LeMaitre to Consolidate California Factory; Also Exiting TAArget/Unifit Business
May 20 2011 - 4:30PM
LeMaitre Vascular, Inc. (Nasdaq:LMAT), a provider of peripheral
vascular devices and implants, today announced a new factory
consolidation and its exit from its TAArget/Unifit stent graft
business.
California Factory Consolidation
On May 16, 2011, the Company's Board approved the closure of its
manufacturing facility in Laguna Hills, CA and the transfer of
related production to Burlington. The Company acquired this factory
in connection with its acquisition of the LifeSpan Vascular Graft
in November, 2010. The closure is anticipated to occur in Q2
and Q3 2011.
This is the Company's seventh factory consolidation since
2002. Upon completion of this consolidation, the Company will
have centralized all of its production activities into a single
location. The Company expects resulting income statement
charges of approximately of $0.4mm spread throughout Q2 and Q3 of
2011 and cash outlays of approximately $0.9mm. The Company
expects this closure to increase operating income by approximately
$0.4mm per year in 2012 and beyond.
Exiting TAArget/UniFit Stent Graft Business
The Company also announced that it will discontinue the
manufacture and sale of its TAArget/UniFit aortic stent grafts
effective as of June 30, 2011. The Company expects
approximately $1.1 million in non-cash charges in Q2 2011, mostly
in the gross margin line due to TAArget/UniFit inventory
write-offs. The Company will continue its European distribution of
the Endologix stent graft.
George W. LeMaitre, Chairman & CEO said, "These two moves
will continue the improvements we have been executing upon since Q4
2010. Another factory closure should save us $400,000/year and
consolidate all manufacturing under one roof at our Burlington,
Massachusetts headquarters. The TAArget/UniFit exit removes a
declining product from our sales bag to allow greater focus on our
faster-growing vascular products."
Business Outlook
As a result of these restructuring initiatives, the Company
reduced its Q2 2011 sales guidance to $15.3mm. The Company
also reduced its Q2 2011 reported operating income guidance to
break-even, which includes $1.1million of restructuring charges
(TAArget/Unifit discontinuation, California factory closure and
Spain/Denmark distributor buy-outs), as well as $0.9 million in
TAArget/Unifit inventory write-offs in the gross margin line.
The Company has also revised its 2011 sales guidance to $61.0
million, and its 2011 reported operating income guidance to $5.0
million.
About LeMaitre Vascular
LeMaitre Vascular is a provider of devices for the treatment of
peripheral vascular disease. The Company develops,
manufactures and markets disposable and implantable vascular
devices to address the needs of vascular surgeons. The
Company's devices are used to treat peripheral vascular disease; a
condition the Company believes affects at least 20 million people
worldwide.
Well-known to vascular surgeons, the Company's diversified
product portfolio consists of brand name devices used in arteries
and veins outside of the heart, including the Expandable LeMaitre
Valvulotome and Pruitt F3 Carotid Shunt.
LeMaitre and the LeMaitre Vascular logo are registered
trademarks of LeMaitre Vascular, Inc. This press release
contains other trademarks and trade names of the Company.
For more information about the Company, please visit
http://www.lemaitre.com.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of the U.S. Private Securities Litigation Reform Act of
1995. Statements in this press release regarding the Company's
business that are not historical facts may be "forward-looking
statements" that involve risks and
uncertainties. Specifically, statements regarding the
Company's financial and operational guidance, the projected closure
date of its Laguna Hills, California manufacturing operations, the
projected costs of such closure, the projected financial benefits
of the relocation of graft production to the Company's Burlington,
Massachusetts headquarters, and the projected operational benefits
of discontinuing the Company's TAArget and UniFit stent graft
products are forward-looking, involving risks and
uncertainties. Forward-looking statements are based on
management's current, preliminary expectations and are subject to
risks and uncertainties that could cause actual results to differ
from the results predicted. These risks and uncertainties
include, but are not limited to, the risk that the Company's
restructuring costs may be greater than anticipated; the risk that
the transfer of production activities may have an adverse impact on
the Company's ability to manufacture its LifeSpan Vascular Graft in
sufficient quantities at an acceptable cost and with comparable
quality at its Burlington location, the risk that the Company's
restructuring activities may be distracting to the Company's
management; the risk that the Company may not realize the
anticipated benefits of its restructuring activities; and
other risks and uncertainties included under the heading "Risk
Factors" in our most recent Annual Report on Form 10-K, as updated
by our subsequent filings with the SEC, all of which are available
on the Company's investor relations website at
http://www.lemaitre.com and on the SEC's website at
http://www.sec.gov. Undue reliance should not be placed on
forward-looking statements, which speak only as of the date they
are made. The Company undertakes no obligation to update
publicly any forward-looking statements to reflect new information,
events, or circumstances after the date they were made, or to
reflect the occurrence of unanticipated events.
CONTACT: J.J. Pellegrino
Chief Financial Officer
LeMaitre Vascular Inc.
781.221.2266 x106
jpellegrino@lemaitre.com
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