George LeMaitre: Of course, of course. We didn’t bring it up. Valvulotomes were up 2% in Q1. Last year was a much bigger growth number. Maybe if I could say, this is so typical, but we had a really tough comp in Q1 to beat up on for valvulotomes, but they were still up 2%. And if you look out over the year and the annualization of everything units and stuff, I feel like it’s — last year was a nice year for valvulotomes, this year is not quite as nice, but there still be — still should be a little bit of growth with valvulotomes.
Suraj Kalia: Got it. Fair enough. The other thing, George, in terms of price impact in the quarter and how should we think about average sales rep tenure versus a year ago?
George LeMaitre: Interesting. We hadn’t really discussed that much in the prep for this meeting. It feels to me like sales force 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, sales force turnover.
Suraj Kalia: Got it. And George, one final question. Obviously, there’s been a large strategic that has just surprised everyone with take-out multiples. And you guys have been relatively very disciplined on M&A and basically showcasing to the Street in terms of your strategy and David has been very articulate on 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 are seeing it? What should we think about as the year progresses? Thank you for taking my question.
Dave Roberts: Hey Suraj, it’s Dave. If you don’t mind, I’ll jump in. You mentioned the multiples you’re probably referring to the J&J Shockwave in the roughly 18 times 2023 revenue. That was obviously a huge announcement in our space. I would say we’re always cognizant of valuation. That was a very high valuation. There’s another lower one, Advanced Medical Solutions bought a division of bought Peters Surgical in Europe for less than 2 times sales. So, valuation always depends on what you’re buying. Of course, I think I read your reports, and I see small cap med tech valued around 4 to 5 times sales. So, I mean we are — I’d say we are very — we do focus on valuation lot. I’d say more than that, we focus on strategic fit. And so for us, finding the right target, which ideally isn’t open to vascular targets.
They’re about $25 million with more than $5 million of revenue, that’s where we’re really hunting. And in terms of this year, you never know where I’d say we’ve got two targets are a little bit larger that we’re talking to, but things come and go. So — but we’re always hunting. So, I guess I’ll leave it with that unless you have a follow-up.
Suraj Kalia: That should be good enough. Gentlemen, thank you for taking my questions and congrats again.
George LeMaitre: Thanks a lot Suraj.
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 Stauder: Yes, great. Thanks. So, a quick question on the operating margin profitability in 2024. And correct me if my math is wrong, but if we look at gross margin and revenue guide for 2Q and the year, to that operating income number, it seems like there’s a good amount more of OpEx leverage than we were anticipating. So, I guess if that is the case, where is this primarily coming from on the income statement? Is it mainly from sales rep utilization? And how are you continuing to drive this throughout the year? Thanks.
George LeMaitre: 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 then buried inside of that as we’ve lost some to the dollar, the strengthening of the dollar. So, I think that’s a little bit mostly where the leverage is coming from in the P&L. And then also the gross margin, we’re coming at you last time with a 68% gross margin. We’re starting to feel a little bit more comfortable about our gross margin. And so we’re giving you the 68.6% now for the year instead of 68.0%. As we were preparing our guidance and everything, we kept off expenses exactly the same.
J.J. Pellegrino: And Daniel, I would say on the gross margin piece, we beat a little bit in Q1 by 10 basis points or so. And FX is actually hurting us by about 0.2%, 0.3% since our last guide for the rest of the year. So, the 0.6% increase that you’re getting on gross margin is actually closer to 1% maybe or so. And part of that, I think, is because when we did guidance last time, we thought ASPs were going to be in the 6% or 7% range, maybe they’re more like the 8% or 9% range. And so there’s nice tailwinds there. And then those pieces we were talking about earlier in terms of direct labor efficiencies and quality costs and all that helping us as well in the second half.
George LeMaitre: I hope that gets to your question, Daniel.
Daniel Stauder: Yes, that was great. And then just one follow-up, more along the lines of the revenue guidance and the cadence in the back half. Typically, 3Q steps down from Q2. Are you still expecting that normal seasonality? Or could that be a little more modest from what you’re seeing given the strength thus far and what you’ve guided 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?
J.J. Pellegrino: Yes. So, when we do guidance, we sit in the room for two days, basically going through all this stuff on each of the lines and sales is obviously the number one driver. And so I would say we look at that from a lot of different angles. Seasonality is certainly one of those, and Q3 is generally sort of the weaker quarter of the four quarters, particularly in Europe as folks go on vacation and go to the mountains and the beach and all that kind of good stuff. So, I would say, 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, you get some pretty logical answers there.
