LeMaitre Vascular, Inc. (NASDAQ:LMAT) Q4 2022 Earnings Call Transcript

Operator: Our next question comes from Rick Wise of Stifel. Your microphone is now open.

Unidentified Analyst: Hi, good afternoon. This is John on for Rick today. Just to start off looking at the full year guidance for €˜23, a bit of a range there. I’m just wondering if you could add a little color on what gets you to the higher end, what pushes to the lower end? What are the kind of key headwinds, tailwinds, crosscurrents you’re seeing as you look ahead into €˜23?

George LeMaitre: Hi, okay, I’ll try to help with this one. This is George. Things that could make it go better. If the price hikes all stuck, you never know when you put a price hike in how much it sticks, maybe how much the turnover would be with the sales force. We’ve got a lot of new reps here to see what that looks like. It’s been fantastic for the last 8 months, a very low turnover. But I guess that would push things higher if we had lower turnover and vice versa, if we didn’t. Those are a couple of the things. How quickly the Korean subsidiary takes off. It’s only a $1 million business, but that’s of interest to us as well. How long it takes to get the carotid indication in Japan is actually kind of key. If we got it in Q1, you’ll see Japan accelerate in growth.

And if it takes until Q4, it will be a little bit worse. But I’ve never really been asked that question that way, but it’s a good question. It’s a creative question and there is so many moving parts. That is why we try to give a range, although how wide is the range, $4 million is the range. And you do have a taste of how close we are. And I think this quarter, we were like within $100,000 of the actual number. So at least for this quarter, our sort of range finding machine worked.

J.J. Pellegrino: John, I’d give you maybe another lens to look through it. The four or five big product lines driving growth next year are artegraft, valvulotomes, patches, shunts and restore flow. And they each have their own story. So the extent that you can be on the right side of all those stories, you’ll be on the higher end of the range. And to the extent that you won’t, you’ll be on the lower end of the range. For example, artegraft is a story of gaining sort of some unit traction these days post acquisition. And to the extent that we get some of that, I think that will be helpful. Valvulotomes is the pricing topic, largely that George talked about. There may be some units as well, but mostly pricing, etcetera, etcetera. So there are different product, by product stories that will drive us higher or lower. But those are the five to focus on, I think.

Unidentified Analyst: Great. That’s really helpful color. I appreciate it. And just one more follow-up question. You talked about adding reps in €˜22, and you’re basically at the level you want to be at now. Last year, just to put it from a financial term, sales and marketing grew like 19% ish top line is like 8% to 9% organic. On that line for €˜23, should we be expecting more leverage? Is there a way we should be thinking about it as these reps ramp up? And what’s kind of a longer-term expectation for you guys for S&M growth as you reach a more steady state from a rep perspective? Thanks for taking my questions.