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Operator: Welcome to the LeMaitre Vascular’s Q1 2026 Financial Results Conference Call. As a reminder to everyone, today’s call is being recorded. At this time, I would like to turn the call over to Mr. Dorian LeBlanc, Chief Financial Officer of LeMaitre Vascular. Please go ahead, sir.

Dorian LeBlanc: Thank you. Good afternoon, and thank you for joining us on our Q1 2026 conference call. With me on today’s call is our CEO, George LeMaitre; and our President, Dave Roberts. Before we begin, I’ll read our safe harbor statement. Today, we’ll be making some forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, the accuracy of which is subject to risks and uncertainties. Wherever possible, we will try to identify those forward-looking statements by using words such as believe, expect, anticipate, pursue, forecast and similar expressions. Our forward-looking statements are based on our estimates and assumptions as of today, May 5, 2026, and should not be relied upon as representing our estimates or views on any subsequent date.

Please refer to the Cautionary Statement regarding forward-looking information and the Risk Factors in our most recent 10-K and subsequent SEC filings, including disclosures of factors that could cause results to differ materially from those expressed or implied. During this call, we will discuss non-GAAP financial measures, such as organic sales growth. Reconciliations of GAAP to non-GAAP measures discussed in this call are contained in the associated press release and if applicable, in supplemental materials, both of which are available in the Investor Relations section of our website, www.lemaitre.com. I’ll now turn the call over to George LeMaitre.

George LeMaitre: Thanks, Dorian. Q1 featured 11% sales growth, a 72.7% gross margin and 42% EPS growth. Grafts were up 20%, valvulotomes 15% and carotid shunts 11% as each category posted record sales. Our 3 geographies also posted record sales. EMEA was up 20%, APAC 18%; and the Americas, 7%. Artegraft has become our largest product, and we’re investing in its growth in 3 ways: number one, filing more international approvals; number two, making longer sizes available for leg bypasses; and number three, proving Quick Stick claims for AV access. Worldwide Artegraft sales grew 36% in Q1. International Artegraft sales in Q1 were $2.1 million, and we expect 2026 sales to be $10 million versus $4 million in 2025. Health Canada has approved Artegraft and the launch is now planned for H2 2026 as we finalize Canadian-specific packaging validations.

Additional Artegraft approvals are expected in 2027 for Korea, Brazil, Vietnam and India. We’re also working to make longer artegrafts available. Because European surgeons use Artegraft for leg bypasses, our longest Artegraft, which is 50 centimeters, is now in high demand, and we know we could sell longer sizes. Unfortunately, our current packaging tube is just 53 centimeters long. So the first step is to gain approval for a longer tube, and we plan to make these filings in the U.S. and Europe in H2 2026. First sales of these longer artegrafts could start in H2 2027. Separately, we’ve made a pre-submission filing to the FDA as we seek Quick Stick AV access claims on Artegraft’s U.S. labeling. This pre-submission will help us collaborate with the FDA to develop the pathway for a PMA filing or to design a clinical trial.

While Artegraft’s current U.S. labeling restricts cannulation to 10 days after implantation, peer-reviewed literature indicates that artegraft can be cannulated 1 to 3 days after implantation. RFA grew 25% in Q1, led by strong U.S. results. We currently distribute tissues in 3 countries: the U.S., Canada and the U.K. German implants should begin in Q2, and we now expect to receive Irish approval in H2. Our Irish warehouse opened in April, and we’ll begin shipping our core medical devices starting in June as we await an audit from the Irish Tissue Authority. This audit should enable tissue distribution from our Dublin warehouse to Irish hospitals in H2. Long term, this warehouse will be used for pan-European distribution. We filed for Australian approval in April, and we plan to file in Austria, Holland, Belgium, Spain and Switzerland in 2026.

As for our RFA facility transfer, tissue processing is ramping up in Burlington, and we should complete the project by year-end. We ended Q1 with 158 sales reps, up 3% year-over-year, and we plan to end 2026 with 170 to 180. We currently have 16 open requisitions for new reps, mostly in the U.S. We ended Q1 with 35 RSMs and country managers, up 13% year-over-year. We expect to go direct in Poland in Q4, and this project will include an office, warehouse, a GM, customer service team and several reps. Poland will be our 32nd direct country. Higher ASPs, geographic expansion and disciplined spending produced 11% sales growth and 42% EPS growth in Q1. Full year 2026 also shows op leverage. Increased guidance implies 12% sales growth and 26% EPS growth.

Our new 2030 goals are posted on the walls of all LeMaitre conference rooms. We call them the 2030 planks, and our playbook remains simple: produce quality devices, build our sales force, go direct in new countries, acquire niche products and focus on profitability, cash flow and dividends. I’ll now turn the call over to Dorian.

Dorian LeBlanc: Thanks, George. Organic sales growth of 10% over Q1 2025 was driven by average selling price increases of 8% and unit growth of 2%. Unit growth was impacted by a lower-than-average quarter in our distribution business, which can be lumpy. Excluding distribution, direct sales grew 12.8% organically, comprised of 8.4% price and 4.4% units. Total organic revenue growth excludes a $2 million foreign exchange benefit in Q1 2026 and $1.5 million of Aziyo distribution sales in Q1 2025. These 2 items largely offset one another. We discontinued Aziyo distribution in May 2025. In Q1 2026, we posted a gross margin of 72.7%. The 350 basis point year-over-year improvement was driven primarily by higher ASPs and manufacturing efficiencies.

Our Q2 gross margin guidance of 72.1% reflects the impact of our new Billerica warehouse and the manufacturing transfer of our RFA processing to Burlington. Operating expenses in Q1 2026 were $30.6 million, an increase of 6% versus Q1 2025. Despite the continued expansion of the sales force, overall company headcount decreased 3% from 662 at March 1, 2025, to 641 at March 31, 2026. Q1 2026 operating income increased 41% year-over-year to $17.8 million, with an operating margin of 27% compared to 21% in Q1 2025. Fully diluted earnings per share were $0.68, up 42%, benefiting from strong operating income and an improved effective tax rate. We believe our effective tax rate will remain lower than our historical rates. Given the strong growth in high-margin international Artegraft sales and our overall geographic sales mix, a larger share of our income qualifies for the foreign-derived intangible income or FDII deduction, which structurally lowers our tax rate.

Excluding the discrete items in this quarter, we expect an 80 basis point improvement from historical effective tax rate due to the higher FDII deductions, another benefit of our U.S. manufacturing footprint. Cash from operations generated $15 million in Q1 2026 as compared to $9 million in Q1 2025. We paid $5.7 million in dividends to our shareholders during the quarter. We ended Q1 2026 with $367 million in cash and securities, an increase of $8 million in the quarter. The LeMaitre playbook continues to drive broad-based revenue growth, supported by our differentiated products, direct-to-hospital model and strong commercial organization. We are affirming our full year revenue guidance of $280 million, representing 12% organic growth. We are increasing our annual guidance for gross margin to 72.3% and operating to $79.8 million, representing 24% growth over adjusted 2025 operating income.

We are also increasing annual guidance for diluted earnings per share to $3 or 26% growth from adjusted 2025. Historically, Q2 has been one of our strongest quarters, and we’re expecting revenue of $71.5 million and an operating margin of 30%. Our current guidance assumes a constant euro-U.S. dollar exchange rate of $1.17 and no dilutive impact from our convertible debt. For additional details, please see today’s press release. Finally, we’d like to welcome Keith Hinton from Freedom Capital Markets to the call. Keith initiated coverage on LeMaitre on March 31. With that, I’ll turn the call over to the operator for questions.

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Operator: [Operator Instructions] Our first question comes from the line of Keith Hinton from Freedom Capital Markets.

Keith Hinton: I have kind of a high-level question here on the pricing side of things. So EMEA has been growing faster than the U.S. for a few years. It’s my assumption that the prices there start lower and there’s less ability to take price over time. So considering that kind of balance against the ongoing mix shift towards grafts, where it seems like you do have good pricing leverage in the U.S. Just how should we think about the high sustainability of high single-digit blended pricing increases in the out years?

George LeMaitre: This is George LeMaitre. Again, welcome to your firm for covering the company. And also welcome to the call in terms of asking about price increases and the sustainability. It’s a question you can imagine we get frequently. We feel very comfortable with what’s going on here. We have another year where I think we’re validating all the way into Q1 that we’re able to get these price increases. We got 8% in Q1. Did you want me to distinguish between European pricing flexibility and U.S. pricing flexibility? Was that part of your question?

Keith Hinton: Yes, that would be perfect.

George LeMaitre: Right. I would say it’s not exactly answering it, but on that topic, I would say the floors, the pricing floors that we put in are largely in and installed in the United States and about 55% of our products, we have pricing floors and then we change them from year-to-year, of course. And in Europe, I still think we have a little room to go. I think only about 40% of our products have pricing floors. So you can do more — you can add pricing floors to more of the different products over there. Also in Europe, I think it takes longer for prices to really get installed since particularly in Southern Europe, a lot of the stuff is sold on 3-year tenders. And so you can only change your price once every 3 years. So you change it and then it takes 3 years for it to fully get implemented.

I hope that makes sense to you. So maybe a little more room over in Europe, given the fact that we’re not as price floored over there and that it takes longer once you do a price — to get to a price hike, it takes longer to get to.

Keith Hinton: Great. And then just one specific, and again, apologies if I missed this, but can you talk a little bit about the performance for patches in the quarter? I know there was a bit of a tough comp there. You were lapping some supply issues for a competitor, and I think that was the last quarter of Elutia. So just talk a little bit about that and how we should think about patches growth going forward?

Dorian LeBlanc: Right. And I can pull out, it was not such a great quarter for patches. XenoSure was up 5%. That’s the core patch. And I can get you in a second, if you stand by, I can get you the full patch category. If anyone in the room has that, we can do that. XenoSure is the main piece of all this. And I’m getting closer here, Keith. I should know this off the top of my head. Let’s see. Let’s see that. That’s going to help me. One second, I can do it. Organic growth for the whole category was 2.3% for the quarter. Again, 5% for Zeno and 2.3% for the whole category patches. Does that help?

George LeMaitre: So we have his audio problem.

Operator: Okay. Can hear you very well at the moment?

George LeMaitre: Great. We lost you for a little while, yes.

Operator: Our next question is coming from the line of Michael Petusky from Barrington Research.

Michael Petusky: So George, I guess I’m curious with the stuff of the last, I guess, 2 months in the Middle East. Are you guys seeing any impact from that either just in terms of customers that you may have in that part of the world or just in general in terms of the cost of transporting things and so on and so forth? Just wondering any impact from sort of the international problems.

George LeMaitre: Sure. So we have a very concrete topic about that, but it’s not large. We weren’t able to ship $175,000 worth of export towards the Middle East, at the end of the quarter. So we ended the quarter Q1 without having shipped that. But in general, Mike, I would say, no, we’re not really being bothered by this. This is a big topic for everyone in the world. But for our little world LeMaitre Vascular so far, we’ve been okay. Probably as time goes by, the supply chain will put extra cost on us for transportation and things like that. But I would say, for now, we’re crossing fingers and toes, and I think things are okay for us vis-a-vis what’s going on in Iran.

Michael Petusky: Great. And I don’t know if David is there, but if he is, I’d love an update on M&A, any commentary he has there.

David Roberts: Mike, yes, it’s Dave. Nice to hear your voice. Yes. So we’re out hunting. We’re active. We’ve put out 2 or 3 term sheets so far this year. The hunting ground remains the same of open vascular, where there are a couple of dozen targets and cardiac surgery, which, of course, is about 12% of the revenue. And the revenue sweet spot stays in that sort of $15 million to $150 million, give or take. We do look small, we do look bigger. And certainly, we have cash and dry powder to execute. So we’re just trying to find a good target that’s the right fit at the right price.

Michael Petusky: Obviously, you guys were pretty active for a long time in the last 5 years or so, it has been less so. Have you guys — other than maybe looking bigger, I mean, have you guys changed the approach at all in terms of hurdle, internal hurdle rates or anything like that? Or is it just, hey, we’re waiting for a pitch, and we just aren’t seeing our pitch.

David Roberts: I would say we haven’t really changed it. I mean, obviously, the last sizable acquisition we did was Artegraft, which was almost 6 years ago. We did a very small one acquisition, which some people might have missed in December. It was just a few hundred thousand of revenue over in Europe. But high level, no, I mean, I would say, since Artegraft, we did that, and it was COVID and then we’re integrating. But we’ve been hunting. I think one factor is that there just aren’t that many targets left in open vascular. So that’s piece A. Then piece B is, I think it’s taken us a little while to sharpen our focus in cardiac surgery, and I feel like we’re there now, which is why I think you hear me saying we’re fairly active with respect to making these nonbinding offers.

So we’re out there. And yes, I mean, on the one hand, I’m fully cognizant of the amount of cash we have, but I’ve done enough bad acquisitions to know that you’re really better off waiting for your pitch. And so we’re waiting for our pitch.

George LeMaitre: Mike, maybe a small add to that from George would be, I think in the last 6 years since we did the last big acquisition in June of 2000, I do think — and I think I mentioned this on one of these calls, I think we’ve gotten more self-confident about our ability to grow this company organically. So the last 3 or 5 years, the stock price has moved a lot based on organic growth. And I think when you prove that to yourself that you can run a business organically that well, you start feeling less pressure to do acquisitions. So I think maybe that sort of implicitly made the bar go up a little bit as well.

Operator: Our next question comes from the line of Michael Sarcone of Jefferies.

Michael Sarcone: Just wanted to start, George, you opened up the call talking about some opportunities and then growth drivers for Artegraft. I wanted to hone in on the Quick Stick claims. Maybe I was hoping you could help us frame the volume opportunity. I believe Gore Acuseal is kind of the primary competitor there. Help us frame the opportunity for what you could gain in share or volume growth if you did get the Quick Stick claim.

David Roberts: Mike, it’s Dave Roberts. I’m going to jump in on this and George can add color. Yes, you are right in identifying the Gore Acuseal. Whenever you buy a Gore Tex raincoat, you support Acuseal. So there’s that. And then there are FIXIN, there are other Quick Stick grafts on the market. Of course, Quick Stick really is focused on dialysis access and not peripheral bypass. Artegraft, it’s funny. Over in Europe, as George mentioned, it’s being used primarily for peripheral bypass. So a Quick Stick indication once the Europeans take up using grafts as part of their algorithm for dialysis access, the Quick Stick feature will really just help us in the U.S. And last year, our Artegraft sales in the U.S. were around $40 million.

We don’t really speak in TAMs too much around here. Do we think that Quick Stick will expand our sales of Artegraft? We do. And because we see these competitors, we know there’s a market. And so — but we feel also like this regulatory path is long for us. It could be 2 years, but it could be 5 or 6 years. And so we know the market is big enough that it completely justifies us investing the dollars to pursue that indication. But in terms of exactly how much bigger we expect the market to be, I don’t think we’re prepared to say that. We do think it will be materially bigger than our U.S. Artegraft sales today. But beyond that, I’m not so sure we’re ready to say exactly how much bigger.

Michael Sarcone: I guess just another one on Artegraft, just about the 53 centimeters, the longer length. How much — I guess I’m trying to figure out what does that do for pricing for you? Obviously, as George mentioned, one of the central focuses here is sustainability of pricing. So what kind of ASP bump do you get as you elongate the length of some of these grafts?

George LeMaitre: I think there’s a good market out there, and we’ve proven it with our Omniflow II product, which we’ve had out there for 5 or 8 years now. That’s the Ovine-based device out there, Mike. And so when we get to the longer Artegraft, and we’ll get there at some point, we’ve already proven the 50-centimeter has significantly premium pricing versus the rest of the entire Artegraft portfolio of catalog numbers, if you will, the other lengths. So I would say when you get up to 53, 55, 58, you are going to be able to get into premium pricing there. So as good as possible. And some other good news is that when we went into Europe, our manager over there put pricing above the American pricing, which is kind of rare, and it seems to be working. So it should be nice gross margin devices when we get there.

Operator: Our next question comes from the line of Brett Fishbin from KeyBanc Capital Markets.

Unknown Analyst: This is Will on for Brett. Quick question on gross margin. You expanded around 350 basis points, and you called out higher pricing as well as some manufacturing efficiencies. Could you just speak a bit to the split between those 2 items? And then can you just double-click on some of the manufacturing efficiencies? And how much more room do you see to take out cost?

Dorian LeBlanc: Yes. This is Dorian. Thanks for the question. The 350 bps year-over-year, it’s largely the pricing is also driven by some positive mix. We talked about the distribution business being down a little bit. That’s a lower-margin business overall. We also talked about the success of Artegraft, and that’s a very high-margin business. So that price and that positive mix helped to that 350 bps. And the manufacturing efficiencies, we’ve talked about this on several calls now. And it’s hard to identify really one single individual thing that we’ve done in the operations. But other than really maybe the theme of consolidating here in Massachusetts, which we do think long term gives us better operational efficiencies. But we have seen really good — Trent Kamke who runs our operations, Ryan Connelly, our engineering team, Andrew Hodkinson, who runs quality regulatory, I think have done a nice job of just building a culture of continuous improvement here.

So we’ve seen that come through in a lot of just discrete, what you call lean or Kaizen projects. Maybe the best way to articulate it is at the end of 2023, we had 211 direct labor employees in the company. And at the end of 2025, we had 175. So we continue to increase the number of devices that we’re manufacturing, and we can continue to do it with fewer and fewer direct labor heads. And that’s really a result of these automation projects, these lean kaizen type projects. And then we’ve also elsewhere in the cost structure, try to drive cost out over the last year. We did do some initiatives around freight and logistics in the back half of last year that really helped margins. We have been building out that footprint of warehouses across Europe, in particular, where we used to ship all the products from our German facility in Sulzbach to cover the European customers.

We now have operations with warehouses in Switzerland, in Italy, in Spain, in France and the U.K. And just being closer to the customer has a lot of commercial benefits, but it also has a lot of cost benefits around freight. So I think we’re just trying to continuously improve and drive cost out. And I think there continues to be opportunity for us there. But it really has been a great story, gross margin with the pricing and the abilities to just keep trying to continuously improve the operations.

Unknown Analyst: Then maybe just sticking with the theme of margins. The guidance implies material ramp up in operating margin to hit 29% for the year. How should we think about the next few quarters and eventually getting to a 4Q exit rate?

George LeMaitre: I think material here is that we have a 30% op margin coming at us in Q2, which is historically one of our better sales quarters. So that one is a little bit more obvious. But 29%, I don’t know what do we have keyed in here for the back half. We have 29% for the H2. So that implies H2 at 29%, but we don’t — we’re not splitting the quarters exactly right now. I hope that’s cleaning up. But I mean 30% is very close to 29%. So it’s a nice exit rate in any event. And what are we at this quarter? We’re at 27% right now. So a little bit better.

Dorian LeBlanc: This is Dorian. Maybe just to jump in a little there. Again, I think we did just talk through some of the investments that we plan to make in the back half of the year, some of the investments around Artegraft, talked about the Billerica warehouse and the Burlington manufacturing transition for RFA. But also, we do expect to ramp the sales force in the back half of the year and make other commercial investments. So 2025 was a year where the front half of the year was — had a little more expense, and we had a little less expense in the back half. 2026 will probably be a more normal year where you see the second half of the year have a little bit more OpEx than the first half.

Operator: Our next question comes from the line of Rick Wise from Stifel.

Unknown Analyst: This is Annie on for Rick. So my first one is just on the first quarter OUS Artegraft performance. I think I heard you call out $2.1 million in sales this quarter, which would sort of imply this annual run rate that’s a bit below your $10 million target for the full year. So I guess I’m just curious how you’re thinking about the sales cadence through the rest of the year, if you’re expecting sales dollars to continue stepping up each quarter or if there are any sort of seasonal dynamics that we should be conscious of and how you’re expecting to sort of get to that $10 million target?

George LeMaitre: Sure, sure. And if you go on a day adjusted look at this, Annie, 2.1 in those — in the first quarter winds up being an 8.6%, not an 8.4%. So we did do the math on that. But you have plenty coming at you. Q1 is always your lightest quarter at this company, always. Canada has approval. We should be shipping devices in Q4 or I think we’re saying H2 here at some point in the back half. And you also have the Southern European region kind of ramping up right now. So we felt good about that. We put that number out there at the last quarter, so we’re validating again this quarter. Makes sense to us. The ramp makes a lot of sense to us to get to $10 million.

Unknown Analyst: Great. And then maybe just one on RestoreFlow Allografts. I heard you highlight that you’re beginning distribution in Germany in the second quarter, I believe, and you’re expecting RFA to be approved in Ireland in the second half. Maybe you could just share your latest thoughts about the European RFA market opportunity and sort of the potential speed of adoption and revenue ramp there.

George LeMaitre: Right. That’s a good question. I would say it’s been a little — the Artegraft thing happened so suddenly. It sort of took front and center stage as a company last year and in this year. And I think RFA is kind of not as much focus from a regulatory perspective. But I think now the focus is on that, and these things will start coming soon. So I would say it’s been a little bit slow to start with and that we should see it speed up as we get more regulatory focus on that product line. Also in Germany, we got the approval, if you remember, in October, and we have not done one implant yet, and we’re still sort of building our supply of “German approved items” and they’re slightly different technical reasons. They’re slightly different than the American approved items.

And so it’s taken a little bit longer for us to build up stock there. Then maybe the Irish approval and audit by the Tissue Authority there is a little bit slower in coming than we expected. It took us a little bit longer to set up our Irish office, and you’re not allowed to ask them to inspect your facility until the facility is truly open. So a couple of those items there. But to go back to this, we just filed in Australia, and then there’s 5 European filings, which will take place in H2 of 2026, Austria, Holland, Belgium, Spain and Switzerland. So it’s starting to happen here. But we would admit it’s been a little bit light over there until now.

Operator: Our next question comes from the line of Danny Stauder from Citizens JMP.

Daniel Stauder: Just my first one on Artegraft, specifically on the point on making the longer sizes for light bypass. Could you talk about this decision? I mean it sounds like it’s higher dollar in terms of the sell point and maybe it’s more common in Europe. But are there any more recent trends from vascular surgeons that you’re seeing that’s leading to higher demand for these longer sizes? I guess in summation, the question is why now? And why are you pursuing this at this point?

George LeMaitre: Right. I think it’s always been very clear to our European colleagues that a 50-centimeter wasn’t going to make them happy and that it just barely qualified for what we’ll call fem-pop bypasses, which is just below the knee. They’ve always told us, yes, well, we can sell a 50, but George, we want 60s and 58 and 53s just like you provide us with that Omniflow graft. Again, I’m talking again about what I said. We sell Ovine Omniflow over there, and they’re longer, and that’s the market. They don’t really do AV access in general in Europe. And so in the U.S., where we sell mostly AV access artegraft, 50 centimeters has always been sufficient for the whole entire history of this device. So we figured, oh, let’s get going in Europe, but then we always knew. So this has been a project that’s been on our drawing board for a while, but it’s starting to get real now that we’ve got that CE mark.

David Roberts: I would add, Dan. This is Dave Roberts. The backdrop, if a patient has peripheral vascular disease, especially distally down the calf towards the foot, the smaller diameter, the artery, the more likely it is that an endovascular intervention, whether it’s an angioplasty or stent or atherectomy or whatever you have, isn’t going to be durable over the long haul. So that’s why we always see with our valvulotome a long bypass is what surgeons want to do with our allografts here in the U.S. and in Canada and the U.K., we’ve always seen the most demand for the longest allograft. So clinically, there’s a very good reason for it. But as George said, for us, our U.S. Artegraft business has been mostly dialysis access. It’s only since we got into Europe where they’re really adopting it for peripheral that it’s highlighted the need for a longer artegraft.

Daniel Stauder: Just following up on that line of questioning. Just in terms of the market opportunity, how much would approvals here expand your total addressable market for this business? Are there certain procedures that this unlocks? It sounds like it might be more so in Europe, but any more detail on patient population sizing or growth here would be great in terms of what this could offer you?

George LeMaitre: Right. Slightly complex answer, but the answer is we’ve given you a TAM, and I think we upped it the last time we met at $30 million for biologic grafts in Europe or international rather, OUS, let’s call it. And that always included the bovine graft, and we sold something like $6 million last year of bovine, and we plan to sell $10 million worth of this bovine graft Artegraft. So that’s 16 of the 30 TAM, but in knowing that we are already selling, it’s a little complex, in knowing that we’re already selling bovine for the distal bypasses for these longer bypasses, we already felt that was part of the TAM. So in the very short run, does this affect our TAM of 30 million? No. Though we should think about it for a while and come back to you guys on it. But in the short run, no, let’s stay with 30 million as the TAM.

Operator: Our next question comes from the line of Nathan Treybeck from Wells Fargo.

Nathan Treybeck: Just thinking about capital allocation, I guess, as we think about your opportunity set, either organically or through M&A, are there any product categories you would call out in open vascular, open cardiac where you’re seeing outsized momentum or maybe strategic underinvestment?

David Roberts: I mean for us — Nathan, this is Dave. It’s a great question. I think the first level consideration is open vascular versus open cardiac. And for us, open vascular is still the center of the fairway. But like I’ve said, there are limited targets set in open vascular. When you get to cardiac, we’re generally steering away from capital equipment, never say never. But the more important attribute for us is the niche market. And George emphasized that when he rattled off, I think, 5 of the key tenets of the LeMaitre playbook. We’re looking for these niche markets where we can acquire into a leadership position. We really like physician preference items that are differentiated that the surgeons are going to gravitate towards over time.

So the cardiac surgery market devices is, I’d say, at least 4x the size of the open vascular surgery market. So there are a lot of targets there. I’m not going to get specific for obviously competitive strategic reasons about the targets we’re interested in, but there are plenty of these interesting niches that we could acquire into. And then hopefully, they would exhibit the same financial characteristics over time that our organic products are these days.

Nathan Treybeck: How are you thinking about the RestoreFlow German launch in Germany? How are you thinking about the ramp and the contribution to growth this year?

George LeMaitre: I mean — this is George again. It’s all baked in the guidance, but I think we’re being quite cautious with what we’re baking into guidance because we don’t know. We’ve had one European launch over there, and it went fantastic. It was the U.K. But we haven’t seen it yet. We have less supply. We didn’t have supply issues the last time. The American and the British — what the Americans and the British accepted for acceptable tissue was the same. So we didn’t have a distinction. Now we have a distinction. Every single tissue that we send to Germany has to be sort of German qualified, if you will. So we’ve had a slower time. So I don’t — we don’t know. We’ve got very cautious numbers baked in the guidance. We shall see maybe there’s a little upside for everyone in this launch.

Nathan Treybeck: I could squeeze one more in. As we think about your guidance philosophy, I mean, we see 10% organic growth, and there was this distribution dynamic in Q1. Your guidance implies an acceleration through the rest of the year. I guess, how derisked is this guidance at this point?

George LeMaitre: I mean — if you look at tough comps, easy comps, I think the summer quarter is an easy quarter to beat up on. So you have that going for you. And in general, maybe even Q4 is something that we can do better than what we had here. But you look at our guidance history, I think, Dave, what do we hit like 77% of the quarters for sales guidance. We haven’t written on the investor preso out there. I think it’s something like that, Nathan. So this is like our 78th call. So we’re getting better and better at doing guidance, I think. But yes, there’s always risk. We don’t — I don’t think you would accuse us of sandbagging if we’re “on making it 75% of the time”. So we try to give you the best — the right number and then and we chase it, too. We’ll chase those numbers. They mean a lot to us.

Operator: Our next question comes from the line of Jim Sidoti from Sidoti & Company.

James Sidoti: Can you tell me what the operating cash and the capital expenditures were in the quarter?

Dorian LeBlanc: Sure. This is Dorian, Jim. Cash from operations was $15.1 million, and the CapEx was $2.8 million.

James Sidoti: You talked about the consolidation of the Chicago plant. Is that something you expect to be done by the end of this year?

George LeMaitre: Yes.

James Sidoti: I feel like I’d be missing something because I didn’t ask an autograph question on the call. It seems like that’s the topic of the day. You brought up Korea, Brazil, Vietnam, India. When do you expect those approvals?

George LeMaitre: 2027.

James Sidoti: Those are all 2027. So early, late, will they be contributing?

George LeMaitre: I mean, I wrote in the — we wrote in the script H2, but I bet you get one of them in H1 and 3 of them in H2, something like that.

James Sidoti: Okay. So they’ll be moderate contributors to 2027.

George LeMaitre: We haven’t even thought that through. We’re thrilled to get them, and that would make us have 56 approvals instead of 52, but they’re okay countries for us.

Operator: Our next question rather, comes from the line of Frank Takkinen from Lake Street Capital Markets.

Frank Takkinen: I was hoping to follow up on the distributor. Is there a chance that swings back in Q2 and the back half of the year? And then is this potentially a geography where you may elect to go direct?

George LeMaitre: Okay. So you’re talking about — when we talked about export in Q1 being a little bit light, yes, there’s a very good chance that it will swing back. Maybe if we look at maybe one fact that didn’t come out yet, which is if you look at April, you guys — we usually don’t do this, but just to give people some comfort there. In April, sales growth was 13%. It was 7% price and 6% units. And that’s a big hint that, yes, it was a temporary passing phenomenon. And one little step further here, Frank, the export business, interestingly enough, because we run around touting ourselves as a direct-to-hospital company. And lo and behold, if you really look at the facts, the export business of this company has a CAGR of 20% for the last — since 2019, so skipping over the pandemic, starting in 2019, the 7-year CAGR, if you will, is 20%.

And so that business continues to just do fantastic. And all it says to me is that the world is a very big place. We ignore it and the business keeps coming in, and then we use that to pick off places to go direct. You can see Poland, Mexico and Greece. If you’re in our building and you look at the walls at all these 2030 plank sets, it says Poland, Mexico and Greece. So you’re probably going to see that happen over the next 2 or 3 years, certainly Poland this year and then Mexico and Greece coming after that. But not worried. Very excited about the export business always. And we have 4 export managers right now or 3 and 1 being filled right now. And on our plank set, we plan to get to 8 export managers by 2030. So a place where we heavily invest because of the growth of the business as well as it produces great opportunities for us to go direct.

Frank Takkinen: Perfect. Thanks for the April bonus. And then on the Artegraft R&D projects you mentioned, my assumption to this answer is no, but is this at all kind of marking a transition to maybe looking more internally at the portfolio for other R&D opportunities in light of maybe the M&A — lack of appropriate M&A currently? Or is this just kind of one-off because Artegraft has had so much momentum?

George LeMaitre: That’s a good question. It’s a good way to look at it. I mean one of the nice things about being a company that doesn’t do too much R&D is that the R&D projects scream at you and you can’t ignore them for too long. So maybe we could put that in that category. This is very, very obvious stuff. And also, you’re allowed, if you don’t do too much R&D, you’re allowed to do some really low-risk, low beta projects. Making a longer tube is a very low-risk projects where we have high confidence that we’ll get that approved by Europe and the U.S. So I hope that gives you some color on the choice of R&D projects. Probably — I think we’ve said this before, and again, it’s on these plank sets. We do plan to do a little bit more R&D around here.

I think in the old days, we were targeting 10%. Now we’re maybe targeting 8% just because we’re at 6% and saying 10% seems false. But we should do more R&D around here. There’s a lot of projects. The larger you get, the more important — the more helpful a little bit of R&D is to each one of your 160 sales reps. And I think we’re becoming conscious of that.

Operator: Our next question comes from the line of Keith Hinton from the Freedom Capital Markets.

Keith Hinton: I just have a high-level question on business development. If you do decide to execute on a sizable deal in the cardiac space, just beyond the purchase price, kind of how should we think about the potential need for incremental investment to just bolster your commercial presence in cardiac? Is there kind of a level of near-term margin dilution that you’re willing to live with in order to bring in another growth driver for the out years?

David Roberts: Keith, it’s Dave. It’s a good question. And the answer is it depends. And what it primarily depends on is if the cardiac surgery product is a product that’s also used in vascular surgery because there are 5 or 7 crossover products like surgical sealants and figating clips and atraumatic occlusion devices like that and a relatively easy short learning curve, the answer might be no. We may not need a dilutive cardiac sales force. But if the product is a product that’s used exclusively in cardiac surgery, then I would say it’s much more likely. And the way we look at that is, okay, so maybe there is the need to establish some size of a cardiac sales force depends, of course, on the size of the acquisition and its geographic reach.

But if that’s the first step into cardiac surgery, then future cardiac acquisitions would leverage that channel to derive sales. So we’re always taking a very long-term view around here. We’ve done vascular acquisitions for almost 30 years. And I think we would do — we would have a long runway of cardiac acquisitions. So we pay attention to it, but it doesn’t really deter us because we have a long-term viewpoint.

Operator: Thank you. Ladies and gentlemen, that concludes today’s conference. I would like to thank you all for your participation, and you may now disconnect. Have a great day.

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