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LeMaitre Vascular, Inc. (NASDAQ:LMAT)

Q3 2011 Earnings Call

October 27, 2011 5:00 PM ET

Executives

J.J. Pellegrino – Chief Financial Officer

George LeMaitre – Chairman and CEO

Dave Roberts – President,

Analysts

Joshua Zable – WJB Capital

Jamar – Canaccord Genuity

Joe Munda – Sidoti & Company

Larry Hemowich – HMPC

Operator

Good day, ladies and gentlemen. And welcome to the third quarter 2011 LeMaitre Vascular Earnings Conference Call. My name is Tania, and I will be your conference moderator for today. At this time, all participants are in a listen-only mode. (Operator Instructions)

As a reminder, this conference is being recorded for replay purposes. I would now like to hand the presentation over to our host for today, Mr. J.J. Pellegrino, Chief Financial Officer. Please proceed.

J.J. Pellegrino

Thank you, Tania. Good afternoon. And thank you for joining us for our Q3 2011 conference call. Joining me on today’s call is our Chairman and CEO, George LeMaitre; and our President, Dave Roberts.

Before we begin, I would like to read our Safe Harbor Statement. Today, we will discuss some forward-looking statements, the accuracy of which are subject to risks and uncertainties. Wherever possible, we will try to identify those forward-looking statements by using words such as belief, expect, anticipate, forecast and similar expressions. Please note these words are not the exclusive means for identifying such statements.

Please refer to the cautionary statements regarding forward-looking information and the information under the caption Risk Factors in our 2010 10-K and subsequent SEC filings including disclosure of the factors that could cause the actual results to differ materially from those expressed or implied.

During this call, we may discuss non-GAAP financial measures. Please refer to our earnings release and our website www.lemaitre.com for discussion and reconciliation of non-GAAP financial measures.

I’ll now turn the call over to George LeMaitre.

George LeMaitre

Thanks, J.J. I’d like to break my comments down into three headlines. First, Q3 was good quarter, sales were up 7%, operating profit was $2 million and cash increased by $1.7 million. Second, after three quarters of restructuring, LeMaitre Vascular is position to deliver higher growth rates and higher gross margin. And third, The UnBalloon and Over-the-Wire LeMaitre Valvulotome should launch in Q4 or Q1.

As to the first headline, in Q3 we posted 7% sales growth to $14.6 million and $2 million of operating profit. Some of the recent quarters, sales growth was strongest in the Americas and in our vascular category, LifeSpan, Valvulotomes and carotid patches produced a significant portion of our dollar sales growth.

In tight operating expense control which is flat to Q3 2010 enabled us to post a healthy 14% operating margin, cash also increased by $1.7 million in the quarter, despite $1 million of share repurchases and dividends.

As to our second headline, with our five initiatives behind us, we are reoriented our company to be more vascular, more direct-to-hospital and more efficient. As a reminder, the five initiatives were as follows.

We terminated Endologics Stent Graft distribution. We sold our TAArget and UniFit Stent Graft business. We closed our Italian factory. We closed our California factory. And finally, we went direct in Spain and Denmark.

In times these five initiatives will enable us to focus on our dominant vascular brand, widen our direct sales footprint, move to higher margin products, manufacture more efficiently and finally, post higher growth rate.

Our third headline is probably the most exciting. We have two upcoming new product launches, The UnBalloon Non-Occlusive Modeling Catheter and Over-the-Wire LeMaitre Valvulotome. We have our regulatory approvals for both devices in the U.S., as well as Europe. We are halfway through our post-approval data trials for both products and we are anticipating launches in Q4 2011 or Q1 2012 for one or both devices.

The UnBalloon is a catheter based expandable nitinol cage, which aids in aortic stent graft implantation, once the stent graft is been implanted The UnBalloon is delivered to the site over a guidewire and inflates like a balloon to tact down the edges of the stent graft.

Modeling as this is called prevents blood from leaking back into the weaken artery. Modeling is strictly performed using an exclusive latex balloon catheter. The problem is that blood pumping out of the heart jack-hammers the top of the balloon with every beat sometimes causing stent graft migration.

The UnBalloon eliminates jack-hammering because the blood passes straight through nitinol cage. The Non-Occlusive UnBalloon is an intuitive and elegant solution and we are seeing high physician interest. We have successfully completed 18 of our 30 data case.

The Over-the-Wire LeMaitre Valvulotome is the sixth generation our flagship device. As the name implies, our valvulotome has been redesigned to track over our guidewire allowing for easy access and repeatable device passage.

As you may know, the majority of vascular catheters have a central lumen and are inserted into the vasculature over a guidewire, guidewire facilitate initial access. The vascular catheter is then easily able to find its way back to its destination. Some people call guidewires the railroad tracks of vascular surgery.

The Over-the-Wire LeMaitre Valvulotome is the first valvulotome to ride over guidewire, given our leading share in this niche we plan to leave our current expandable valvulotome on the market and give vascular surgeons a choice. We have successfully completed 15 over-the-wire data case. Assuming these two data trials continue to go well, these launches could prove to be commercially significant.

I’ll repeat the three headlines from the quarter, number one, Q3 was a good quarter, sales were up 7%, operating profit was $2 million and cash increased by $1.7 million. Number two, after three quarters of restructuring, LeMaitre Vascular is position to deliver higher growth rates and higher gross margin. And finally number three, The UnBalloon and Over-the-Wire LeMaitre Valvulotome should launch in Q4 or Q1.

And, with that, I’ll turn the call over to J.J.

J.J. Pellegrino

Thanks George. I’d like to start by giving some color on our Q3 financial results, review our special charges and conclude with some remarks about repurchases, dividends and guidance.

Q3 2011 sales were in line with our expectation at $14.6 million, a 7% increase over the prior year. Geographically, the Americas increase 8%, Japan was up 25% and Europe increased 2%.

Sales in the Americas and Japan were solid, while in Europe our transition away from stent graft and the microeconomic environment hampered results. Worldwide organic sales growth was 4% in the quarter.

Moving down to P&L, we reported a growth margin of 69.9% in Q3 2011 versus 76.1% in Q3 2010. The decrease was largely due the continued AlboGraft transition costs in Burlington, as well as shift in sales mix.

With regard to AlboGraft, we believe the transition from Italy to Burlington is rounding third and we should see improvement soon.

With respect to product mix, increase sales of carotid patches, inclusion of LifeSpan and a large stent graft all negatively affected the Q3 gross margin. We expect that our gross margin should improve 1% to 2% in the coming quarters. Further down the line, the California factory closer should give us some gross margin upside as well.

Q3 2011 operating income was $2 million, matching our Q3 2010 operating income. Excluding a $735,000 gain from the Endologix termination and restructuring charges of $394,000, adjusted operating income was $1.7 million in Q3 2011. This compares favorably to adjusted operating income of $1.1 million in Q1 and $1.5 million in Q2. 2011 operating expenses continue to be constraint.

I’d like to make a quick point about special charges, over the last several quarters OpEx special charges related to our five initiatives have declined from $2.2 million in Q4 2010 to $1.1 million in Q1 2011 to $650,000 in Q2 2011. In Q3 2011 we had a net gain of $340,000. These declining charges roughly reflect the operational progress we have been making. Going forward, we expect a cleaner P&L.

Turning to the balance sheet, cash and marketable securities as of September 30, 2011 were $23.1 million, an increase of $1.7 million during the quarter. This increase included the receipt of the $1.3 million distribution termination payments from Endologix, dividend payments of $310,000 and share repurchases of $734,000.

We have grown cash steadily throughout 2011, in fact, from eight year of $18.8 million in February cash balance has risen by over $4.3 million. Further, if we add back share repurchases and dividend, cash balance is would have increase $6.1 million since February.

With regard to our share repurchase program, since we begin in August 2009, we have repurchased approximately $4.2 million of our stock at an average price of $5.96 per share. Our Board has authorized us to purchase up to a total of $5 million through the end of 2011.

Our fully diluted share account has remind essentially flat since the inception of the program. Our stock repurchases have been partially offset by employee stock grants.

Turning to guidance, we expect Q4 2011 sales, $14.2 million, up 9% organically versus Q4 2010 and reported operated income of $1.2 million. We also expect 2012 full year sales of $59 million, up 8% organically versus 2011 and reported operating income of $6 million, up 50% versus 2011.

Our Q4 2011 and full year 2012 guidance includes the effects of our exit from stent graft. These devices carried a roughly 55% gross margin and accounted for $6.8 million sales in 2010 and $4 million of sales in the first nine months of 2011.

As a result, the exit from stent graft will decrease sales by approximately $1.3 million per quarter and gross profit by approximately $700,000 per quarter going forward. We do not expect to report stent graft sales in Q4 2011 and full year 2012.

Except as otherwise stated all guidance amounts exclude the effects of future acquisitions, foreign exchange rate changes, distributor terminations and factory consolidations.

With that, I would like turn the call back over to the Operator for Q&A.

George LeMaitre

So, Tania, I don’t know if you there, we see Joshua Zable in the queue.

Question-and-Answer Session

Operator

Yes. (Operator Instructions) Our first question will come from the line Joshua Zable with WJB Capital. Please proceed.

Joshua Zable – WJB Capital

Hey, guys. Congrats on a nice quarter. Thanks for taking my questions here. Can you hear me okay.

George LeMaitre

Yeah. Of course, we can Josh. Thanks.

Joshua Zable – WJB Capital

Great. It’s nice to have a lot of the stuff behind us and start to look at some clean numbers here, so very, very helpful, we appreciate it. I have a number of questions. I’ll run through them quickly. Just, J.J. first on housekeeping, on the gross margin, just pro forma basis, what was that at, just trying to run through the math, I have 70%, is that right or am I too late on that?

J.J. Pellegrino

And by pro forma, what do you mean…

Joshua Zable – WJB Capital

Ex any…

J.J. Pellegrino

…quarters.

Joshua Zable – WJB Capital

No. I mean, for Q3 ex-impairment or anything like that, is that the right number, $69.9, trying to make sure I’m not missing anything there?

J.J. Pellegrino

$69.9 was the reported number Josh, and about 3.5% of the delta from last year was because of the AlboGraft startup, another $2.5 or so was from mix.

Joshua Zable – WJB Capital

Okay. So, again, I know that’s not really far up the $71 where you been, but the sort of lighter versus this year, if you will was really more function of mix then anything else?

J.J. Pellegrino

I think this year really AlboGraft was the big drag on the gross margin and we’ve been at the high 60s for the last three quarter and I think what we are saying is, as we think around in third on that project, hopefully we’ll see some improvement in the gross margin line as excessive costs from that project a bit.

Joshua Zable – WJB Capital

Great, great. And then, as we think about next year both The UnBalloon and the valvulotome or the new vasculartome, I know have a lot of potential, I know you guys are excited, we are excited about it, just sort of it’s even unclear kind of what the potential is. But I guess, when you think about guidance next year, to what extent have you accounting for these guys launching, could you give us any sense sort of are these guys upside to the numbers or these guys part of it or what kind of what do you thinking around them? Thanks.

George LeMaitre

Sure, Joshua. This is George. So the number that we get baked in our head is about $1 to $1.5, obviously if things go fantastic, it could represent upside. Although, we have found over the years, the first year of a launch is a little bit, slow, you still get your feet underneath you. But I would say, $1 million to $1.5 million is inside those numbers next year already.

Joshua Zable – WJB Capital

And that’s for each product or for the combination of the two?

George LeMaitre

Combination.

Joshua Zable – WJB Capital

Oh! Nice. Okay. Great. And then, just looking to international numbers, the international growth is a little bit lighter then it has been, I know that can get kind of lumpy but you did sort of, you are direct in Spain, Denmark, now you talked about that, I know there is a lot of macro headlines going on. So there is macro stuff going on and then I know you guys are sort of transitioning to try and go more direct.

Could you just kind of talk about that and as you think about that 8% for next year and next quarter what not sort of trajectory U.S. versus international just how you think about it? Thanks.

George LeMaitre

Okay. Great. So one key stat to think about it, this transition I think has been, it explains a lot about Europe for us, the transition from stent graft company to non-stent graft company has been significant and we just did some quick numbers before we got on the call for this question.

Approximately 50% of our European sales force and clinical specialist group has either been terminated because we didn’t clinical specialist going forward or had quit voluntarily since we announce at the last October 28th call a year ago that we were about to get out of stent graft.

So we had full 50% flip of the sales force over there, Josh, and I would say, I think fundamentally that accounts for the slowness in Europe. As your second part of that question the macroeconomic environment. Yeah, it’s true that we are having issues over there in Europe. I think all of our companies are noticing that, one direct cognate anecdote for us just to show you how it does matter to us.

I think about three years ago we had €500,000 a year business in Greece. We have zero euro a year business in Greece affectively right now. So the Greece, the strikes that you see happening in Greece on the television have clearly come home to [Ruse] for medical device companies and lot of our bigger peers are just pulling out of Greece all together.

So we’ve got our own issues, which is the slow existing stent graft but we’ve also seen a macroeconomic environment effect us. That being said to get fully back to the beginning of your question. We’re pretty optimistic about next year. I actually forget right now in budget what the spread of the growth rate is between Europe and U.S. next year. But I think I think it’s pretty equally, I don’t think there is material difference between what I am expecting out of my American crew and what I am expecting out of Europe.

Joshua Zable – WJB Capital

And then just final question here, George, just as far as thinking about next years ramp so to speak, I mean, should that the ramp whether do you start gain momentum again, I know you guys, J.J. I know you talked about margin assuming sort of so we can see ramp there on the sales line kind of pretty consistent across the Board or should we start to see a ramp as new product, I mean, I know you haven’t baked in too much, I’m just trying to think about it properly so we model it properly? Thanks guys. Congrats again.

J.J. Pellegrino

Thanks a lot Josh. I appreciate that. I would say, I would look to the last three years and look it what our break down is per quarter, I know the summer is always at the week, I know the Q4 is always little better than a summer. And then I would say latter into the that, I think you are going to see, our sales force right the second is it 71 sales reps probably end of the year more in the 75, 78 range and will probably roll through the year with 80 reps. So we’re going to have a good rep increase when they really become operational maybe it is six months after they hired. So maybe a little bit more ramp although I don’t know dramatically so.

Joshua Zable – WJB Capital

Great. And one last thing just, do you guys know up here the sales rep last quarter just I am trying to catch sequentially where you are at, if you added this quarter?

George LeMaitre

I can tell you in a (inaudible), okay, 64 here.

Joshua Zable – WJB Capital

Okay. Great guys. Thanks very much.

George LeMaitre

Thanks, Josh.

Operator

Our next question comes from the line of Jason Mills with Canaccord Genuity. Please proceed.

Jamar – Canaccord Genuity

Hey guys [Jamar] calling in for Jason.

George LeMaitre

[Jamar], how are you doing?

Jamar – Canaccord Genuity

Doing pretty good. Thanks for taking my question. The first one what is your Vascular growth rate in Europe this quarter?

George LeMaitre

Negative 4%.

Jamar – Canaccord Genuity

And then just in terms of procedure growth in Vascular, what are you seeing I mean in the different geographies?

George LeMaitre

I guess, I’d answered that by saying that the organic growth rate was 7% in U.S. negative 4% in Europe and 4% in Japan. And I think that as close as I can come to understanding underlining procedures.

Jamar – Canaccord Genuity

Okay. Then in terms of being in ready to launch the (inaudible) so you had 15 beta procedure, how many total in that product that you guys going to have?

George LeMaitre

I think on both sides the UnBalloon, as well as over the (inaudible) we are searching for 30 cases, that we’re roughly half way through each trial.

Jamar – Canaccord Genuity

Okay. Great. And then a last one just for modeling. What are you thinking about in terms of restructuring charges for Q4 and then is Q4 should had been done?

J.J. Pellegrino

Yeah. I think we -- probably what we’re telling flocks here today is, you’ve seen a nice trend in restructuring through this quarter. And going forward, we should fairly clean quarter on the restructuring line. So probably nothing like the numbers that you have seen over the last three quarter, pretty muted.

Jamar – Canaccord Genuity

Okay. Great. Actually I do have a one last one. I mean have you guys and you probably not going to give it direct answer but in terms of what you are seeing in out there for tucking acquisition are you moving forward, still looking a better or anything near term?

David Roberts

Hi, Jamar. It’s Dave. Yeah. We’re definitely out there looking like we always do. I don’t comment typically on the pipeline, but obviously we’re continuing to generate cash and we’re continuing look and when we see a target that meets our criteria and it’s reasonably price we’ll execute on it.

Jamar – Canaccord Genuity

Okay. Great. And just to be clear there none of that in guidance?

David Roberts

Right.

Jamar – Canaccord Genuity

Okay. Great.

J.J. Pellegrino

You know Jamar, it is worth pointing out that there’s an option to buys that XenoSure Product line, which we currently distribute on January 2014, so that’s potentially use to cash out there in the terms we’re all set between the two companies just to exercise the auction.

Jamar – Canaccord Genuity

Okay. Great. Thanks a lot.

Operator

Our next question comes from the line of Joe Munda with Sidoti & Company

. Please proceed.

Joe Munda – Sidoti & Company

Good afternoon guys.

J.J. Pellegrino

Hi, Joe.

Joe Munda – Sidoti & Company

Real quick just phone up with what you’re set on XenoSure how much -- what is the revenue run rate for XenoSure ballpark?

George LeMaitre

I’ll give a range, we’re not, we don’t love to get into the exact details of the product, but something like $2 to $4 million.

Joe Munda – Sidoti & Company

$2 to $4 million. And what is the factor right now in (inaudible) what’s the capacity, what is it running out right now?

George LeMaitre

I would say you got a lot of capacity you could utilize. It’s -- we have 28 people in the factory right now and I would say unit wise on some of these devices we only need 5000, 7000 units a year. And we can probably make with the team on hand, about 12 to 15,000 units a year.

Joe Munda – Sidoti & Company

Okay. So roughly in a 40 to 50 range you guys are running at.

George LeMaitre

That’s fair. Yeah.

Joe Munda – Sidoti & Company

Okay.

David Roberts

And that’s just that’s a upper website. And generally speaking Joe, we’re just running one shift by enlarge so you can run another shift.

Joe Munda – Sidoti & Company

Okay. So I guess then what Dave has just said within acquisition are you looking to feel that access capacity, I mean is there another way to leverage growth there?

David Roberts

That Joe, this is Dave. Depends on product line you acquired typically the manufacturing activities associated with an acquisition a little bit unique. And we have to take a little bit more space, but you do gain operating leverage by eliminating a lot of the duplicate overhead. So there is some leverage but it doesn’t it necessarily fits in exactly to the foot print we have here it just depends on what you acquire.

Joe Munda – Sidoti & Company

Yeah. I mean, with the model B then like similar in the past by, let say the facility and move it to Burlington?

David Roberts

Yeah. Absolutely and the timing of that, just depends on the nature of the product you acquired and the complexities or lack of the manufacturing.

Joe Munda – Sidoti & Company

Okay. And my last question to your comment George about Greece, you guys said you had 500,000 all the business there and now you have zero. I am not (inaudible) but with what’s going on there it seems that Europeans are still a ways away, that could be more problem there. What happens to your other businesses in other countries, France and Spain or Italy? What are you plans for that?

George LeMaitre

Sure. So interestingly enough last months, I flew directly from Athens to Milan to Madrid to do a trade show and to visit two offices. And I would say for my own eyes and again I am just one person here, but I do draw big line between the Greeks and the Italian in these standards, in terms of how close they are to budget control and thing.

So I am not quite as worried although, you can read the Wallstreet Journals as well as I can, there’s some risk and some fear. I would say that is balanced out by -- you can look at our income statement right now and figure out that we are turning into an American company ironically from having being a European company for a long time.

So as we drop the (inaudible) business that was $6 million in 2010 of European revenues that’s all gone now until percentage wise this company is now something like 65% U.S. and also of the European revenues most of it is coming from the Northern countries we started in Germany and so we got Holland, Belgium, France, Austria in the Northern countries producing a lot of our income and I have a dramatic less fear about what’s going to happen in German economy than Spain and Italy.

Joe Munda – Sidoti & Company

Okay. And plans for push into Asia by any chance?

George LeMaitre

Well, it’s an interesting comment about where else do we do next, because we basically got in Europe, Finnish and we’re in Japan in the U.S. we see ourselves has been in eight of the top 12 Vascular market in the world and the only one -- the big one’s are main I should say are the big countries and I think we’re sort of looking ourselves and trying to figure out, if we want to go to Brazil or China next and then when that make sense to go.

Joe Munda – Sidoti & Company

Okay. And what would -- what is that high opening moment that pushes you guys to go, what you need to fix?

George LeMaitre

Right. One of the things, we think about here is that we’re publically trading company we have an income statement to present to you guys every quarter. And so we feel like we’re just gone through a lot of this transition and particularly one direct in Spain and Denmark in the last year, but if you look back over the last 10 years, we probably picked up one of these countries every year and half.

And so for now, I think we’re good although, as we start to normalize here and we just start to get further away from these charges that we’re talking about I consider myself to be very adventures geographically for a small company so you can probably expect to see some of that in the future.

Joe Munda – Sidoti & Company

Okay. So what is it cost added to distributor, lets say you’re going to add one to Brazil what would it cost on average what has it been in the past?

George LeMaitre

I am sorry, I miss understood the question, I thought you meant, when do we go direct in the next market. We already have distributors in all these countries…

Joe Munda – Sidoti & Company

I am sorry -- no, no -- I am sorry I mean direct, I am saying what would if cost be direct in those countries for say.

George LeMaitre

Yeah. I mean it varies on how aggressively you go after you can put 200 people down there and just kind of be managing distributor or you can go whole heart, like I say we just did in Spain, we have five employees in Spain roughly €40,000 and employees. So it’s a pretty expensive endeavor in all of these countries and you don’t want to go direct in all the countries because they would initially produce losses at the beginning.

Joe Munda – Sidoti & Company

Okay. All right. Thank you.

George LeMaitre

Thanks a lot.

Operator

(Operator Instructions) Our next question will come from the line of Larry Hemowich with HMPC. Please proceed.

Larry Hemowich – HMPC

Good afternoon, gentlemen.

George LeMaitre

Larry.

Larry Hemowich – HMPC

George. Subjective question or more qualitative question, we talked a little bit we talked quite bit of your, what are you seeing in the way of pricing pressure in the U.S. And I know the part of your business model over the last several years is that you have been able to implement price increases in a regular way and seemingly without a lot of push back has that change it all for you in the last few months?

George LeMaitre

Sure. So we had our price increase on January 1st, in the U.S. when we plan to do another price increase January 1. You know I have to admit reading all the headlines I do get a skittish about all the price increases going forward. So I think in to go against that I think we’ve widen our sales force Larry and now we’re going to be carrying a sales force next year just dramatically larger then this year.

So hopefully they can get some more unit growth to go with the price hike. But yeah, Europe saw this more challenging and in April Japan puts through -- this April they put through a 5% essentially a 5% deflate and then two years from now they will do that again.

So there’s challenges in Europe, I think we got a 1% price hike this year and I think that did stick in Europe generally speaking, but in Japan we were down roughly 3% in price and in U.S. basically we are up 4% or 5% in price we generally get our price hike, but I agree it’s going to be more challenging going forward everything you read means it’s going to be more challenging.

Larry Hemowich – HMPC

And specifically the U.S., I was talking to (inaudible) who has been calling on Cath Labs and in the hospital lab and so it the pricing pressure he has notice over the last several month is really accelerated just, have you guys seen that in push back on your U.S. pricing?

George LeMaitre

I don’t specially, if we have but I file on a little bit and I would say we’re also seeing the level of democracy of getting into hospital and getting new products approved is sky rocket in the last five years, you have to be batched et cetera to go into hospital nowadays. So yeah, we see it coming, it’s worse in the future then it was in the past.

Larry Hemowich – HMPC

Yeah. He was saying that too and he said even on companies got a really good proprietary product, the problem there is that the doctors wanted to purchasing agent or maybe stock just a few ways, but they can’t get good stock because purchasing agent doesn’t want to put too much new stock in new product et cetera.

So yeah, so Joe second question could you provide a little more color into my favorite products Valvulotome you’ve discuss the your own sense of what these new improvement will bring. And then second one little more update on UnBalloon what’s specifically is going on in the U.S. with the regulatory side on UnBalloon.

David Roberts

Okay. Great. Well, let me give you a simple answer which up flip, I go with UnBalloon first, what else there without regulatory approvals on both side of Atlantic’s for both of these products so all the remains is for us to complete our internal self appointed post market, post approval data trial and we are half way through both of those trials. So all of which is for us to say we feel great about the performance of the device they will be willing to risk they will make brand name watching over the device, you don’t have to wait for the FDA or a CEA mark on anybody…

Larry Hemowich – HMPC

Okay. So you actually 5 to 10K approval now for UnBalloon?

George LeMaitre

Yeah. That happened in Q3 as did the overwhelming (inaudible) as well.

Larry Hemowich – HMPC

Okay. I may have missed that in the color so but that’s must be encouraging because you are little worried, as we talked in the past about the timing of FDA approval so that must feel encouraging to have gotten those approvals.

George LeMaitre

We are in a lost regulatory department has done a great job with this filling lately, so yeah, we’re excited about that. As for the (inaudible) you know you watch all our report the things is being work force that continues to grow for us it’s been great. I am excited about this over the, because it’s our first real serious change to the platform in quite a while.

And when you work on a big slug of revenue, like the (inaudible) is right now, if you can make it tweak that’s just 15 or 30% you can impact big revenue stream so that’s why I am excited to go after the (inaudible) with this new tweak and would be UnBalloon it’s obviously all (inaudible) and so it’s an exciting device the doctors are thrilled about it, but we’ll see how that translates into action as we start selling this things.

Larry Hemowich – HMPC

Yeah. And just a quick question to JJ, then I jump back, so JJ on the share buyback I want to make sure I heard, did you say you’d spend 4.2 of $5 million authorized?

George LeMaitre

We have, we spent about 725 grant in the most recent quarter 4.2 total, so about a 100 grant left.

Larry Hemowich – HMPC

And how many shares approximately have you bought back, last since the buyback just a rough ballpark number?

George LeMaitre

Yeah. About 700,000 shares.

Larry Hemowich – HMPC

700,000 and those were all accounted for by new options et cetera.

George LeMaitre

Almost.

Larry Hemowich – HMPC

Okay. Great. Thank you very much.

George LeMaitre

Thank you, Larry.

Operator

At this time there are no further question in the queue. I would now like to hand the conference back over to Joe Pellegrino for closing remarks.

J.J. Pellegrino

Thank you very much, Tania. First I’d like to thank all the participants on this call. I’d also like to mention that we’ll speak at the following Investor Conferences over the next couple of months. We’ll be at the Lazard conference on November 16, the Canaccord Conference on December 6th, this Mid West Conference on December 8th, and the Sidoti Conference on January 9th. With that I’ll turn the call back over to Tania. Thank you very much.

Operator

Thank you for attending today’s conference this concludes the presentation you may now disconnect. And have a great day.

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