Q1 2024 LeMaitre Vascular Inc Earnings Call
Operator: Good day, ladies and gentlemen. Welcome to the LeMaitre 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 LeMaitre Vascular. Please go ahead, sir.
Good day, ladies and gentlemen, welcome to the Lemaitre vascular first quarter 2024 financial results Conference call.
Joseph P. Pellegrino: 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 Lemaitre.
Operator: Please go ahead Sir.
Joseph P. Pellegrino: 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 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 Security Litigation Reform Act of 1995, the accuracy of which is subject to risks and uncertainties.
Joseph P. Pellegrino: Thank you operator, good afternoon, and thank you for joining us on our Q1 2024 conference call with me on today's call are our CEO, George Lemaitre, and our President Dave Roberts.
Joseph P. Pellegrino: Wherever possible, we will try to identify those forward-looking statements by using words such as believe, expect, anticipate, pursue, forecast, and similar expressions. However, our forward-looking statements are based on our estimates and assumptions as of today, May 2, 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.
Joseph P. Pellegrino: 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 $19 95.
Joseph P. Pellegrino: 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 are forward looking statements are based on our estimates and assumptions as of today may <unk> 2024, and should not be relied upon as representing.
Joseph P. Pellegrino: Our atherectomy views on any subsequent date.
Joseph P. Pellegrino: Please refer to the cautionary cautionary statement regarding forward looking information and the risk factors in our most recent 10-K and subsequent SEC filings.
Joseph P. Pellegrino: Including disclosure of the factors that could cause results to differ materially from those expressed or implied.
Joseph P. Pellegrino: 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 AP release, and is available in the Investor Relations section of our website, www.lemaitre.com. I'll now turn the call over to George LeMaitre.
Joseph P. Pellegrino: During this call we will discuss non-GAAP financial measures, which include organic sales growth operating income operating expense and EPS, excluding special charges.
George W. LeMaitre: A reconciliation of GAAP to non-GAAP measures as discussed in this call is contained in the associated press release and is available in the Investor Relations section of our website Www Dot one dot com.
Joseph P. Pellegrino: I'll now turn the call over to George Colony.
George W. 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 chunks 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%.
George W. LeMaitre: Thanks, J J Q1 was an excellent quarter with 14% sales growth of 68, 6% gross margin and 62% EPS growth.
George W. LeMaitre: We posted record sales for each of our three geographies and nine of our 12 product categories.
George W. LeMaitre: Focus my remarks on the top line, our sales force and some regulatory updates.
George W. LeMaitre: Allografts were up 31% in Q1, bovine patches, 13% and carotid shunts, 27%.
George W. LeMaitre: APAC was our strongest region up 44% in Q1, driven by $600000 of Q1 sales growth from our new sales offices in Korea and Thailand.
George W. LeMaitre: EMEA sales were up 17%, while the Americas were up 10%.
George W. LeMaitre: Notably, Canada was up 31% in the UK was up 29%.
George W. LeMaitre: 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 in APAC, it is $700,000. We also continue to add international sales... Last Monday, we had a ribbon-cutting ceremony at our new Paris sales office. France is our sixth largest country.
George W. LeMaitre: We ended Q1 with 137 reps, including 62 in North America 52 in Europe and 23 in APAC, we expect to have a 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 one.
George W. LeMaitre: And APAC is $700000.
George W. LeMaitre: We also continue to add international sales offices.
George W. LeMaitre: 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 30th. 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.
George W. LeMaitre: Monday, we had a ribbon cutting ceremony at our new Paris sales office.
George W. LeMaitre: France is our sixth largest country.
George W. LeMaitre: Opening this office should improve our connections with France, surgeons and hospitals as well as our <unk> sales reps.
George W. LeMaitre: We've experienced a strong link between opening an office in sales growth.
George W. LeMaitre: The conference might be next.
George W. LeMaitre: We seem well positioned for the 2027, MTR CE Mark deadline.
George W. LeMaitre: Based on recent discussions with our notified bodies, we now expect to receive an additional 11 MTR CE marks by September 30.
George W. LeMaitre: In total we should possess 14 of our 22 <unk> by the end of the third quarter and we expect to receive the remaining eight approvals by the end of 2025.
George W. LeMaitre: Our autographed CE mark filing was made in December 2023. When we acquired AutoGraft in 2020, it was cleared for sale only in the U.S., so receiving European approval would be a nice opportunity for our largest U.S. product line. We sold $33 million of autographs in the U.S. in 2023. We now believe that the autograph will receive its CE mark by Q4 2025. In the meantime, we're also submitting autographs for approval in Canada, Australia, Japan, Korea, Thailand, and Singapore.
George W. LeMaitre: Our autograph CE Mark filing was made in December 2023.
George W. LeMaitre: When we acquired Autograft in 2020, it was cleared for sale only in the U S.
George W. LeMaitre: Receiving European approval will be a nice opportunity for our largest U S product line, we sold $33 million of autograft and the U S. In 2023.
George W. LeMaitre: We now believe that autograph will receive a CE marked by Q4 2025.
George W. LeMaitre: In the meantime, we're also submitting autograft for approval in Canada, Australia, Japan, Korea, Thailand and Singapore.
George W. LeMaitre: 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 MDR-CE marks but rather individual approvals by each country's Human Tissue Authority.
George W. LeMaitre: Separately, we continue to pursue allograft approvals in Ireland and Germany.
George W. LeMaitre: We believe that one of these approvals will happen in 2024 and another one in 2025.
George W. LeMaitre: These are not MDI, CE marks, but rather individual approvals by each country's human tissue authority.
George W. LeMaitre: 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.
George W. LeMaitre: To conclude Q1 was an excellent quarter with 14% sales growth of 68, 6% gross margin and 62% EPS growth.
JJ: Believe our profitability and cash balance provide a strategic optionality.
JJ: I'll turn the call over to J J.
Joseph P. Pellegrino: 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.
JJ: Thanks, George we continue to apply pricing for some more geographies and more devices pricing floors are possible because of our high quality differentiated devices selling into niche markets.
Joseph P. Pellegrino: The average selling price increased 8% in Q1 2024, while units increased 3%. This follows our full year 2023 ASB 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 allograft manufacturing group had a strong Q1, and in Burlington, quality costs remain in check.
JJ: Average selling price increased 8% in Q1 2024 units increased 3%. This follows our full year 2023, ASP increase of 12% and unit growth of 5%.
Joseph P. Pellegrino: In Q1, 2024, we posted a gross margin of 68, 6% up 3300 basis points year over year, the increase was driven by higher asps and productivity improvements.
Joseph P. Pellegrino: Specifically, a more efficient manufacturing team continues to benefit the P&L.
Joseph P. Pellegrino: In Chicago, our Allograph manufacturing group had a strong Q1, and then Burlington quality costs remain in check.
Joseph P. Pellegrino: 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 Q1 2023. The increase was driven largely by more employees, including 12 more sales professionals.
Joseph P. Pellegrino: Average selling price increases improved the gross margin by approximately two 5% in the quarter and our guidance calls for a 68, 6% gross margin for the full year.
Joseph P. Pellegrino: Operating expenses in Q1, 2024 were $24 8 million, an increase of 8% versus the Q1 2023.
Joseph P. Pellegrino: Increase was driven largely by more employees, including 12 more sales professionals.
Joseph P. Pellegrino: 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.
Joseph P. Pellegrino: The 8% increase compares favorably to our 20% adjusted operating expense increase in the full year of 2023 and reflects our shift from coast covered rehiring to a more restrained hiring posture in 2024.
Joseph P. Pellegrino: 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.
Joseph P. Pellegrino: EPS was <unk> 44 in the quarter up 62%.
Joseph P. Pellegrino: 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.
Joseph P. Pellegrino: The increase was driven by cash from operations of $5 million. Separately, our new ERP system went live in the U.S. 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 $7-10 million, and the annual P&L impact will be about $1 million.
Joseph P. Pellegrino: Separately, our new ERP system went live in the U S. In Q1 2020 for the system should improve real time reporting.
Joseph P. Pellegrino: Dreamliner financial processes and provide more sophisticated analytics.
Joseph P. Pellegrino: Implementation at our overseas entities will take place in 2025 and beyond.
Joseph P. Pellegrino: This project should cost seven to $10 million to $10 million.
Joseph P. Pellegrino: And the annual P&L impact will be about $1 million.
Joseph P. Pellegrino: Regarding guidance, we are forecasting improved operating leverage in 2024 driven by restrained operating expense growth and an improved growth 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%. For the full year 2024, guidance has been 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.
Joseph P. Pellegrino: Regarding guidance, we are focused forecasting improved operating leverage in 2024, driven by restrained operating expense growth and an improved gross margin.
Joseph P. Pellegrino: Our updated guidance includes an operating margin of 22% in 2024 versus 19% in 2023 and 17% in 2022.
Joseph P. Pellegrino: For more details please see today's press release, but a few Q2 highlights include.
Joseph P. Pellegrino: Sales growth of 10% gross margin of 68, 6% and EPS growth of 31%.
Speaker Change: And for the full year 2024 guidance has increased.
Joseph P. Pellegrino: <unk> sales growth of 11%.
Joseph P. Pellegrino: Gross margin of 68, 6% and EPS growth of 33%.
Speaker Change: With that I'll turn it back over to the operator for questions.
Operator: Ladies and gentlemen, if you have a question or comment at this time, please press star 1-1 on your telephone keypad. If your question has been answered or you wish to remove yourself from the queue, simply press star 1-1 again. Once again, if you have a question or comment, please press star 1-1 on your telephone keypad. Please stand by while we compile the Q&A round. Our first question or comment comes from the line of Rick Wise from Stiefel. Mr. Wise, your line is open.
Speaker Change: Ladies and gentlemen, if you have a question or comment at this time. Please press star one on your telephone keypad.
Operator: If your question has been answered or you wish to remove yourself from the queue simply press star one again.
Operator: Once again, if you have a question or comment please press star one on your telephone keypad.
Frederick Allen Wise: Standby, while we compile the Q&A roster.
Operator: Our first question or comment comes from the line of Rick Wise from Stifel. Just a Weiss your line is open.
Frederick Allen Wise: 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.
Operator: Okay.
Frederick Allen Wise: George maybe.
Frederick Allen Wise: First I guess I must say in fact.
Frederick Allen Wise: The proverbial congratulations on another excellent quarter.
Frederick Allen Wise: Thank you.
Frederick Allen Wise: To start off with the questions.
Frederick Allen Wise: 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. Is this territory splitting, or will you start opening new areas? Just some larger perspective there. Thank you.
Frederick Allen Wise: Let's let's focus on our sales force.
Frederick Allen Wise: Said, you're at 137 still hoping to get to 150 by year end.
Frederick Allen Wise: 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.
Frederick Allen Wise: You're sort of aiming more in the U S is this territory splitting or or you start opening new areas.
George W. LeMaitre: Sure, sure. Thanks for the good question, Rick. Yeah, it's been a little bit slow. I think in your question, you're pointing that out.
Speaker Change: Some larger perspective, there. Thank you sure sure thanks for the good.
Rick: Rick Yes.
George W. LeMaitre: 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.
George W. LeMaitre: A little bit slow probably inside your question Youre pointing that out 136 136 of the last couple of quarters. Now 137, we have 14 open on the board that had 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.
George W. LeMaitre: 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 are one or two in Europe and one or two in Asia right now.
George W. LeMaitre: The opening up some new expansion territories and to the to your point and also from the scripts, we're definitely hiring in North America almost exclusively there was one or two in Europe, and one or two in Asia right. Now so no I think we will get there.
George W. LeMaitre: So no, I think we'll get there. You know, it's still, we still have eight months left in the year to get there. And you know, 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 it, 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 U.S. are at that size now. Gotcha.
George W. LeMaitre: It's still we still have 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 dollar average size.
George W. LeMaitre: We have <unk>.
George W. LeMaitre: Sort of rule of thumb inside eliminate that want something gets that big you probably should split it in half and on average all of our all of our territories in the U S are at that size now.
Frederick Allen Wise: 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 this just volume, is it mix?
George W. LeMaitre: Gotcha.
JJ: Hey, Jay a question for you on gross margin thanks for.
JJ: The detailed color on the breakdown.
JJ: On the price contribution maybe talk to us about the productivity side.
Frederick Allen Wise: Is there something happening that should drive, in addition to price and volume, expanding gross margins maybe longer than we're appreciating?
Frederick Allen Wise: Is this just is it volume is it mix.
Frederick Allen Wise: If there is something happening that.
JJ: Should drive in addition to price and volume.
Frederick Allen Wise: Expanding gross margins maybe longer than we are appreciating.
Joseph P. Pellegrino: The sort of three things were average price increases, DL efficiencies, and quality costs. And I would expect those to continue as we go through the year.
JJ: Yes, I would say it's.
Frederick Allen Wise: Sort of three things.
Joseph P. Pellegrino: Average price increases the Dl efficiencies and quality costs and I would expect those to continue as we go through the year.
Joseph P. Pellegrino: Yeah, 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.
Joseph P. Pellegrino: Yes.
Joseph P. Pellegrino: 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 and gross margin were quality costs have gone have added about four or five points of cost just on our gross margins over the last four or five years and we feel like we have to.
Joseph P. Pellegrino: Kind of put a top or ahead on that and it feels like we've got that in control and it's not going to get it's not going to get worse and in terms of the price increases Rick I would say those are probably adding to two 5% of the gross margin. So if we get an eight or 9% price hike in a year, it's probably adding something like that so a really nice tail.
Joseph P. Pellegrino: 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.
Joseph P. Pellegrino: 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.
Joseph P. Pellegrino: Wind.
Joseph P. Pellegrino: And then the direct labor efficiencies piece, that's the story.
Joseph P. Pellegrino: Hiring manufacturing folks post Covid, and then that process was kind of a 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 add travel training folks and so as we got through that those manufacturing efficiencies I E.
Joseph P. Pellegrino: Direct labor folks being in there 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 the P&L and I think we're seeing that those sort of three favorable trends happening through the rest of the year as well.
Joseph P. Pellegrino: Gotcha.
Speaker Change: And maybe just a last one from me for now.
Speaker Change: I mean, there's so much to choose from here, but.
Joseph P. Pellegrino: I am really struck by the incredibly impressive.
Joseph P. Pellegrino: 44% in Asia Pacific et cetera, opening new offices in France.
Joseph P. Pellegrino: The new product approvals and rollout.
Speaker Change: Talk to us about the sustainability of the kind of growth, we're seeing and I mean.
Frederick Allen Wise: Gotcha. And maybe just the last one for me for now.
George W. LeMaitre: 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, new product approvals, and rollouts. Talk to us about the sustainability of the kind of growth we're seeing. And I mean, is there any upside from here? Just any incremental perspective there, George, would be welcome. Sure. Thanks for the great question, Rick.
Speaker Change: Sure. Thanks, Thanks, So great question Rick.
George W. LeMaitre: Sure. Thanks for the great question, Rick, and I appreciate how you phrased that. I think, particularly in Asia Pacific, 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.
George: And I appreciate how you frame that I think particularly in Asia Pac what youre seeing over here in the last five years is a repeat of what we did in Europe back in I'm going to call it that.
George W. LeMaitre: 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 is China, actually. We started not using the word China on these calls because things have been so delayed with the regulatory, but operationally and organically, it's going crazy. It's going great.
George W. LeMaitre: We started not using the word China on these calls because things have been so delayed with the regulatory but operationally inorganically, it's going crazy, it's going great. We had a 92% quarter in Q1 in China.
George W. LeMaitre: 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 ArtoGraft, really big product lines for us in the U.S. The number one product line is ArtoGraft, and then RFA is not that far behind, or Allograft, sorry. These two words are very close.
George W. LeMaitre: ArtoGraft 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.
Operator: Thank you. Again, ladies and gentlemen, if you have a question or comment at this time, please press star 11 on your telephone keypad. Our next question or comment comes from the line of Saraj Kalia from Oppenheimer. Sir, your line is open.
Suraj Kalia: Good afternoon, everyone. George, can you hear me all right? I can, Suraj. Perfect. So, gentlemen, congrats on a nice quarter. George, forgive me for shuttling between many calls. Did you talk about valvulotome 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.
Suraj Kalia: Good afternoon, everyone. George can you hear me all right.
Suraj Kalia: Of course, of course, we didn't bring it up. Valvatomes were up 2% in Q1. Last year was a much bigger growth number. Maybe if I could say... so typical, but we had a really tough comp in Q1 to beat up on for valvatomes, 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 valvatomes, this year is not quite as nice, but there should still be a little bit of growth with valvulatomes.
Suraj Kalia: Got it. Fair enough. The other thing, George, in terms of price impact on the quarter and what should we think about average sales rep tenure versus a year ago?
George W. LeMaitre: Interesting. We haven't really discussed that much in the preparation 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.
Suraj Kalia: Got it. And George, one final question. Obviously, there's been a large strategic move 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 see it, and what we should think about as the year progresses. Thank you for taking my question.
David B. Roberts: Hey Suraj, it's Dave. If you don't mind, I'll jump in.
David B. Roberts: You know, you mentioned the multiples; you're probably referring to Jan J. Shockway and the roughly 18 times 2023 revenue. That was obviously a huge announcement in our space. I would say, you know, we're always cognizant of valuation. That was a very high valuation. There's another lower one, Advanced Medical Solutions bought a division of, bought Peter's Surgical in Europe for less than two times sales. So, you know, valuation always depends on what you're buying.
David B. Roberts: Of course, I think, I read your reports, and I see small cap MedTech valued around four to five times sales. So, I mean, we are, I'd say we are very, we do focus on valuation a lot. 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 in revenue.
David B. Roberts: 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 or something a little bit larger that we're talking to, but, you know, things come and go. So, I guess I'll leave it with that, unless you have a follow-up. Nope, that should be.
Suraj Kalia: Nope, that should be good enough. Gentlemen, thank you for taking my question and congratulations.
Operator: Thank you. Our next question or comment comes from the line of Daniel Stauder from Citizens JMP. Mr. Stauder, your line is now open.
Daniel Walker Stauder: Yeah, great. Thanks.
Daniel Walker Stauder: So, I had a quick question on 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 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.
Joseph P. Pellegrino: 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 212 the last time we spoke to you guys in February, and here we are now at 215 for the whole year, and buried inside of that is that we've lost some to the dollar, because of the strengthening of the dollar.
Joseph P. Pellegrino: 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 came 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 operating expenses exactly the same.
Joseph P. Pellegrino: And, Danny, I would say on the gross margin piece, you know, we beat a little bit in Q1 by 10 basis points or so, and FX is actually hurting us by about.2,.3 percent since our last guide for the rest of the year. So the.6 increase that you're getting on gross margin is actually closer to 1 percent, 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 percent range.
Joseph P. Pellegrino: It was actually closer to 1%, maybe or so and part of that I think is because when we did guidance last time, we thought asps, we're going to be in the 6% to 7% range, maybe they are more like the 8%, 9% range and so there's a nice tailwind there and then those pieces we were talking about earlier in terms of direct labor efficiencies and quality costs and all of that helping us as well.
Joseph P. Pellegrino: Maybe they're more like the 8 or 9 percent 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 will help us as well in the second half.
Joseph P. Pellegrino: In the second half.
Daniel Walker Stauder: I hope that gets to your question, Daniel.
Speaker Change: I hope that gets to your question Daniel.
Daniel Walker Stauder: Yeah, that was great. And then just one follow-up, more along the lines of... The revenue guidance and cadence in the back half, you know, 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 are seeing given the strength you know thus far and what you've got it to? And I know you have some pretty tough comps in 3Q and 4Q, so I just wanted to get your thoughts on your confidence in second half sales growth as you sit here today.
Daniel: Yes that was great and then just one follow up more along the lines of.
Daniel Walker Stauder: The revenue guidance and the cadence in the back half.
Daniel Walker Stauder: Typically <unk> steps down from <unk>.
Daniel Walker Stauder: Thus far and what you've guided to and I know you have some pretty tough comps in <unk> in for Keith I just wanted to get your thoughts on your confidence in second half sales growth as you sit here today.
Joseph P. Pellegrino: Yeah, so, you know, when we do guidance, we sit in a 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.
Daniel Walker Stauder: Yes, so when we do guidance, we sit in the room for for two days basically gone through all of this stuff on each of the lines in 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 in Q3 is generally sort of the weaker quarter of the four quarters.
Joseph P. Pellegrino: 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 a Q2-ish sort of thing.
Joseph P. Pellegrino: Particularly in Europe as folks go on vacation and go to the mountains in the beach and all that kind of good stuff. So I would say, yes, 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.
Joseph P. Pellegrino: If you do that by day, you wind up getting 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.
Joseph P. Pellegrino: Some pretty logical answers there and.
Joseph P. Pellegrino: So our increase in guide is actually 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 up to $3 million, and then 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 talked about, Thailand and Korea and other places that are sort of popping up and doing well also.
Joseph P. Pellegrino: Maybe a little bit little bit more robust than it seems we built big beat by 1718 in Q1 and now were given an extra.
Joseph P. Pellegrino: Up to $3 million, and then really it's up to $44 2 million because of that FX piece. So I think we're signaling that we feel more confident about about the sale of the answer driven by ASP.
Daniel Walker Stauder: That's great. Thank you for the questions and congratulations on a great quarter.
Operator: Thank you. Our next question or comment comes from the line of Michael Sarcone from Jeffries. Mr. Sarcone, your line is now open.
Michael Anthony Sarcone: Hi, good afternoon, and thanks for taking my questions. [inaudible] You know, the AFPs that you're getting, 8%, I think JJ said 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.
Joseph P. Pellegrino: 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 of 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.
Joseph P. Pellegrino: All right, great. That's helpful. Thank you.
Michael Anthony Sarcone: And then just a question on the ERP system you 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, you know, on the expense side, are you going to be able to wring any expense efficiencies from some of the analytics you may be getting from the ERP system?
Joseph P. Pellegrino: 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 is yes, we probably can watch the sales folks more closely, and yes, we can wring some efficiencies out of the operations. But we've never installed a program this big. We were still on sort of what I'll call a junior varsity level until February of this year.
Joseph P. Pellegrino: So this is a big switch for us, but 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 was 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.
Joseph P. Pellegrino: 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 is an even better answer out there that Microsoft has been working on for the last 20 years and so eventually we will replace that.
Joseph P. Pellegrino: <unk> tool and it will pump out even more sophisticated data and make it easier to get just one example of how it might benefit us in the future.
Michael Anthony Sarcone: That's helpful, JJ. Thanks. Yeah, I was going to say it's impressive, you know, there's no shortage of companies that have Salesforce or commercial disruptions while they're implementing, you know, large ERP systems. We have one last one for me that I'll squeeze in. Could you just give us an update on how things are going with Xeo and what you're thinking there?
Joseph P. Pellegrino: Yes.
Joseph P. Pellegrino: That's helpful. Jay Jay Thanks, Yeah, I was going to say it's impressive.
Michael Anthony Sarcone: There is no shortage of companies that have salesforce or commercial disruptions.
Michael Anthony Sarcone: While they are implementing large ERP systems. We just one last one for me then I'll squeeze in could you just give us an update on how things are going with Zia and how youre thinking there.
David B. Roberts: Hey, Mike, it's Dave Roberts. Sure, happy to. In Q1, we did about 1.25 million sales of the ZEO, which was right at the guidance, and sort of performed where we expected. That was down from 1.5 million in Q4. And we don't really have any guidance 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 ZEO was on LeMaitre's commission plan, so it's still sort of early days at the moment.
Michael Anthony Sarcone: Hey, Mike, It's Dave Roberts sure happy to in Q1.
David B. Roberts: We did about $1 $2 5 million sales of the CEO, which was right at the guidance.
David B. Roberts: So sort of performed where we expected that was down from the $1 5 million in Q4.
David B. Roberts: And we don't really guide.
David B. Roberts: On the product line going forward, but it had a good it had a good April so we'll see where it comes out but I.
David B. Roberts: 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 zeal was.
David B. Roberts: <unk> reps Commission plan, so it's still sort of early days at the moment.
Michael Anthony Sarcone: Got it. Thank you.
Operator: Thanks a lot for your questions.
Speaker Change: Got it thank you.
James Philip Sidoti: 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.
Speaker Change: Thanks, a lot for your questions.
Operator: Thank you. Our next question or comment comes from the line of James Sidoti from Sidoti <unk> Company. Mr. Sidoti. Your line is now open.
James Philip Sidoti: Thank you. This is Alex on behalf of Jim.
James Philip Sidoti: Thank you this is Alex on for Jim Congrats on the quarter and thanks for taking questions.
James Philip Sidoti: Congratulations on the quarter and thanks for taking questions. A couple of quick ones for me. We spoke about GLPs and the effect on cardiovascular event reductions in the fall. It seemed like there wasn't a meaningful effect. I just wanted to check in on that and see if that still held.
Speaker Change: Couple of quick ones for me, we spoke about <unk>.
James Philip Sidoti: Effect on cardiovascular event reduction is in the fall.
James Philip Sidoti: Sounds like there wasn't a meaningful effect I just wanted to check in on that and CFS still helped.
George W. LeMaitre: 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 as, from our perspective, sort of a Wall Street brouhaha. We feel comfortable that our business will proceed with or without GLPs. So, no effect up here.
James Philip Sidoti: Yes, okay. Thanks for your question Alex It's George.
George W. LeMaitre: We have not seen anything in the whole sort of thing kind of came and went as a source for our perspective sort of as a wall Street brouhaha.
George W. LeMaitre: We feel comfortable that our business proceeds with or without <unk>. So no effect up here.
James Philip Sidoti: Thanks for the update. I appreciate it.
Speaker Change: Thanks for the update I appreciate it.
James Philip Sidoti: I wanted to check in on.
James Philip Sidoti: The manufacturing operations. Thank you guys.
James Philip Sidoti: And I wanted to check in on the manufacturing operations. I think you guys have spoken about thinking of, you know, 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.
James Philip Sidoti: I had spoken about thinking of.
James Philip Sidoti: Adding an additional shifts or opening up another facility may be in Burlington I just wanted to check in on how youre thinking about that these days.
George W. LeMaitre: Hi Alex. Yeah, it'll be okay. So, look, 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 was online maybe about 12 months ago or so, and then we went and hired a lot of people for that, and we also hired
Speaker Change: Hi, Alex Yeah, Okay. So.
George W. LeMaitre: 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 Thats 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.
George W. LeMaitre: 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 a second shift now. There are really no constraints to manufacturing up here. I switched the topic a little bit. You didn't ask about this, but maybe we talk 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 lines.
George W. LeMaitre: I would say.
George W. LeMaitre: Hopeful analysis, the better gross margin here is a little bit impacted by all of that but not exactly. So yes, we have a much bigger floor plate for manufacturing and we also have a second shift now there is really no constraints to manufacturing up here.
George W. LeMaitre: Switching topics a little bit you didn't ask about this but maybe we could talk about a little bit, but in Chicago, where we process our allo graft.
George W. LeMaitre: 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 it might lead to more allo graft growth going forward, but we shall see and we don't really guide by product line. So.
James Philip Sidoti: Thank you. Yeah, I appreciate the clarification there. A lot of good questions today, and that's all from us. Thank you.
Speaker Change: Thank you I appreciate the clarification, there and a lot of good questions today and that's all from US. Thank you.
Speaker Change: Thanks, a lot Alex.
Operator: 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.
James Philip Sidoti: Thank you. Our next question or comment comes from the line of Brooks O'neil from Lake Street Capital markets. Mr. O'neill. Your line is now open.
Brooks O'Neill: This is Aaron on the line for Brooks. Congratulations 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?
Operator: Yes.
Operator: This is Aaron on the line for Brooks Congrats on the Great quarter did you mentioned what percentage of the Q4 sales growth was related to price versus versus volume more specifically, 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.
Joseph P. Pellegrino: Yeah, and you want Q1 or Q4? Sorry, cue 1. Okay, yeah, Q1, 8% price, 3% unit. 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.
Joseph P. Pellegrino: Yeah, and
Speaker Change: Yes, and you want Q1 or Q4.
Joseph P. Pellegrino: Yes, Q1, 8% price 3% units.
Joseph P. Pellegrino: 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 sell something to go with that and if you want a little more color on that the higher the heavier hitters in terms of ASP increases this quarter were artur graft and restore flow.
Joseph P. Pellegrino: And if you want a little more color on that, the heavier hitters in terms of ASP increases this quarter were Artigraft and RestoreFlow and some of our catheters and OmniFlow. And if you thought about it last year, it was more of valvular tomes and shunts. It was more of a broad-based ASP increase this year. And Q1, anyway. We'll see what happens as we go
Joseph P. Pellegrino: And some of our catheters and omni flow and if you thought about it last year was more of valvular homes and shops.
Joseph P. Pellegrino: More of a broad based ASP increase this year in Q1 anyway, we'll see what happens as we go forward.
Brooks O'Neill: Okay, gotcha. That's helpful.
Speaker Change: Okay got you that's helpful and then back to the sales reps. You know you mentioned you plan to hire a few more this year.
Speaker Change: Im assuming that the reps that you have hired in the past and getting them properly change has been a bit challenging and maybe time consuming.
Speaker Change: Have you sort of approach this and would you say that youre starting to see some tangible benefits in that aspect.
Speaker Change: You mean in terms of I would say I generally feel like we haven't changed that much and how we train them over the years. So there hasnt theres been no gap between old reps hired a new reps hired youre right to point out, though add that it is it is a time consuming project.
Brooks O'Neill: I would say we have never been the number one trainer for medical device companies in the United States.
Brooks O'Neill: 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?
George W. LeMaitre: What you mean in terms of, 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.
George W. LeMaitre: 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 that gap or that area of opportunity at the company.
Speaker Change: Got you I appreciate that color and again congrats on the quarter guys.
Speaker Change: Thanks, a lot Ed.
Brooks O'Neill: Gosh, I appreciate that call, and again, congrats on the quarter, guys.
Speaker Change: Thank you.
George W. LeMaitre: Our next question or comment comes from the line of Brett Fishbein from.
Operator: Our next question or comment comes from the line of Brett Fishbin from KeyBank. Mr. Fishbin, your line is now open.
Brooks O'Neill: Keybanc Mr. Fischbeck. Your line is now open.
Brett Adam Fishbin: Hey guys, thanks very much for taking the questions. Follow up on Artigraft, you know; it's been a very successful acquisition just considering the U.S. performance. You mentioned a bunch of potential new markets and I 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 more than a year out, but maybe like a directional range of outcomes if those launches are in fact successful.
Brett Adam Fishbin: Hey, guys. Thanks, very much for taking the questions follow up on autograft.
Brett Adam Fishbin: 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 are looking at that opportunity from a tam perspective across the markets that youre looking to launch in maybe just understand it's still like more than a year out, but maybe like a dearth.
Brett Adam Fishbin: <unk> range of outcomes, if those launches are impacted basketball.
George W. LeMaitre: Yeah, Brett, that's a fantastic question. We think about this, and we talk about this a lot.
Speaker Change: Yeah, Brett that's a fantastic question, we think about this when we talk about this a lot maybe.
George W. LeMaitre: Maybe if I limit my comments to Europe, it'll be easier. Europe is sort of 50 percent of the rest of the world besides the U.S. and Canada. You'd love to say, oh, it's exactly half this. Europe is, you know, half this. I would 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 that in Europe, they don't use as many PTFE and prosthetic implants in AV access cases as we do in the United States.
Brett: Maybe if I limit my comments to Europe, it's easier Europe being sort of 50% of the rest of world. Besides the U S and Canada.
George W. LeMaitre: You'd love to say Oh, it's exactly Europe as you know have this I'll say, it's half the size of the U S. You'd love financially, let's say, let's say, it's half of that then would cut that in half again, but one reason, which is in Europe. They don't use as much PTFE and prosthetic implant in AAV access cases as.
George W. LeMaitre: 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 kind of fall, although we still plan on growing that but let's take 33 in the U S should go to <unk> and then cut it in half of 16 being geographically financially Europe's always about half as big as the U S.
George W. LeMaitre: It's a little bit of a different practice pattern for the vascular surgeons over there. So, if you took our 33 percent of revenue in the U.S., let's say that's kind of full, although we still plan on growing that, but let's say 33 in the U.S. You go to 16 and then cut it in half, 16 being geographically, financially, 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.
George W. LeMaitre: And then cut that in half again, so maybe theres 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.
Brett Adam Fishbin: All right, super helpful caller, 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 look like they bumped up again this quarter, I think it was 27 percent. Just curious maybe about what was underlying that level of growth and how sustainable that might be.
Speaker Change: Alright Super helpful color I appreciate that and then one follow up on the product area. Another good quarter for allograft, not too surprising, but the trends and carotid shunts it looks like they've bumped up again this quarter.
Brett Adam Fishbin: 27% just curious maybe what was underlying that that level of growth and how sustainable that might be.
George W. LeMaitre: Right. I mean, it's just a fantastic story that's going on with shunts, which is...
Brett Adam Fishbin: Right I mean, it's just.
George W. LeMaitre: Fantastic story, that's going on with Schein switches the.
George W. LeMaitre: 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, and 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.
George W. LeMaitre: 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 MTR thing and so they just said we're not going to support this product line. So we're just taking all the old units from those guys. In addition, since you know the CE barriers have gotten higher in <unk>.
George W. LeMaitre: 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 Bart has gone away and there is no new competitors coming in and you probably have better pricing. So.
George W. LeMaitre: So you got more units because Bard left, and then because Bard's gone away, and there are 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? 27. Sorry, 27% was our fault, Brett, in that. So, excellent activity going on there, despite T-CAR, despite stenting and all that; it's been a fantastic run.
George W. LeMaitre: The number was something like 17% this year or this quarter Q1 was 27, sorry, 27% was our up Brett in that so.
George W. LeMaitre: So excellent activity going on there despite T car, despite stenting and all that.
Brett Adam Fishbin: I appreciate you taking the questions and congrats on the quarter, guys.
Speaker Change: Thanks, a lot Brad.
Operator: Thank you. I'm sure there are 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.
Speaker Change: Thank you I'm showing 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.
Operator: Okay.
Operator: Okay.
Operator: [music].
Operator: Yes.