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LeMaitre Declares 2008 Results

LeMaitre Vascular, Inc. (LeMaitre), a cardiovascular devices company, has reported net sales of $48.7 million for the full year of 2008, compared with the net sales of $41.4 million in the previous year-end. It also reported a net loss of $3.3 million, or $0.21 per share, for the full year of 2008, compared with the net loss of $2.9 million, or $0.19 per share, in the previous year-end.

Fourth quarter of 2008 sales were $12.1 million, a 9% increase versus Q4 2007 (+11% excluding foreign exchange and acquisitions). Sales increased 6% in the company’s Endovascular category and 12% in Vascular while sales decreased 1% in General Surgery. Endovascular was driven by the TAArget and UniFit stent grafts, and partially offset by the weak Euro. Vascular benefited from the inclusion of the Albograft (acquired December 2007) and strong results from the Remote Endarterectomy devices. International business drove the top line in Q4 2008, accounting for 44% of sales.

Sales in 2008 increase was driven by the inclusion of the company’s 2007 acquisitions, acceleration of stent graft sales in Europe, and the stronger Euro for the full year. Geographically, several international subsidiaries experienced significant growth: France (+52%), the U.K. (+41%), and Japan (+36%).

Q4 2008 operating income was $354,000 versus a loss of $1.3 million in Q4 2007. This improvement was due largely to the 2008 Expense Shave program and associated headcount reductions. Operating expenses fell 15% from $9.5 million in Q4 2007 to $8.1 million in Q4 2008. The $354,000 Q4 operating profit extended the 2008 bottom-line turnaround, comparing favorably with the Q1 operating loss of $2.6 million, the Q2 operating loss of $869,000 and the Q3 operating profit of $170,000.

For the full year, the company reduced its operating loss to $2.9 million from $4.3 million in 2007. This $1.4 million year-over-year improvement was due to the 18% sales gain coupled with the 2008 Expense Shave program and headcount reductions.

The company reported net income of $312,000 in Q4 2008, or $0.02 per diluted share, versus a net loss of $1.2 million, or $0.08 per diluted share in Q4 2007.

The company’s cash and marketable securities increased by $2.1 million during Q4 2008 to $21.3 million. This increase was driven principally by net income of $312,000, depreciation, amortization, and stock-based compensation of $566,000, as well as a $1.1 million inventory reduction.

George W. LeMaitre, chairman and chief executive officer said, “I am happy to report an excellent Q4. We posted 11% organic sales growth, recorded our second consecutive operating profit and increased our cash-on-hand by $2.1 million. This was accomplished despite the weak Euro which decreased our top- and bottom-lines in Q4. Also, in January we began distributing a carotid patch which should complement our substantial carotid shunt business. More recently we signed an agreement to terminate the AlboGraft distribution contract, opening the door in Q2 for direct-to-hospital sales. I expect this transaction will benefit our top-line, gross margin and bottom-line as time progresses.”

The company reported a gross margin of 69.6% in Q4 2008, decreased from 73.3% in Q4 2007, but up from 67.4% in Q3 2008. The decrease from 2007 was largely a result of the inclusion of the AlboGraft sales in Q4 2008, manufacturing inefficiencies, and continued strength in the company’s international business, where the weak Euro pressured margins.

Sales and marketing expenses down 17% to $4.4 million in Q4 2008 from $5.3 million in Q4 2007. Sales and marketing expenses were 36% of revenue in Q4 2008, compared to 48% in the year-earlier quarter. The company ended Q4 2008 with 52 sales representatives.

General and administrative expenses decreased 13% to $2.3 million in Q4 2008 from $2.6 million in Q4 2007, the result of general belt-tightening.

R&D expenses up 11% to $1.3 million in Q4 2008 from $1.2 million in Q4 2007, as the company continued to invest in clinical and regulatory personnel, as well as product development.

Business Guidance

The company projects 2009 sales of $50.0 – $50.5 million and 2009 operating income of $1.5 million. Excluding foreign exchange and acquisitions, this sales guidance implies year-over-year growth of 8% – 9% in 2009.