've now begun to rehiring.
Operating expenses in Q1, 'twenty, one were $15 $9 million or 2% year over year decrease.
The decrease was driven by continued cost control, including 31 fewer employees.
More than half of which were sales force related.
As George mentioned, we're now increasing the size of our sales force. We're also hiring in other areas of the company.
Operating expenses to increase in the coming quarters.
Operating income in Q1 was $7 $9 million, an increase of 83 per cent or $3 $6 million versus the prior period.
The increase was driven by a $3.3 million, increasing gross profit and lower operating expenses.
The Q1, 'twenty, one operating margin was 22%.
We estimate that autograph contributed about $3 million to Q1 operating income as the newly acquired products benefited from strong sales and improved gross margin.
We paid our debt down by $7 million from Q1, ending the quarter with $32 million in total debt.
Since June 2020, since the June 2020 acquisition, we've paid down $33 million.
We paid down the $25 million revolver first and we still have access to this facility.
We expect to continue to aggressively pay off our bank.
We ended Q1, 'twenty, one was $23 7 million in cash.
Increase of $3 2 million from December 31st.
The increase was driven largely by the $7 million debt repayment.
This debt repayment cash increased by $3 $8 billion in the quarter.
In relation to our CE marks due to the abrupt exit by our prior notified body from CE, marking in 'twenty, Inc. We needed six CE marks.
In 2020, we engaged two new notified bodies to accelerate the CE marking process.
And in February of this year, one of these notified body S. T S issued a CE mark for lifespan.
We expect S. G. Actual issue three additional CE marks next month.
Flex all carotid shunts.
True It F Street, carotid shunts and aster clips.
Together these products accounted for seven per cent of EMEA sales in Q1 2021.
We continue to work with T U V. One of our other notified body on.
On the issuance of two CE marks for Xena share and albo graft, which.
What should we expect by next month no no assurance can be EBITDA.
Together xena share and Alba graft accounted for 23% of EMEA sales in Q1, 2021.
If any of the CE marks referred to above or not reissued in may than we.
We could lose our ability to sell some of our devices in Europe.
For more information on this topic, please see our risk factors in our 10-K filed in March 2021.
Turning to guidance at the midpoint, our Q2 2021 sales guidance of 37 million to $40 million, representing an increase of 55% versus Q2 2020.
Q2, operating income guidance of 8 million to $10 million represents an increase of 85 per cent.
At the midpoint, our Q2 2021 EPS guidance of 28 to 36 cents per share represents.
An increase of 86%.
With that I'll turn it over to Joanne for questions.
Ladies and gentlemen, if you have a question at this time lease price sorry, and the number one key on your Touchtone telephone once again, if you have a question at this time you May press Star one on your Touchtone telephone please standby, while we compile the Q&A roster.
Yeah.
Your first question comes from the line of Rick Weiss from Stifel. Your line is open.
Hi, good afternoon everybody.
Nice to see the solid first quarter.
Just just.
For.
To start it off.
Maybe from two perspectives.
In the first quarter purely came in.
Hmm solidly.
Your guidance range.
Yeah.
The headwind debt.
Prevented you from perhaps reaching the upper end of your guidance and just with that thought in mind as we think about the second quarter at the lower end from the upper end help us.
Understand maybe a little better your thought.
It's less about the lower end, but what gets you to the upper end is it is it more about reopening is it more about hiring the sales force I just wanted to understand the dynamics going into two you're thinking your experience in the first quarter and you're thinking about the second thank you.
Rick Thanks for your question, it's George here and I know you're posing your question Hey, you beat your guidance by $600000, but still didnt feel as great as it could have and I think that's the essence of the question and I think you know as we were preparing for today's call. We started trying to funnel stuff down and I would say if we had issues.
In Q1, although again, we beat our guidance. So we felt great about that but if we had issues I would final it down into three easy to remember sees if you will the.
CE Mark continues as you can hear from JJ script. The CE Mark continues to dog us in that we're very close to getting them, but we haven't quite gotten them.
<unk> I think is still a real issue.
We're all watching what other companies are doing right now and some companies are breaking out of it and some companies are still mired in it I would say we felt it more strongly in Europe in Q1 than we did in the United States, but you know it was still a very present issue in January and February let's say and then the final C. We would call and I think we've talked about this a lot.
On the last call channel loading, which is in northern Europe. In Q4, we had a lot of reps trying to win a lot of contests and I think we talked about it before but we did really well in Q4, we really crushed guidance and I think it snapped away a little bit from our ability to crush guidance in Q1, So I'd like to say maybe those are the three.
<unk> sees VIX youre looking for the CE, Mark COVID-19 and channel loading and then I would like to suggest is you're looking at our guidance. There's nothing to look at in Q2 2020, that's a non quarter you've seen that with all of your companies everyone's going to report you know sales were up 60 per cent or 80% or whatever I think we're.
<unk> sales are going to be up 55 per cent, but you're really I think want to know what happens between Q1 and Q2, maybe that's the new organic growth rate for us I don't know and so going from Q1 to Q2 were up 7% and I think it's you go back to those three Steve and I think we see all of them disk.
A painting.
The CE marks again, we feel very close this thing as opposed to and May 25th and we think we're going to get five more CE marks between now and then.
Which would get get us back on track basically and.
And we feel like the vaccines, particularly in the U S and the U K, where 64% of our sales are located in those two geographies. So you get two thirds of your sales are in very high vaccine regions for COVID-19 going away quote unquote for us per sales. If you will and then finally channel loading that's going to be over it use.
As you know they sell enough stuff to win the contest they take Q1 off and then Q2, they're back at it and so probably the three CS explain what happened. If you will why did why we didn't crush guidance by more than 600000, and then maybe they also transitioning as explained in Q2 for you.
Got it that's very helpful and very clear thank you.
Okay.
Other questions.
Autograph.
Currently 3 million in the first quarter and just wanted to.
I Wonder if you could help us.
Through or contemplate how to understand there.
Just sort of go forward run rate per autograft.
Or how.
How do we think about it I mean did you have the full price increase.
Impact in the first quarter, so or no. We didn't really haven't been a Haut council profit quarter. So therefore, selling no more units in the second quarter.
It's $4 million.
I mean, how do we think about the growth in the go forward run rate sure sure and register a day for everyone with the I think in in the in the call. We mentioned, there's a $24 million number that we're putting out there for the year and it was up versus $18 six of where this is the one thing we're giving a long guide on so we couldnt be more.
We're clear about what we think is going to happen $24 million in sales, it's up about 29% I think it was a number that we mentioned in the script.
But how do we think about it I think you can we tried to as we write the script. We tried to let you guys know so far it's just the price hike and that's what it is but it was a hefty price hike. It was something like I Dunno JCR day was at 29% 27 per cent.
George who has 25 it brought us.
So it was it was it was a hefty price hike and we seem to have gotten it I will say.
One thing that you saw in Q1 was January was really light. It was oddly light and some of it may have been people adjusting to all the price hikes and wondering what to do about them.
And so that we know that we know about January being a non month really for US and then after that it gets into 24 for the whole year. We do think there's upside from here, which is also in January in addition to the price hike.
Officially put it into our broader U S sales force bag and I think before that happened Rick six reps were being commissioned the old autographs reps. If you will who are now part of our company their limit reps now, but they've looked like autograph reps in Q4, they were the only ones being commissioned an autograph and finally at five.
It's way fully into the U S bag and I think there was about 36 U S reps and five Canadian reps that he was like 42, North American reps right now, yes, 42 of which five per Canadian and 37 are our Americas. So now it's in the broader bag and we think to your question as the year goes by potential.
Where that adds to it adds to the units.
Gotcha.
Unless.
It's hard to resist asking every company.
You touched on specifically to autograph b.
Recent trends I mean January.
A challenging month for every company that has reported that bird.
So it was February March Scream for most parents.
Sharp acceleration and growth positive trends seem to be continuing into April.
The base experience is that how the second quarter is starting to you any color you can give us.
Well, okay. So I'm going to answer two thirds of your question I'm going to stop at guiding into Q2, because I think we already said we wanted to say about Q2. So and this is a continuation of a conversation you and I Rick last quarter. The month of January was down 14% organically February was down 9% organically and then in March we saw a 7% organic.
Increase so those are your three additional months to add to what we were giving you. The last time for all the cadences. That's how we came out of Q1, that's how we were emerging out of Q1 and it makes some sense because of the channel load in December for US. It made some sense to January was bad, but I agree I did hear from other people that January was.
Bad anyway, and then that's how I back into it was probably COVID-19 and it felt more like a European thing.
Got you. Thank you so much.
Thanks, Rick.
Thank you once again, if you would like to ask a question you May Press Star then the number one on your telephone keypad.
Your next question comes from the line of Matt <unk> from Keybanc. Your line is open.
Pedro understand if JJ. This is Brett on again today for Matt I think Rick hit a lot of the revenue question. So I might move down the income statement, a little bit and ask about margins. So the chicken guidance had a modest sequential gross margin left but still must down a little bit year over year. So can you walk through some of the moving pieces. There and then if you had.
Any other directional commentary on how it could progress back back to the historical range from there.
Yeah sure.
So the sequential answer sorry.
Sort of marginally as you talk about 40 basis points or so I think a S. P increase would still have a little room for growth. So you just you yuriy rack your prices on January one, but you don't get all of that in the first quarter and depending on the purchasing cycles of the customers and all that kind of stuff. So I think theres still some room to run there.
There in terms of ASP increases and so that'll help the margin.
You know maybe get some strong you know you have a strong autograft answer going and George talked a lot about that how they'll tell them seem to be doing pretty well. These days to both of those are carrying nice strong gross margins and so.
That's that's sort of on the on the <unk> side, but we've got some old manufacturing inefficiencies coming off the balance sheet debt.
Debt or hurting us from and seasonally oddly our gross margin actually tends to tick down a little bit in Q2. So those are sort of some of the dynamics going into Q2 from Q1.
Year over year, a more dramatic answer right as you mentioned down one 8%.
We had.
You know some inventory write offs from one of our product lines I talked about that in my script.
And we've got some manufacturing transfers going on particularly with the applied.
Medical devices since on Python, so those startup costs and the inefficiencies of starting a lineup.
And here in Burlington.
You can feel that for a little while so it should be a few quarters now more iron those out then maybe at a higher level you know what.
We came through COVID-19, we did are layoffs and it wasn't just in sales in other areas. It was in manufacturing as well so we laid off.
Some direct labor folks and I think that made us a little less efficient and those efficiencies sort of sit on the balance sheet for a while and then come through to the P&L and we're feeling that now so to the extent that we hire back up.
And that direct Labor force, which we're doing you should get some benefits from that moving forward.
Alright. Thanks, Thanks for that color and then moving to M&A I was wondering if you could characterize from a pipeline bookings and which areas in particular, you might be seeing more opportunity.
Yeah, Hey, Brett it's Dave here.
So.
The pipeline looks good.
Would say you know that the fortunate thing from Lemay as we've been.
Pursuing acquisitions per long time, we have a lot of targets and so we have been pursuing those I would say you know at the margin with fewer congresses and less travel maybe that cuts into the band with a little bit, but we're fortunate again, because we have a pretty broad set of targets that were per.
We're suing.
In terms of the types of targets. We're looking at of course, the center of the Bullseye our disposables in Implantables used by vascular surgeons, but I would say you know, we're starting to think a little bit more about peripheral endovascular because we've got so many customer relationships with the vast.
A surgeon and the bulk of what they do is Endovascular. These days.
Also get 10 or 12 per cent of our revenue from cardiac surgery. So you know we're looking around there a little bit we did one acquisition a couple of years ago. The admetus acquisition in that space, It's doing well. So we're looking at all as well where the theme here is low rivalry markets.
But yeah, we're out hunting and.
Sort of same as it ever was.
Alright, great, Okay, I'm going to move backwards from SaaS Walmart question.
And just one kind of important just thinking about Europe, you guys sounded pretty confident about resolving the <unk> issue, but more generally how has the macro progressing.
A couple of months and into April and is there a chance that it might be less of a headwind to overall growth next quarter. Thanks, Thanks, I'll finish with that one.
Okay as I understood. The question was how is the macro environment into Q2.
Yeah exactly exactly.
Not yet.
And Bret Thanks, a lot per your question and your questions you.
You know, we really don't we try to keep these calls limited to ending March 31st.
I don't have any particular insight to add for you about the macro environment in Q2 to be quite honest I see what I see and it's our sales and we always like to sort of wait and package. It all up as a quarter at the end of the quarter. If you don't mind, so I'm going to stick with that approach if you don't mind.
Not totally fact, sammy thanks very much.
Thank you. Your next question comes from the line of Bank debt Persimmon from Lake Street Capital. Your line is open.
Hey, Thanks for taking my questions I wanted to ask more specifically about the 14 reps you guys are looking to hire can you just remind us of the expected training time once those come on board and more specifically I'm trying to understand a little bit better if those come in come on in the second quarter what quarter do you expect those to start contributing.
Sales as we start to see autograph trend forward and then the macro backdrop improved and a bolus of new sales folks coming on line and ramping I feel like we could have some significant growth. So just wanted to get a little better understanding on that front.
Okay, Frank It's George I'll start I'll try to handle that question. So theres 14 reps being hired eight of them are in the U S and I would I would think they will all be hired by the end of the quarter and if you wanted to pick a median hiring date I sort of was.
It was drawing down.
June 5th or something like that is a median hiring day and then the question on Theres American reps is how how quickly they come up to speed.
Quite honestly, we've been answering this question for as long as we don't publicly traded company I'm no closer to answer some of them are up and running in a month and you can feel it and some of them never get up and running if you wanted to pick a number I would say roughly six months keeping in mind that most medical device sales reps in our experience they.
They don't last that companies more than three or four years. So they do have to get up to speed pretty quickly and most of them do let's call. It six months on the international side, where there are six.
Being hard I feel like things just happen more slowly in Europe for hiring you have to give your notice then you've got to work two months of the old job and so on so forth. So maybe you could say median hiring date for those six would.
Would be I don't know something like July one or something like that or maybe even deeper into July and I would give them. The same amount of time to ramp up the turnover rate with international reps is always a little bit lower I know you didn't ask this question, but they do tend to last a little longer and but I would say the ramp up time is about the same I wouldn't I wouldn't.
Distinguish.
Great and then secondly on the balance sheet you guys have been very aggressive about paying down the debt outstanding roughly cut in half over the last three quarters.
If we're thinking about this looking forward my assumption is the continued aggressive pay down will progress through the end of this year is it safe to say that the same clip of cutting and a half and three quarters as well.
Flip you'll run out assuming you keep on generating operating cash flow.
Yeah. This is J J. Thanks for the question.
I think if you look at how we've done this over the last three quarters, you know that the.
Our story is changing a little bit we paid down.
$4 5 million in Q3, and then 21 and a half or so in Q4 and then seven this quarter.
And that kind of mirrors with our op income number we were sort of you know in the <unk>.
Pre COVID-19 in the fives range sort of op income per quarter, and then we were in that sort of 10 range op income reported for Q3 and Q4 when sales came back and expenses were a little slower to come back and so that produced a little more profitability and allowed us to pay down more debt.
And so I think our EBITDA this quarter was 10.2 or 10 point for something like that.
And you know our op income number and so we're normalizing a little bit, but we're still quite profitable. So we'll use that cash to pay down the debt I don't think it feels like it did in Q4.
Maybe it feels a little bit more like like we just did in Q1, we will see how that goes going forward.
Perfect makes sense, thanks for taking my questions.
Thank you thanks, Brian Nick Thank you.
Your next question comes from the line of Mike <unk> from Barrington Research. Your line is open.
I somehow managed to actually missed the autograph revenue number I heard the op income number about three different times, but what was it that what was the revenue number.
24 million for this year coming off of 18.6, no I'm, sorry, sorry, I meant for the Q1.
5.83.
Great.
Got it.
Okay.
And then.
Yeah, I'm, sorry, I I got half of what was the issue around gross margin I heard manufacturing inefficiencies 600, K write off associated with try back towards the other items you pointed out there.
So you're looking for what went on with gross margin in the quarter Europe year over year kind of thing Yep Yep, Yeah. So so Mike FX actually helped us 1% kind.
Stand up and close them.
Yep Yep.
Thank you sorry, theyre trying to come in and clean My office Mike.
So FX helped about 1% year over year it was.
Not insignificant you answered D E. S. P increases were important to more than 1.5%.
And then.
Mix from Valvulotome, south with strong Valvulotome quarter.
And some of the things that are a little lower in gross margin were a little lighter in the quarter.
So that there was sort of a back and forth there and mix but.
Importantly, we have that right off of our Tri mix.
Inventory about $580000 from that product line, just doesn't from performing very well since the capital equipment.
Weighted product and so we we wrote off a bunch of those pieces of the capital equipment and we'll see how that goes going forward.
Okay.
Of course, if you've been able to quantify it.
Sort of the hassle of getting the CE Mark issue.
Tempting to put it to bad debt.
Do you have a estimate of what that's costing them.
This is George Mike quite honestly, that's a fantastic question I don't think we put that together I can tell you it's been extraordinary.
Time, you need to go back to them, you've got to fill out of another form and do another clinical trial and this and that but it's been an exceptionally tough number Jay maybe any any way we can get at that look at the R&D here from Mike It's inside the R&D number Mike Okay. So we're still living at 8% of sales.
Being R&D based and this is inside of that number but breaking that down it's not something we usually do we're not trying not to do it but I can tell you its been exceptional and I can also tell you that when we achieved these five more CE marks I think you can expect some amount of relief on that although maybe.
The next the next place everyone goes there's not these mgd's. That's the old version that ends on May 25th that's the old CE approval, but wherever one else then goes after that's over is the M. D. R's. This is the new European system of marking your medical devices and therefore, there's expenses out.
There as well, but but I think it will slow down a little bit is my broader point I don't I can't give you that number if you wanted to try and quantify it Mike.
Greg Greg Glenn we're sort of used to be in the million dollar range and then it wasn't it wasn't.
I'll have to see it pop up to a million three and even 2 million last year.
Per quarter.
And so I can't say, it's all attributable directly to the piece, you're asking about certainly largely.
So there's there might be a half a million a quarter to a $1 million a quarter of them stuff going on in and around that topic incremental.
Yeah, Mike This is day if theres another concept when you talk about cost. We're obviously focused on operating incremental operating expense, but of course another cost is.
The products that have CE, mark switches lapsed some of them have derogations than we have had some sales decline a little bit from those and so there's a cost in terms of lost sales and lost profit as well as just another qualitative bucket.
Okay and enter into push on that point, even further there is upside here because we've had sales punishment for the last nine months or so the derogation of a CE Mark is nowhere near as effective as an actual CE mark. So we believe once we get these there could be something good happening after that.
We baked a little bit of it into Q2, but since this is a may 25th events in Q2. It doesn't all come to bear in Q2, maybe one could look for that later, although of course, we're not guiding on Q3 or Q4, right now given COVID-19 right.
Gotcha.
George maybe educate me and possibly some other people so they can assure in China. Congrats on the meeting the endpoints and now.
What happens between June of this year and two to three years from that point.
Is there anything you can do to sort of.
Sort.
Sort of build that product's reputation in China in the meantime, or does it just kind of Sip.
Yeah. So what happened yeah, I suppose you could you know you're not supposed to market medical devices without an approval, but you could talk about the concept that we filed the clinical trial you know we haven't even got that far I think we've been in such and such a mad rush to get to the trial.
Fully subscribed into finish it and we're so happy that the endpoints were met and everything was successful and again in a month, we're actually going to go to the C. F D. A and give them a 10 foot high stack of papers about the clinical trial and then you got two or three years to wait. This has been a you've been following the company for a long time now Mike and this has been a.
You've heard about this one for a long time I think start.
Start to finish this is in the six to eight year land.
From when we started this whole thing when we're actually be selling it so.
Yes, we're just real focused on getting this thing to the FDA and then maybe to your point, we start thinking about how do we saw from the soil for the launch two years from now right right. Okay great.
And then the only other question I had is just in terms of the insurer for the.
For the quarter or was that flat down what was the what was the what was the.
Our performance in Q1, I think it was down 4% trending in line with the company.
And does it is worth noting again here, we've got something really good going on in Japan, right, now, which I mentioned in the script, but it just started in Japan, and we're already feeling comfortable enough to be on the call, saying, we've got a million dollar product line in Japan. This year. So I think that's going to help.
Lost some sales as you can steal from xena share of Europe, it's been painful over there that's been the that's the main thats. The main attraction in this English in the CE in the CE thing and so we've lost some sales we hope that will come back at some point, but in short answer to your question that it was minus 4% in Q1, and Dave or JJ could correct me if there's anything different.
I think it was minus five.
Right.
Yep.
Well guys.
Thanks and congratulations.
Let's start to the year. Thanks.
Thanks, a lot Mike.
Okay.
Thank you speakers there are no my question cash at this moment do you have any closing remarks.
No. Thank you I think we're all set thanks for running a simple.
You're welcome and ladies and gentlemen that concludes today's conference call I would like to thank you for your participation. You may now disconnect have a great day.
Sure.
[music].
Yes.
Okay.
Sure.