LeMaitre Vascular (LMAT) Q2 FY26 earnings call: guidance and Q&A

How will LeMaitre allocate resources to the Quick Stick project given the likely need for a multi-year clinical trial?

Management acknowledges the market opportunity for Quick Stick but needs time to decide on resource allocation for a clinical trial, as they are not historically a clinical trial company, despite aspirations for more R&D focus.

“We're not really a clinical trial company historically, but we do have these aspirations to get a little bit more R&D focused. So I think it will take us a little time to figure that out.”

asked by Michael Sarcone · answered by George LeMaitre

What are the next steps and timelines for resolving RFA supply constraints, and what did the company do in similar past situations?

The company is actively working on 4-5 initiatives to solve the supply issue, including moving processing to Burlington, MA, and exploring additional recovery groups. They have successfully resolved similar issues with peripheral vascular tissues in the past. Cardiac allografts are still performing well, just with slower growth than anticipated.

“As you can imagine, we're running around like crazy trying to solve this. I think when you're dealing in cadaver tissues, there are always threats of supply around you.”

asked by Michael Sarcone · answered by George LeMaitre

Why was Americas' growth softer than expected, and was it due to general procedure volumes or the catheter issue?

The Americas' reported 5% growth was heavily impacted by the catheter issue (due to prior-year overstocking) and the Aziyo issue. Excluding these, organic growth would have been 8%. Management does not heavily rely on general procedure volume trends as their customer base is distinct.

“If you strip out the catheter topic, again, you can go strip out stuff, right? But if you strip that out, that's a real thing. You get it to 8% organic in the Americas.”

asked by Brett Fishbin · answered by George LeMaitre

Elaborate on the "relocalization" initiative, its long-term impact on margins, and working capital.

The "relocalization" initiative involves expanding warehouses in Europe to serve local markets directly, improving customer connection and significantly reducing shipping costs (e.g., $5 vs $55 per package). This has led to an "explosion of gross margin" in Europe, with profitability up 70% in that segment.

“shipping a package from Frankfurt cost $55 to the Madrid hospital and shipping a package from Madrid to the Madrid hospital costs $5. And so there's this huge shipping savings to go with Artegraft being so much bigger in Europe.”

asked by Brett Fishbin · answered by George LeMaitre

Update on Artegraft's success in tender-based European countries and if the H2 outlook depends on these wins converting before year-end.

Artegraft's Q2 European performance exceeded expectations. While initially strong in Central Europe, it has spread to France, Italy, Spain, and the U.K. Tender-driven markets in Southern Europe are performing "very well," contributing to record business.

“The tender-driven markets of the South part of Europe are doing really well right now, very well. It's helping the business post records every month and every quarter.”

asked by Anna Ponsi · answered by George LeMaitre

Explain why gross margin guidance was raised while operating income guidance was lowered, and how to model these metrics moving in opposite directions.

The decrease in operating income guidance directly reflects the revenue decline from FX, Middle East conflict ($400k orders), and RFA supply issues. Gross margin improved due to higher ASPs and Artegraft mix. Operating expenses will increase in H2 2026 compared to H2 2025 (which had tight spending), particularly due to sales rep hiring, leading to less operating leverage.

“The lack of op leverage is going to be driven a little bit by that. It was a tight-fisted company in Q3 and Q4 of last year, a little bit less so this year.”

asked by Daniel Stauder · answered by Dorian LeBlanc

Update on the M&A pipeline and what the company is seeing in terms of potential acquisitions.

The M&A pipeline is "pretty active," with a fourth member being added to the biz dev team. The focus remains on open vascular and expanding cardiac surgery, targeting businesses with $15 million to $150 million in revenue.

“It's a pretty active pipeline right now. Obviously, I don't usually disclose how many deals or the size of deals, but we are busy. In fact, we're adding a fourth member to the biz dev team this coming Monday.”

asked by Jim Sidoti · answered by David Roberts