Suraj Kalia: Yeah, fair point. And the key study will be released, I believe it’s next Friday, so I’m sure there’ll be a lot of discussion. George, in terms of just following up a final question in terms of the 40% O-U.S., again, maybe I’m just stretching it here, forgive me if I am. How do you all think through the various buffers for risk mitigation O-U.S., just given everything going on? Geopolitical effects, things seem to be amping up and given your exposure, just kind of talk to us as to the buffers from a risk management perspective. Thank you for taking my question.
George LeMaitre: Right. Okay. Yeah, it’s a great question. And maybe it goes back to how do we choose to get into the markets that we choose to get into internationally, I think it’s your question. And I would say we’ve been very cautious, maybe with the exception of Thailand, which is not exactly what I would call a western democracy, but we’ve been very cautious in trying to sort of follow what I would call, to be pithy about it, the British rule of law. So you go to places like Canada, you go to places like Japan, you go to places like the UK, Singapore, places where you wouldn’t be – you’d be nervous, but if you got put up on some crime in some of these countries, you’d get a jury and you’d get a trial by jury.
So, I think, most of the places we’ve gone have been those type of places. And so, I think the 40% that we do derive overseas is in fairly safe places like Spain, France, Germany, Italy, the UK, Japan and Canada. And I just reeled off in the U.S. Those are the 7 biggest countries of our revenue. We don’t go to places like Russia. We stayed away from Saudi Arabia. We stayed away from South Africa. So we’ve been – it is very thoughtful. I would say the one slightly odd duck here would be the Thailand thing, which is new, but we had a very big distributor there and we felt like it would be worth taking the risk in what, again, I would not categorize that as a voting democracy right now. But that’s the only one.
Suraj Kalia: Got it. Thank you.
George LeMaitre: You’re welcome.
Operator: Thank you. And one moment as we move on to our next question. And our next question is going to come from the line of Michael Sarcone with Jefferies. Your line is open. Please go ahead.
Michael Sarcone: Great. Good afternoon, and thank you for the shout out before.
George LeMaitre: You’re more than welcome. Thanks for the nice research. It’s very thoughtful.
Michael Sarcone: Great to hear. Just a first question, you had the 11% ASP contribution this quarter. I was wondering if you could comment on what’s baked into the 16% organic growth guide for 4Q from a price standpoint. And then, looking forward, how do you think about the sustainability of that ASP contribution going forward into 2024?
George LeMaitre: Okay. So first answer is not going to be very helpful to you, which is we’re trying not to – we’re guiding what 16% organic for the quarter? We’re trying not to break that out by units or price. You’re looking backwards, though, you could make some logical inferences, which is, I feel like I don’t know the exact numbers right now, but the relationship between price and units has been a bit stable this year for these three?
Michael Sarcone: 13% ASP and Q1, 9% in Q2, and now 11% and Q3.
George LeMaitre: Going forward, which is part of your question, you’re trying to break into 2024, which we always try to not to go into, but we’ll play along a little bit here. Going forward, I think that the LeMaitre story has been about try to get into niche markets where you have big market share, and I name on real off the valvulotomes, the shunt, XenoSure, we’re a number one player there. Be end markets where you have pricing power, and be end markets where you think worldwide pricing is set in Burlington, Massachusetts. And so I don’t – that’s not gone away. You haven’t seen us change up our segments here with acquisitions here. So there’s a lot of segments including Artegraft here, where I do feel like you’re setting prices in Burlington and Frankfurt, and we don’t have to go to Arizona with Gore and Duke it out with them about what the PTFE price is.
That’s their issue. But I do think this is a bit of a LeMaitre as a price play, and we keep having pricing power. And the good thing here is if you want more pricing power, the Brussels is about to give it to you in spades here. They keep making these regulatory barriers higher and higher with the MDRs. And the people – the competitors are falling off like fleas in the smaller markets. They’re just going away. And so, therefore, it gives us more pricing power into it, the shunt pricing that we’ve had in the last 3 years, the power that we’ve gotten has been largely, because Becton Dickinson left the market. And they left the market, because Brussels has put up regulatory barriers that are too high for people to climb over. So, I think the story continues unchanged.
I won’t project what 2024 will look like, but I don’t think the story is changing that much.
Joseph Pellegrino: Mike, this is J.J. Another way to think about Q4 and one of the many ways we think about it is sequentially what’s going on. And so, those price hikes that I talked about for Q1, Q2, and Q3 are kind of the same and at around 10%. So you’re kind of thinking probably you’re going to do about the same in Q4. And then what else is different? And so the things that’s kind of stuck out from Q3 to Q4 this time around were, one is FX. The FX has moved a lot. And so sequentially from Q3 to Q4, it’s like a $600,000 headwind. And so that’s one topic you have to take into consideration. The number of days in a quarter, those matter. We take those into consideration. Seasonality matters a lot for us as well.
Q3 is generally the slower quarter. And Q4 is sort of behind Q2, if you will, in terms of seasonality. And so, there’s an uptick there. And what does that mean? What’s it been historically? And so what will it be this year? And then, we look into specific stories like we’ve had a RestoreFlow sort of backorder topic in Q3 that we’re working our way out of hopefully in Q4. And as we get into Q1, what does that mean? Well, maybe that adds an extra whatever, a few hundred thousand dollars. There’s a Thailand story that we went direct there in Q3. The Thailand distributor stuffed the channel, essentially. So we didn’t get the sales, we thought we were getting Q3, but we’ll get them in Q4, and maybe that’s a couple of hundred thousand dollars or so.
So, sequentially, I think the ASPs, you can think of as consistent, but other topics coming and going to get to the sort of $49 million we got it.
Michael Sarcone: Got it. That’s really helpful. Thank you. And just a follow-up on that. J.J., I think you and I have spoken about in the past. Historically, the price algorithm has really kind of been that mid-single-digit level. But, I guess given the regulatory considerations that you’re mentioning, is it fair to think that maybe kind of the new paradigm is above what we’ve seen historically?
Joseph Pellegrino: I think we’ll take it year-by-year. But, I think the cycle you’re in right now at least for this year, and then maybe you can talk a little bit about next year, but not too much. This year, it’s all about mostly valvulotomes and shunts. And so, one of our valvulotomes was priced below one of our other valvulotomes. We brought that price up to essentially match it. And being the premier provider of these devices, the customer said fine. And so we got really nice price hikes in valvulotomes. And then, shunts, the topic, George, was talking about with other competitors going off the market, certainly helps our share and our leverage in those spaces. And so, we’ve gotten nice price hikes there, particularly in Europe.
And then the third thing, we did this year was we put in, and we’ve done it before, but I think we really did it a little more forcefully this year, was put in pricing floors in some of these product lines. And so, you may not discount beneath whatever that pricing floor is, if you’re a sales rep, whereas in the past you could have. And so to the extent that we use pricing floors in the future, you might get outsized ASP growth versus your 5% historical. To the extent there’s other product lines in the bag that are mismatched in terms of pricing that can be fixed, you might get outsized pricing in the future. So we’ll see where that goes. But, right now, we’re certainly in a nice spot in terms of pricing.
