LMAT 10-K & 10-Q changes, risk factors and insider trading
Lemaitre Vascular Inc. · Nasdaq · Surgical & Medical Instruments & Apparatus · CIK 1158895 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “Summary of Risk Factors”
New heading “Adverse global economic conditions and trade tensions could have a negative effect on our business, results of operations, and financial condition and liquidity.”
New heading “Cybersecurity breaches, loss of data and other disruptions could compromise sensitive information related to our business or prevent us from accessing critical information and expose us to liability, which could adversely affect our business and our reputation.”
New heading “We depend on our information technology and telecommunications systems, and any failure of these systems could harm our business.”
Removed heading “Significant disruptions of information technology systems or breaches of information security systems could adversely affect our business.”
Removed heading “Risks Related to Human Resources”
Removed heading “Employee equity awards may provide less of an employee retention benefit if the price of our common stock is unable to grow beyond the record highs it has recently achieved.”
Largest changes
“The risk of a security breach or disruption, particularly through cyber-attack or cyber intrusion, including by computer threat actors, foreign governments, and cyber terrorists, has generally increased as the number, intensity and sophistication of attempted attacks and intrusions from around the world have increased. Our information technology and telecommunications systems are essential to the operation of our business and our ability to perform day-to-day operations. …”see in full comparison
“Any security breach or interruption, as well as any action by us or our employees or contractors that might be inconsistent with the rapidly evolving data privacy and security laws and regulations applicable within the United States and elsewhere where we conduct business, could result in enforcement actions by state or federal governments or foreign governments, liability or sanctions under data privacy laws that protect personally identifiable information, regulatory penalties, other legal proceedings such as but not limited to private litigation, the incurrence of significant remediation …”see in full comparison
“Cybersecurity incidents, data breaches, failures of information technology systems, and reliance on third-party service providers could disrupt operations, compromise sensitive information, expose us to regulatory actions or litigation, and harm our reputation.”see in full comparison
“Cybersecurity breaches, loss of data and other disruptions could compromise sensitive information related to our business or prevent us from accessing critical information and expose us to liability, which could adversely affect our business and our reputation.”see in full comparison
“Adverse global economic conditions and trade tensions could have a negative effect on our business, results of operations, and financial condition and liquidity.”see in full comparison
“Significant disruptions of information technology systems or breaches of information security systems could adversely affect our business.”see in full comparison
Full comparison: every changed paragraph (171)
Summary of Risk Factors
Our business, financial condition, results of operations, cash flows and the trading price of our common stock are subject to numerous risks and uncertainties, including, but not limited to, the following:
We may not be able to maintain our historical profit growth rates, which have been driven by pricing increases, sales force expansion and operating leverage, and our operating income results may vary significantly from period to period.
Our ability to grow sales and maintain profitability depends in part on our ability to increase prices or avoid price concessions; competitive pressures, reimbursement changes, healthcare cost containment efforts, and customer purchasing behavior could limit pricing flexibility.
We operate in highly competitive medical device markets and face competition from companies with greater resources, broader product portfolios, more extensive distribution networks and alternative technologies, including endovascular procedures.
A significant portion of our growth has historically depended on acquisitions, and our inability to identify, complete or successfully integrate acquisitions or develop new products could adversely affect our growth strategy and operating results.
Adverse global economic conditions, trade tensions, tariffs and currency fluctuations could reduce demand for our products, increase costs and negatively affect our international operations.
We derive a substantial portion of our sales from outside the United States and are subject to risks associated with international operations, including regulatory complexity, reimbursement changes, distributor relationships, foreign exchange volatility, political instability and compliance with anti-corruption and trade laws.
Our reliance on sole-source and limited-source suppliers, including suppliers of biologic and tissue-based products, exposes us to supply disruptions that could delay production and processing, increase costs or result in lost sales.
Some of our products are sold to clinical call points outside our core vascular surgeon customer base, and our sales representatives may not be successful in expanding adoption in those markets.
Cybersecurity incidents, data breaches, failures of information technology systems, and reliance on third-party service providers could disrupt operations, compromise sensitive information, expose us to regulatory actions or litigation, and harm our reputation.
The ongoing implementation and expansion of our enterprise resource planning system presents operational and internal control risks that could disrupt business processes and financial reporting.
Our tissue processing, preservation and cryopreservation services are subject to unique operational, sourcing and regulatory risks, including donor tissue availability, accreditation requirements and compliance with complex human tissue laws.
Disruptions at our manufacturing or processing facilities due to natural disasters, accidents, equipment failures or other events could impair our ability to manufacture and distribute products.
The use or misuse of our products or tissues may result in product liability claims, recalls or regulatory actions that could be costly, damage our reputation and adversely affect our business.
We are subject to extensive and evolving domestic and international regulatory requirements governing medical devices, human tissue, regulated substances, data privacy and healthcare compliance, and failure to obtain or maintain required approvals, certifications or compliance could limit our ability to sell products or result in enforcement actions.
Our convertible senior notes require ongoing cash payments, may constrain financial flexibility, expose us to liquidity risks, and could result in dilution of our stockholders upon conversion.
Our ability to protect and enforce our intellectual property is limited, and claims that we infringe third-party intellectual property could result in costly litigation, product redesigns or loss of market access.
The market price of our common stock may be volatile due to factors beyond our control, and our Chief Executive Officer and Chairman’s ownership position may influence matters requiring stockholder approval.
We may not be able to continue paying dividends at historical levels, or at all, depending on our financial performance, capital needs and contractual restrictions.
Our operating income grew 30% in 2025 and 42% in 2024. This growth resulted principally from the growth of our sales force, average selling price increases, and operating expense restraint. If we are unable to replicate these favorable factors (or others) in 2026 or future years, our operating income growth could slow or disappear. Other factors that may affect our profitability growth include:
the level and timing of future sales, manufacturing costs, and operating expenses;
changes to our pricing strategy;
the productivity and growth of our direct sales force;
global economic conditions and trade tensions;
fluctuations in foreign currency exchange rates;
market acceptance of our new products and services;
our ability to successfully build direct sales organizations in new markets;
our ability to successfully acquire and develop products;
our ability to successfully integrate acquired businesses;
the impact on our business of competing products, technologies, and procedures;
our ability to obtain or maintain regulatory approvals;
reimbursement rates for our medical products and procedures;
the cost of litigation and other events such as cybersecurity incidents; and changes in tax laws.
Operating income growth may also vary significantly quarter-to-quarter due to fluctuations in our business that may be driven by the timing of, among other things, acquisitions, new product introductions, product discontinuations, product recalls, regulatory approvals, sales incentive programs, litigation, changes to tax law, and changes to our sales force or other personnel.
In recent years a material portion of our sales growth has been driven by higher average selling prices, particularly with respect to our valvulotome and carotid shunt products. We cannot guarantee that we will be able to continue to increase selling prices at the same pace. The following factors, among others, could inhibit our ability to increase prices, in the future:
customer tolerance for additional price increases;
competitive pressures discussed below in these Risk Factors;
product defects, failures, or recalls negatively affecting the reputation of our business or products;
reductions in healthcare spending, particularly in the United States, in response to government-enacted healthcare reform, general economic conditions, or the influence of accountable care organizations;
reductions to reimbursement rates for the medical procedures in which our products are used; and certain marketplace changes, such as hospitals joining group purchasing organizations, integrated delivery networks, and managed care organizations.
The segments in which we primarily operate are competitive, subject to change, and affected by new productproduct, and in some cases, procedure, introductions. Our competitors vary by product line, as no company directly competes against us with respect to all our offerings. Certain competitors:
have substantially greater capital resources, larger customer bases, broader product lines, larger sales forces, and larger research and development or regulatory staffs and resources;
have stronger reputations and relationships with our target customers;
have developed more extensive distribution channels;
are or may be able to manufacture and distribute products more efficiently at lower costs and offer comparable products at lower prices;
have greater experience in developing and improving products, obtaining regulatory approvals, and manufacturing and marketing products;
may develop technologies and products that are safer, more effective, easier to use, or less expensive than ours; and may obtain patent protection or regulatory approval or clearance, or achieve product commercialization, before us.
We have limited internal research and development resources and capabilities. We have historically introduced few internally-developed new devices to market. A significant portion of our growth has been driven by acquisitions. Although we have completed 2425 acquisitions since our founding, we have not completed ana material acquisition since 2020. Acquisition targets in the open vascular surgery space may be limited, and even to the extent that we are able to identify acquisition opportunities, there may be reasons that we are unable to consummate acquisitions, including, without limitation, an inability to agree upon acceptable acquisition terms, the presence of competitive bids, and regulatory or antitrust challenges. We may choose to pursue acquisitions in adjacent call points, such as the cardiovascular call point, which may offer fewer synergies and may be more costly or time consuming to integrate. If we are unable to complete future potential acquisitions, our ability to grow may be inhibited.
difficulties in integrating acquired businesses, personnel, and products into our existing business;
difficulties or delays in integrating manufacturing operations into our existing business or successfully replicating manufacturing processes at new manufacturing facilities on a cost-effective basis;
decline in our corporate gross margin due to lower margins associated with acquired devices;
reduction in volume from key customers, particularly where the acquired company had concentrated sales;
diversion of management’s time from other business concerns;
higher costs of integration than anticipated, especially in call points other than open vascular surgery;
unanticipated liabilities included as part of the acquisition;
disputes or litigation with former owners related to contingent payments, liabilities assumed, or other matters;
challenges in complying with regulatory requirements to which we were not previously subject;
increased regulatory scrutiny;
challenges in transferring, maintaining or obtaining regulatory approvals for acquired products;
Management's Discussion & Analysis (MD&A)
New heading “Our discussion and analysis of our financial condition and results of operations for 2025 as compared to 2024 are discussed below. For a discussion of our financial condition and results of operations for 2024 as compared to 2023, please refer to Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our 2024 Annual Report on Form 10-K, except as set forth below.”
New heading “Purchase Commitments”
New heading “Revenue Recognition”
New heading “Share-Based Compensation”
Removed heading “Comparison of the year ended December 31, 2023 to the year ended December 31, 2022”
Largest changes
“Restructuring. For the year ended December 31, 2023, restructuring expenses were $0.5 million. On June 30, 2022, we ceased operations at our St. Etienne, France factory. The closure resulted in a restructuring charge of $3.1 million for the year ended December 31, 2022. These charges consisted primarily of employment termination costs, impairment of fixed assets and inventory, and third-party costs. For the year ended December 31, 2023, we recorded additional restructuring expenses related to this closure of $0.5 million. …”see in full comparison
“Restructuring. For the year ended December 31, 2024, there were no restructuring expenses. On June 30, 2022, we ceased operations at our St. Etienne, France factory. The closure resulted in a restructuring charge of $3.1 million for the year ended December 31, 2022. These charges consisted primarily of employment termination costs, impairment of fixed assets and inventory, and third-party costs. For the year ended December 31, 2023, we recorded additional restructuring expenses related to this closure of $0.5 million. …”see in full comparison
“Our discussion and analysis of our financial condition and results of operations for 2025 as compared to 2024 are discussed below. For a discussion of our financial condition and results of operations for 2024 as compared to 2023, please refer to Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our 2024 Annual Report on Form 10-K, except as set forth below.”see in full comparison
“Separately, our regulatory efforts to maintain approvals in the EU and the United Kingdom (UK) have succeeded ahead of the full EU transition from the Medical Device Directive (MDD) to the Medical Device Regulation (MDR) and the UK transition to the United Kingdom Conformity Assessed (UKCA) mark. As of January 2026, we have 22 MDR CE marks and 18 UKCA approvals. Those 22 CE and 18 UKCA marks represent substantially all of our product approvals in the EU and UK. The European Commission has designated the end of 2028 as the final MDR CE mark transition deadline.”see in full comparison
“Comparison of the year ended December 31, 2023 to the year ended December 31, 2022”see in full comparison
Full comparison: every changed paragraph (124)
Our discussion and analysis of our financial condition and results of operations for 2025 as compared to 2024 are discussed below. For a discussion of our financial condition and results of operations for 2024 as compared to 2023, please refer to Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our 2024 Annual Report on Form 10-K, except as set forth below.
We are a global provider of medical devices and human tissue cryopreservation services largely used in the treatment of peripheral vascular disease, end-stage renal disease, and cardiovascular disease. We develop, manufacture, and market vascular devices to address the needs of vascular surgeons and, to a lesser degree, other specialties such as cardiac surgeons, general surgeonssurgeons, and neurosurgeons. Our diversified portfolio of devices consists of brand name products that are used in arteries and veins and are well known to vascular surgeons. Our principal product offerings are sold globally, primarily in the United States, Europe, CanadaCanada, and Asia Pacific.Pacific, or APAC. We estimate that the annual worldwide market for peripheral vascular devices exceeds $5$9 billion, within which we estimate that the market for our products is approximately $1 billion. We have grown our business using a three-pronged strategy: 1) pursuing a focused call point, 2) competing for sales of low-rivalry, niche products, and 3) expanding our worldwide direct sales force while acquiring complementary devices. We have used acquisitions as a primary means of further penetrating the peripheral vascular device market, and we expect to continue this strategy in the future. We currently manufacture most of our products in our Burlington, Massachusetts headquarters.
To assist us in evaluating our business strategies, we monitor long-term technology trends in the peripheral vascular device market. Additionally, we consider the information obtained from discussions with the medical community in connection with the demand for our products, including potential new product launches. We also use this information to help determine our competitive position in the peripheral vascular device market and our manufacturing capacity requirements.
growing our direct sales force in North America, Europe, and APAC, including replacing distributors with our direct sales personnel;
increasing the average selling prices of our devices;
introducing our products into new territories upon receipt of regulatory approvals or registrations;
acquiring complementary products and the transition of distributor sales to LeMaitre;
updating existing products and introducing new products through research and development, and consolidating product manufacturing into our Burlington, Massachusetts facilities.
We sell our products and services primarily through a direct sales force. As of December 31, 2024, our sales force comprised 152 sales representatives in North America, Europe, the UK, and Asia Pacific, including four export managers. Our worldwide headquarters is located in Burlington, Massachusetts, and we also have a North American sales office in Vaughan, Canada. Our European headquarters is located in Sulzbach, Germany, and we also have European sales offices in Milan, Italy; Madrid, Spain; Hereford, England; Dublin, Ireland; Maisons-Alfort, France; and Maisons-Alfort,Glattbrugg, France.Switzerland. Our Asia PacificAPAC headquarters is located in Singapore, and we also have Asia PacificAPAC sales offices in Tokyo, Japan; Shanghai, China; Kensington,Docklands, Australia; Seoul, Korea; and Bangkok, Thailand. During the year ended December 31, 2024,2025, approximately 95% of our net sales were generated in territories in which we employ direct sales representatives. We sell our products in other countries through distributors. As of December 31, 2025, our sales force comprised 160 sales representatives and export managers in North America, Europe, and APAC.
We obtain regulatory approvals for our devices and services in new product categories and geographies in order to further access the broader peripheral device market and selected other markets.markets, Whilethus much of our regulatory effort is focused on maintaining regulatory approvals in various geographies, we will continue to obtain new product approvals in new geographies in order to extendextending our geographic reach. Recent approvals include the approvalapprovals to sell the XenoSure patch for carotid indication in Japan in May 2023, and the Pruitt Irrigation Occlusion Catheter in China in October 2023,2023; theapprovals XenoSureto patch for cardiac indication in China in December 2024, andsell the Artegraft bovine graft in Thailand and Malaysia in August 2024 and in South Africa in October 2024.2024, and the XenoSure patch for cardiac indications in China in December 2024; and approvals to sell the Artegraft bovine graft in the European Union (EU) in April 2025, Australia in June 2025, and Canada in December 2025, the Pruitt Aortic Occlusion Catheter in the EU in May 2025, and the Pruitt Occlusion Catheter in China in June 2025.
Separately, our regulatory efforts to maintain approvals in the EU and the United Kingdom (UK) have succeeded ahead of the full EU transition from the Medical Device Directive (MDD) to the Medical Device Regulation (MDR) and the UK transition to the United Kingdom Conformity Assessed (UKCA) mark. As of January 2026, we have 22 MDR CE marks and 18 UKCA approvals. Those 22 CE and 18 UKCA marks represent substantially all of our product approvals in the EU and UK. The European Commission has designated the end of 2028 as the final MDR CE mark transition deadline.
Additionally, we provide cryopreservation services for our RestoreFlow allografts primarily in the US, the UK, and Canada. In October 2025, we received approval from the German authority on tissue banking to allow sale of these services in the German market.
Separately, in July 2024, we received MDR CE marks allowing for the continued sale of ten devices into the EU. Previously we had obtained four MDR CE marks. In January 2025, we received MDR CE marks to market Burlington-manufactured CardioCel and VascuCel devices in the EU. In total, we expect to receive 23 MDR CE marks by the end of 2025. The European Commission has designated the end of 2028 as the final MDR CE mark deadline.
Our strategy for growing our business includes the acquisitionacquisitions of complementary product lines and companies, which can be difficult to identify, negotiate, and purchase. There can be no assurance that we will be able to do so in the future.
In December 2025, we entered into an agreement with Andramed GmbH to purchase the assets of their AndraValvulotome business for $1.8 million plus additional payments of up to $0.8 million, contingent upon the passage of time and, separately, receipt of CE mark approval.
During 2024, we made the decision to wind down the PeriVu Angioscope product line. This product totaled approximately $0.9 million in 2024 revenues.
During 2025, we made the decision to terminate our cardiovascular porcine patch distribution agreement with Elutia. Previously, in April 2023, we had entered into an agreement with Elutia to become the exclusive U.S. distributor of their cardiovascular porcine patches. Under the agreement, we could distribute the products for three years with an option to acquire Elutia’s worldwide cardiovascular porcine patch business during the second and third years of the agreement. This product totaled approximately $1.8 million in 2025 revenues.
During 2025, we made the decision to wind down the CardioCel 3D and DuraSure product lines. These product lines totaled approximately $0.5 million in 2025 revenues. Additionally, in 2025 we made the decision to wind down the AnastoClip AC Closure System in North America. This product totaled approximately $0.7 million in 2025 revenues.
From time to time we undertake SKU reductions and attempt to transition sales to other SKUs or products with similar features. For example, in 2022, we initiated the transition of sales of our Syntel spring tip catheter to our Syntel regular tip catheter. Any of these actions may result in inventory write-offs and temporary or permanent negative impacts to our sales, gross margin, and customer relationships.
Because we believe that direct-to-hospital sales engendercreate closer customer relationships, and allow for higher selling prices and gross margins,margins through elimination of an intermediary, we periodically enter into transactions with country-specific distributors to transition their sales of our medical devices into our direct sales organization:
In March 2023, we entered into a distribution transition agreement with our Thai distributor to sell products directly in Thailand and dissolve the existing distribution arrangement. We have been selling direct-to-hospital in Thailand since August 2023. The distribution termination fees totaled approximately $0.7 million.
In March 2025, we entered into a distribution transition agreement with our Portuguese distributor to sell products directly in Portugal and dissolve the existing distribution arrangement. We have been selling direct-to-hospitals in Portugal since May 2025. The distribution termination fees are expected to total approximately $0.2 million.
In June 2025, we entered into a distribution transition agreement with our Czech distributor to sell products directly in Czechia and dissolve the existing distribution arrangement. We have been selling direct-to-hospitals in Czechia since July 2025. The distribution termination fees are expected to total approximately $0.1 million.
In March 2022, we received FDA clearance to market PhasTIPP, a portable powered phlebectomy device used to remove varicose veins in the leg. The device was launched in the United States in April 2024.
In addition to our sales growth strategies, we have also executed several operational initiatives designed to consolidate manufacturing into our Burlington facilities. We expect these plant consolidations and manufacturing transfers will result in improved control over production quality as well as reduced costs. Our most recent manufacturing transferstransfer includedwas:
In October 2019, we acquired the CardioCel and VascuCel biologic patch businesses from Anteris. The transfer to Burlington was substantially completed in 2023. In June 2023, the MDR CE mark application for these Burlington-produced devices was submitted, and we obtained approval in January 2025, allowing for distribution of these patches in the EU. We began distributing these Burlington-produced patches in the United States, Canada and select APAC markets in 2024.
Finally, from time to time we enter into distribution agreements of complementary product lines with the option to acquire the product line in the future:
In February 2024, we began implementing a new ERPenterprise resource planning, or ERP, system to replace our financial reporting and planning system. We expect thatIn the newUnited ERP system will be beneficial in a number of areas, including inventory management, pricing programs, financial operations and real-time reporting. We have been preparing for this transition since 2022 and have hired an experienced consulting team to assist in this transition, and, in the U.S.,States, we transitioned from our legacy ERP system to our newly implemented Microsoft Dynamics D365 system in February 2024. WeIn expectFebruary to2025, implementwe implemented this new system in selectedthe countriesUK. We intend to continue rolling out the new system in Europeour other international locations on a staged basis. The new ERP system has been beneficial in 2025,a startingnumber withof theareas, UK.including inventory management, pricing programs, financial operations and real-time reporting. As of December 31, 2024,2025, we have net capitalized costs on our balance sheet of $4.7$4.6 million associated with this ERP system.
Fluctuations in the exchange rates between the U.S. dollar and foreign currencies, primarily the Euro, affect our financial results. For the year ended December 31, 2024,2025, approximately 41%43% of our sales took place outside of the United States, largely in currencies other than the U.S. dollar. We expect foreign currencies will represent a significant percentage of future sales. Selling, marketing, and administrative costs related to these sales are also denominated in foreign currencies, thereby partially mitigating our bottom-line exposure to exchange rate fluctuations. However, ifIf there is aan decreaseincrease in the rate at which a foreign currency is exchanged for U.S. dollars, it will require moreless of the foreign currency to equal a specified amount of U.S. dollars than before the rate increase. In such cases we will record lessmore revenue in U.S. dollars than we didwould beforehave if the exchange rate had not changed. For 2024,the year ended December 31, 2025, we estimate that the effects of changes in foreign exchange rates decreasedincreased our reported sales by approximately $0.4$2.7 million, as compared to rates in effect for 2023.the year ended December 31, 2024.
Net sales. We derive our net sales from the sale of our products and services, less discounts and returns. Net sales include the shipping and handling fees paid for by our customers. Most of our sales are generated by our direct sales force and are shipped and billed to hospitals or clinics throughout the world.globally. In countries where we do not have a direct sales force, sales are primarily to distributors, who in turn sell to hospitals and clinics. In certainlimited cases our products are held on consignment at a hospital or clinic prior to purchase; in those instances we recognize revenue at the time the product is used in surgery rather than at shipment.
Cost of sales. We manufacture the majority of the products that we sell. Our costCost of sales consists primarily of manufacturing personnel,personnel wages, raw materials and components, depreciation of property and equipment, and other allocated manufacturing overhead, asincluding wellan asallocation of our quality department expenses. Additionally, cost of sales includes the freight expenseexpenses we pay to ship products to customers.customers, inventory scrap charges, and excess and obsolescence expenses.
Sales and marketing. Our salesSales and marketing expense consists primarily of salaries, commissions, contests, stock-based compensation, travel and entertainment, sales meetings, attendance at vascular and cardiac congresses, training programs, advertising and product promotions, direct mail, and other marketing costs. Additionally, sales and marketing expense includes customer service department personnel charges.
Research and development. Research and development expense primarily includes costs associated with obtaining and maintaining regulatory approval of our products, salaries, laboratory testing, and supply costs. It also includes costs associated with the design and execution of clinical studies, costs to register, maintain, and defend our intellectual property,studies and costs to transfer the manufacturing of acquired product lines to our Burlington facility. AlsoAdditionally, includedresearch areand development expense includes costs associated with the design, development, testing, and enhancement of new or existing products.
Other income (expense). Other income (expense) primarily includes interest incomeand dividend income, realized gains (losses) from the sale of debt and expense,equity investments, unrealized gains (losses) from equity investments, interest expense for the convertible senior notes, foreign currency gains (losses), and other miscellaneous gains (losses).
Income tax expense. We are subject to federal and state income taxes for earnings generated in the United States, which include operating losses or profits in certain foreign jurisdictions for certain years depending on tax elections made, and foreign taxes on earnings of our wholly-owned foreign subsidiaries. Our consolidated income tax expense is affected by the mix of our taxable income (loss) in the United States and foreign subsidiaries, permanent items, discrete items, unrecognized tax benefits, and amortization of goodwill for U.S. tax reporting purposes.
Net sales. Net sales increased by $26.4$29.7 million, or 14%, to $249.6 million for the year ended December 31, 2025, compared to $219.9 million for the year ended December 31, 2024, compared to $193.5 million for the year ended December 31, 2023.2024. The increase was driven primarily by higher average selling prices, higher hospitalunit procedurevolumes volumes,shipped to customers, the European launch of Artegraft, and additional sales representatives. Graft sales increased $11.1$16.0 million, patchvalvulotome sales increased $6.4$4.7 million, shunt sales increased $3.7$3.5 million andmillion, catheter sales increased $3.0$2.8 million, and patch sales increased $1.8 million. We estimate that the strongerweaker U.S. dollar decreasedincreased net sales by $0.4$2.7 million during the year ended December 31, 20242025, as compared to the year ended December 31, 2023.2024.
Direct-to-hospital net sales were 95% and 96% of our total net sales for both the years ended December 31, 20242025 and 2023,2024, respectively.
Net sales by geography. Net sales in the Americas increased $14.3$15.1 million, or 11%,10%, for the year ended December 31, 20242025, as compared to the year ended December 31, 2023.2024. The increase was driven primarily by increased sales of grafts of $8.5$10.4 million, patches of $3.4 million and valvulotomes of $1.2$3.1 million, and catheters of $0.9 million.
EMEA net sales increased $8.9$13.2 million, or 17%,22%, for the year ended December 31, 20242025, as compared to the year ended December 31, 2023.2024. The increase was driven primarily by increased sales of grafts of $5.1 million, which includes the launch of Artegraft, shunts of $2.9$2.8 million, catheters of $2.1 million, patches of $2.4$1.8 million, graftsand valvulotomes of $1.6 million and catheters of $1.1$1.3 million.
Asia Pacific net sales increased $3.2$1.5 million, or 27%,10%, for the year ended December 31, 20242025, as compared to the year ended December 31, 2023.2024. The increase was driven primarily by increased sales of catheters of $1.2 million, grafts of $1.1 million and patches of $0.6$0.5 million each, valvulotomes of $0.3 million, and clips of $0.2 million.
* Not applicable
Gross profit increased $23.9$27.6 million, or 19%,18%, to $178.5 million for the year ended December 31, 2025, as compared to $150.9 million for the year ended December 31, 2024, and gross margin increased by 290 basis points to 68.6%71.5% in the period.period, as compared to 68.6% for the year ended December 31, 2024. The increase in gross profit was driven primarily by increased sales, particularly from allograftgrafts, preservation services, bovine vascular patches, carotid shuntsvalvulotomes, and bovineshunts, grafts.and the receipt of the U.S. Employee Retention Credit ("ERC"). The increase in gross margin was driven primarily by the ERC, greater manufacturing efficienciesefficiencies, and sales price increases, which was partially offset by increased shipping and warehousing costs and unfavorable product mix, including increased sales of comparatively lower margin allograft preservation services, andovine increased excessgrafts, and obsolescencesingle charges.lumen embolectomy catheters. The ERC received in 2025 had a favorable impact of $2.7 million, or 109 basis points, to the gross margin.
Sales and marketing. For the year ended December 31, 2024,2025, sales and marketing expenses increased 14%17% to $46.7$54.5 million. The increase was driven primarily by higher sales representative headcount,headcount and wage increases, which resulted in increased compensation and related expenses of $4.2$6.6 million.million, which was partially offset by the ERC. Additionally, travel,professional training,fees and salesoutside meetingservices expenses increased $1.7$1.1 million inand 2024.travel and training expenses increased $0.6 million. Sales repforce headcount was 152160 as of December 31, 2024,2025, a 12%5% increase from December 31, 2023.2024. The ERC received in 2025 had a favorable impact, reducing sales and marketing expenses by $0.8 million. As a percentage of net sales, sales and marketing expenses remainedincreased consistentto at22% for the year ended December 31, 2025, up from 21% for the year ended December 31, 2024 versus the prior period.2024.
General and administrative. For the year ended December 31, 2024,2025, general and administrative expenses increased 14%16% to $36.3$42.0 million. The increase was driven primarily by higher headcount and relatedwage recruiting fees, accrued bonus, and stock compensation expenses,increases, which resulted in increased compensation and related expenses of $2.1$4.1 million.million, which was partially offset by the ERC. Additionally, professional fees and outside services expenses increased $1.2 million and facilities expenses increased $0.8$1.0 million and travel and training expenses increased $0.2 million. The ERC received in 2025 had a favorable impact, reducing general and administrative expenses by $0.3 million, offset by third party consultant fees of $0.7 million. As a percentage of net sales, general and administrative expenses remainedincreased consistentto at17% for the year ended December 31, 2025, up from 16% for the year ended December 31, 2024 versus the prior period.2025.
Research and development. For the year ended December 31, 2024, research and development expenses decreased 8% to $15.7 million. The decrease was driven by comparatively higher costs in 2023 related to outside services, professional fees, and testing related to MDD and MDR approvals, of $1.3 million. Additionally, process engineering expenses decreased $0.7 million as CardioCel device manufacturing was initiated at our Burlington facility in 2024, and related expenses were allocated to cost of sales. The decrease was partially offset by higher compensation and related expenses of $0.7 million. As a percentage of sales, total research and development expenses decreased to 7% for the year ended December 31, 2024, down from 9% in the prior period.
Restructuring. For the year ended December 31, 2024, there were no restructuring expenses. On June 30, 2022, we ceased operations at our St. Etienne, France factory. The closure resulted in a restructuring charge of $3.1 million for the year ended December 31, 2022. These charges consisted primarily of employment termination costs, impairment of fixed assets and inventory, and third-party costs. For the year ended December 31, 2023, we recorded additional restructuring expenses related to this closure of $0.5 million. The additional expenses consisted primarily of employment termination, settlement, legal, and other third-party costs. As a percentage of sales, restructuring expenses was less than 1% for the year ended December 31, 2023.
Income tax expense. We recorded a tax provision of $12.8 million on pre-tax income of $56.9 million for the twelve months ended December 31, 2024, compared to $9.4 million on pre-tax income of $39.5 million for the twelve months ended December 31, 2023.
Our effective income tax rate was 20.2% and 22.6% for the three- and twelve-month periods ended December 31, 2024 respectively. Our tax expense for 2024 is based on an estimated annual effective tax rate of 24.5%, adjusted in the applicable quarterly periods for stock option exercises and other discrete items. Our income tax expense for 2024 varies from the statutory rate mainly due to federal and state tax credits, permanent items, different statutory rates from our foreign entities, and stock option exercises.
Our effective income tax rate was 25.3% and 23.7% for the three- and twelve-month periods ended December 31, 2023, respectively. Our 2023 provision was based on an estimated annual effective tax rate of 26.1%, adjusted in the applicable quarterly period for discrete stock option exercises and other discrete items. Our income tax expense for 2023 varied from the statutory rate mainly due to permanent items, different statutory rates from our foreign entities, and stock option exercises.
We monitor the mix of profitability by tax jurisdiction and adjust our annual expected rate on a quarterly basis as needed. While it is often difficult to predict the final outcome or timing of the resolution for any particular tax matter, we believe our tax reserves reflect the probable outcome of known contingencies.
We assess the likelihood that our deferred tax assets will be realized through future taxable income and record a valuation allowance to reduce gross deferred tax assets to an amount we believe is more likely than not to be realized. As of December 31, 2024, we have provided a valuation allowance of $1.7 million for deferred tax assets primarily related to Australian net operating loss and capital loss carry forwards and Massachusetts tax credit carry forwards that are not expected to be realized.
Beginning in 2022, the Tax Cuts and Jobs Act of 2017 eliminated the option to deduct research and development expenditures immediately in the year incurred and requires taxpayers to amortize such expenditures over five years for tax purposes. This provision resulted in a cash tax liability for the 2024 tax year of approximately $0.8 million. Our net deferred tax assets increased in 2024 by approximately $0.9 million as a result as well. This provision is also expected to increase our 2025 cash tax liability. The actual impact on 2025 cash tax liability will depend on the amount of research and development expenses paid or incurred in 2025 among other factors. The impact will continue over the five-year amortization period, but will decrease ratably over the period.
The Inflation Reduction Act, or IRA, was enacted into law on August 16, 2022. Included in the IRA was a provision to implement a 15% corporate alternative minimum tax on “adjusted financial statement income” for applicable corporations and a 1% excise tax on repurchases of stock. These provisions are effective for tax years beginning after December 31, 2022. We do not currently believe the IRA will have a material impact on our reported results, cash flows, or financial position.
Comparison of the year ended December 31, 2023 to the year ended December 31, 2022
The following table sets forth, for the periods indicated, our net sales by geography, and the change between the specified periods expressed as a percentage increase or decrease:
Net sales. Net sales increased by $31.8 million, or 20%, to $193.5 million for the year ended December 31, 2023, compared to $161.7 million for the year ended December 31, 2022. The increase was driven primarily by higher average selling prices, elevated hospital procedure volumes, additional sales representatives, and sales related to our new porcine patch product line. Graft sales increased $10.5 million, patch sales increased $10.4 million, valvulotome sales increased $6.3 million, and shunt sales increased $3.1 million. We estimate that the weaker U.S. dollar increased net sales by $0.2 million during the year ended December 31, 2023 as compared to the year ended December 31, 2022.
Direct-to-hospital net sales were 96% and 95% of our total net sales for the years ended December 31, 2023 and 2022, respectively.
Net sales by geography. Net sales in the Americas increased $20.9 million, or 19%, for the year ended December 31, 2023 as compared to the year ended December 31, 2022. The increase was driven primarily by increased sales of grafts of $7.5 million, patches of $6.5 million, valvulotomes of $5.2 million, and shunts of $1.0 million.
EMEA net sales increased $9.2 million, or 22%, for the year ended December 31, 2023 as compared to the year ended December 31, 2022. The increase was driven primarily by increased sales of patches of $3.3 million, grafts of $3.0 million, shunts of $1.9 million, and valvulotomes of $1.1 million.
Asia Pacific net sales increased $1.7 million, or 17%, for the year ended December 31, 2023 as compared to the year ended December 31, 2022. The increase was driven primarily by increased sales of catheters of $0.7 million, patches of $0.6 million, grafts of $0.3 million, and shunts of $0.2 million.
What changed in the latest 10-Q
Risk Factors
New heading “Even after our products have received marketing approval or clearance, our products and the tissue we process may be subject to recall. Licenses, registrations, approvals, and clearances could be withdrawn or suspended due to failure to comply with regulatory standards or the occurrence of unforeseen problems following initial approval.”
Largest changes
“Even after our products have received marketing approval or clearance, our products and the tissue we process may be subject to recall. Licenses, registrations, approvals, and clearances could be withdrawn or suspended due to failure to comply with regulatory standards or the occurrence of unforeseen problems following initial approval.”see in full comparison
“In the event that any of our products prove to be defective, we can voluntarily recall, or the FDA or foreign equivalent could require us to recall, any of our products. In the EU and UK, adverse event reporting requirements mandate that we report incidents which led or could have led to death or serious deterioration in health. Recalls, whether voluntary or required, could result in significant costs to us and significant adverse publicity. …”see in full comparison
“Our products, services, marketing, sales, development activities, and manufacturing processes are subject to extensive and rigorous regulation by the FDA, by comparable agencies in foreign countries, and by other regulatory agencies and governing bodies. …”see in full comparison
“In addition to the information set forth in this report, you should consider the risks and uncertainties discussed in “Part I, Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025, which could materially affect our business, financial condition, or future results. The risk factors below supplement and update the risk factors and information discussed in our Annual Report on Form 10-K for the year ended December 31, 2025.”see in full comparison
“There have been no material changes to the risk factors we previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025. However, we cannot provide any assurance that any risk factor will not materialize.”see in full comparison
Full comparison: every changed paragraph (5)
In addition to the information set forth in this report, you should consider the risks and uncertainties discussed in “Part I, Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025, which could materially affect our business, financial condition, or future results. The risk factors below supplement and update the risk factors and information discussed in our Annual Report on Form 10-K for the year ended December 31, 2025.
Even after our products have received marketing approval or clearance, our products and the tissue we process may be subject to recall. Licenses, registrations, approvals, and clearances could be withdrawn or suspended due to failure to comply with regulatory standards or the occurrence of unforeseen problems following initial approval.
Our products, services, marketing, sales, development activities, and manufacturing processes are subject to extensive and rigorous regulation by the FDA, by comparable agencies in foreign countries, and by other regulatory agencies and governing bodies. If those regulatory bodies believe that we have failed to comply with regulatory standards, there can be no assurance that any approval, licensure, or registration will not be subsequently withdrawn, suspended or conditioned upon extensive post-market study requirements, even after having received marketing approval or clearance or licenses and registrations. Further, due to the interconnectedness of the various regulatory agencies, particularly within the EU, there is also no assurance that withdrawal or suspension of any of our approvals, licenses, or registrations by any single regulatory agency will not cause one or more additional regulatory agencies to also withdraw or suspend their approval, license, or registration.
In the event that any of our products prove to be defective, we can voluntarily recall, or the FDA or foreign equivalent could require us to recall, any of our products. In the EU and UK, adverse event reporting requirements mandate that we report incidents which led or could have led to death or serious deterioration in health. Recalls, whether voluntary or required, could result in significant costs to us and significant adverse publicity. In severe instances, the FDA may also issue a warning letter, require the destruction of defective product, and/or order the suspension or cessation of manufacturing of defective product. Additionally, if someone is harmed by a malfunction or a product defect, we may experience product liability claims for such defects. Any corrective action, whether voluntary or involuntary, as well as defending ourselves in a lawsuit, will require the dedication of our time and capital and may harm our financial results. Future recalls or claims could also result in significant costs to us and significant adverse publicity, which could harm our ability to market our products in the future. For example, in April 2025, we voluntarily notified our regulatory bodies of an inadequate seal on the packaging of our TufTex Over-the-Wire, Pruitt Occlusion, and Pruitt Irrigation catheters, which may result in a compromised sterile barrier. Notice was provided to each of our customers of the inadequate seal, and customers were offered a product replacement for any existing inventory on hand. The financial impact of the voluntary notification is not expected to be material to our business. Additionally, in August 2025, the FDA issued a warning letter to us following an April 2025 inspection of our Artegraft facility in North Brunswick. In August 2025, we responded to the cited observations and since then have continued to implement corrective actions. In June 2026, the FDA concluded a re-inspection of our Artegraft facility and identified additional new inspectional observations, without commenting on the April 2025 cited observations. We have submitted responses to the FDA regarding these observations, continue to engage with the agency concerning the status of our remediation efforts and the warning letter, and expect to incur ongoing costs and devote management resources to addressing these matters. We believe that the FDA will likely inspect our Artegraft facility again to review our corrective action activities. To date, the financial impact of the warning letter and related regulatory activities has not been material to our business, and there has been no disruption to Artegraft sales. However, there can be no assurance that the FDA will find our corrective actions satisfactory, that additional inspections will not result in further observations or in enforcement actions, or that these matters will not adversely affect our operations, regulatory compliance, reputation or financial results.
There have been no material changes to the risk factors we previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025. However, we cannot provide any assurance that any risk factor will not materialize.
Management's Discussion & Analysis (MD&A)
Largest changes
Net sales. Net sales increased bysee in full comparison$6.7$6.2 million, or11%,10%, to$66.6$70.4 million for the three months endedMarchJune31,30, 2026, compared to$59.9$64.2 million for the three months endedMarchJune31,30, 2025. The increase was driven primarily by higher average selling prices, higher unit volumes shipped to customers, and the European launch of Artegraft in the second half of 2025. Graft sales increased$4.1$5.1 million,valvulotome sales increased $1.6 million, andshunt sales increased$0.7$1.1 million, and patches sales increased $0.6 million. Catheter sales decreased $0.9 million due to the increased sales volumes related to the April 2025 recall of our TufTex Over-the-Wire, Pruitt Occlusion, and Pruitt Irrigation catheters. We estimate that the weaker U.S. dollar increased net sales by$2.0$0.4 million during the three months endedMarchJune31,30, 2026, as compared to the three months endedMarchJune31,30, 2025.
“Net sales in Europe, Middle East, and Africa, or EMEA, increased $3.3 million, or 18%, for the three months ended June 30, 2026, as compared to the three months ended June 30, 2025. The increase was driven primarily by increased sales of grafts of $2.5 million, shunts of $0.7 million, patches of $0.3 million, and valvulotomes of $0.1 million, offset by decreased sales of catheters of $0.4 million.”see in full comparison
Comparison of thesee in full comparisonthreethree-monthandperiodsix-month periods endedMarchJune31,30, 2026, to thethreethree-monthandperiodsix-month periods endedMarchJune31,30, 2025:
“Europe, Middle East, and Africa, or EMEA, net sales increased $3.3 million, or 20%, for the three months ended March 31, 2026, as compared to the three months ended March 31, 2025. The increase was driven primarily by increased sales of grafts and valvulotomes of $1.0 million each, shunts of $0.5 million, and patches of $0.4 million.”see in full comparison
Net sales increased bysee in full comparisongeography. Net sales in the Americas increased $2.6$12.8 million, or7%,10%, to $136.9 million for thethreesix months endedMarchJune31,30, 2026,ascompared to $124.1 million for thethreesix months endedMarchJune31,30, 2025. The increase was drivenprimarilybybyhigher average selling prices, higher unit volumes shipped to customers, and the European launch of Artegraft in the second half of 2025. Graft sales increasedsales of grafts of $3.0$9.2 million,valvulotomesshuntofand$0.5valvulotome sales each increased $1.8 million, andcathetersclipofsales$0.1increased $1.0 million, offset by decreased sales of catheters of $0.4 million, decreased sales of tape of $0.3 million, and decreased sales of patches of$1.4$0.2 million due to the termination of ourcardiovascular porcine patchdistribution agreement with Elutia in 2025. We estimate that the weaker U.S. dollar increased net sales by $2.4 million during the six months ended June 30, 2026, as compared to the six months ended June 30, 2025.
“Research and development. For the three months ended June 30, 2026, research and development expenses increased 37% to $4.8 million. The increase was driven primarily by higher third-party service fees and general supplies associated with the current transfer of our allograft tissue processing from our Fox River Grove facility to Burlington, which resulted in increased expenses of $0.9 million. Facility expenses increased $0.4 million due to start-up costs associated with the new Billerica shipping warehouse since the inception of the lease beginning on January 1, 2026. …”see in full comparison
Full comparison: every changed paragraph (45)
acquiring complementary products and the transition oftransitioning distributor sales to LeMaitre;
We sell our products and services primarily through a direct sales force. Our worldwide headquarters is located in Burlington, Massachusetts, and we also have a North American sales office in Vaughan, Canada. We are moving our North American sales office to Mississauga, Canada in Q3 2026. Our European headquarters is located in Sulzbach, Germany, and we also have European sales offices in Milan, Italy; Madrid, Spain; Hereford, England; Dublin, Ireland; Maisons-Alfort, France; and Glattbrugg, Switzerland. Our APAC headquarters is located in Singapore, and we also have APAC sales offices in Tokyo, Japan; Shanghai, China; Docklands, Australia; Seoul, Korea; and Bangkok, Thailand. During the quarter ended MarchJune 31,30, 2026, approximately 96%95% of our net sales were generated in territories in which we employ direct sales representatives. We sell our products in other countries through distributors. As of MarchJune 31,30, 2026, our sales force comprised 158163 sales representatives and export managers in North America, Europe, and APAC.
Separately, our regulatory efforts to maintain approvals in the EU and the United Kingdom (UK) have succeeded ahead of the full EU transition from the Medical Device Directive (MDD) to the Medical Device Regulation (MDR) and the UK transition to the United Kingdom Conformity Assessed (UKCA) mark. As of AprilJune 10,30, 2026, we have 22 MDR CE marks and 22 UKCA which represent substantially all of our product approvals in the EU and UK. The European Commission has designated the end of 2028 as the final MDR CE mark transition deadline.
Additionally,Historically, we providehave provided cryopreservation services for our RestoreflowRestoreFlow allografts primarily in the US, UK, and Canada. In October 2025, we received approval from the German authority on tissue banking to allow provision of these services in the German market. We began providing cryopreservation services for our RestoreFlow allografts in Germany in May 2026.
During 2026, we made the decision to wind down the Flexcel single-size pack offerings to simplify our Flexcel portfolio while continuing to offer the Flexcel multi-size packs to customers. These Flexcel single-size product packs totaled approximately $0.9 million in revenue for the six months ended June 30, 2026.
In March2026, 2026,in conjunction with the purchase of the AndraValvulotome assets from Andramed GmbH, we entered into aseveral distribution transition agreementagreements with AngioProexisting GmbH, the distributordistributors of the AndraValvulotomeproduct line in European countries, including those in Germany, Switzerland,France, Austria,Italy, the UK, and other smaller markets. We have been selling direct-to-hospitals in these countries subsequent to the UK.execution of the transition agreements in 2026. The total distribution termination isfees effectivefor Aprilall 1,AndraValvulotome 2026related and termination feesdistributors are expected to total approximately $0.2$0.5 million.
In February 2024, we began implementing a new enterprise resource planning, or ERP, system to replace our financial reporting and planning system. In the United States, we transitioned from our legacy ERP system to our newly implemented Microsoft Dynamics D365 system in February 2024. In February 2025, weWe implemented this new system in the UK.UK in February 2025, Ireland in April 2026, and Canada in July 2026. We intend to continue rolling out the new system in our other international locations on a staged basis. The new ERP system has been beneficial in a number of areas, including inventory management, pricing programs, financial operations and real-time reporting. As of MarchJune 31,30, 2026, we have net capitalized costs on our balance sheet of $4.6$4.7 million associated with this ERP system.
Fluctuations in the exchange rates between the U.S. dollar and foreign currencies, primarily the Euro, affect our financial results. For the threesix months ended MarchJune 31,30, 2026, approximately 44%45% of our sales took place outside of the United States, largely in currencies other than the U.S. dollar. We expect foreign currencies will represent a significant percentage of future sales. Selling, marketing, and administrative costs related to these sales are also denominated in foreign currencies, thereby partially mitigating our bottom-line exposure to exchange rate fluctuations. If there is an increase in the rate at which a foreign currency is exchanged for U.S. dollars, it will require less of the foreign currency to equal a specified amount of U.S. dollars than before the rate increase. In such cases we will record more revenue in U.S. dollars than we would have if the exchange rate had not changed. For the threesix months ended MarchJune 31,30, 2026, we estimate that the effects of changes in foreign exchange rates increased our reported sales by approximately $2.0$2.4 million, as compared to rates in effect for the threesix months ended MarchJune 31,30, 2025.
Comparison of the threethree- monthand periodsix-month periods ended MarchJune 31,30, 2026, to the threethree- monthand periodsix-month periods ended MarchJune 31,30, 2025:
Net sales. Net sales increased by $6.7$6.2 million, or 11%,10%, to $66.6$70.4 million for the three months ended MarchJune 31,30, 2026, compared to $59.9$64.2 million for the three months ended MarchJune 31,30, 2025. The increase was driven primarily by higher average selling prices, higher unit volumes shipped to customers, and the European launch of Artegraft in the second half of 2025. Graft sales increased $4.1$5.1 million, valvulotome sales increased $1.6 million, and shunt sales increased $0.7$1.1 million, and patches sales increased $0.6 million. Catheter sales decreased $0.9 million due to the increased sales volumes related to the April 2025 recall of our TufTex Over-the-Wire, Pruitt Occlusion, and Pruitt Irrigation catheters. We estimate that the weaker U.S. dollar increased net sales by $2.0$0.4 million during the three months ended MarchJune 31,30, 2026, as compared to the three months ended MarchJune 31,30, 2025.
Direct-to-hospital net sales were 96% and 94%95% of our total net sales for both the three months ended MarchJune 31,30, 2026 and 2025.
Net sales increased by geography. Net sales in the Americas increased $2.6$12.8 million, or 7%,10%, to $136.9 million for the threesix months ended MarchJune 31,30, 2026, as compared to $124.1 million for the threesix months ended MarchJune 31,30, 2025. The increase was driven primarilyby byhigher average selling prices, higher unit volumes shipped to customers, and the European launch of Artegraft in the second half of 2025. Graft sales increased sales of grafts of $3.0$9.2 million, valvulotomesshunt ofand $0.5valvulotome sales each increased $1.8 million, and cathetersclip ofsales $0.1increased $1.0 million, offset by decreased sales of catheters of $0.4 million, decreased sales of tape of $0.3 million, and decreased sales of patches of $1.4$0.2 million due to the termination of our cardiovascular porcine patch distribution agreement with Elutia in 2025. We estimate that the weaker U.S. dollar increased net sales by $2.4 million during the six months ended June 30, 2026, as compared to the six months ended June 30, 2025.
Direct-to-hospital net sales were 95% and 94% of our total net sales for the six months ended June 30, 2026 and 2025.
Europe, Middle East, and Africa, or EMEA, net sales increased $3.3 million, or 20%, for the three months ended March 31, 2026, as compared to the three months ended March 31, 2025. The increase was driven primarily by increased sales of grafts and valvulotomes of $1.0 million each, shunts of $0.5 million, and patches of $0.4 million.
APAC netNet sales by geography. Net sales in the Americas increased $0.7$2.1 million, or 18%,5%, for the three months ended MarchJune 31,30, 2026, as compared to the three months ended MarchJune 31,30, 2025. The increase was driven primarily by increased sales of clipsgrafts of $2.4 million, shunts and patches of $0.2$0.3 million eacheach, and shunts and graftsvalvulotomes of $0.1 millionmillion, each.offset by decreased sales of catheters of $0.7 million.
Net sales in the Americas increased $4.8 million, or 6%, for the six months ended June 30, 2026, as compared to the six months ended June 30, 2025. The increase was driven primarily by increased sales of grafts of $5.4 million, valvulotomes of $0.6 million, and shunts of $0.5 million, offset by decreased sales of patches of $1.1 million, due to the termination of our distribution agreement with Elutia in 2025, and catheters of $0.6 million.
Net sales in Europe, Middle East, and Africa, or EMEA, increased $3.3 million, or 18%, for the three months ended June 30, 2026, as compared to the three months ended June 30, 2025. The increase was driven primarily by increased sales of grafts of $2.5 million, shunts of $0.7 million, patches of $0.3 million, and valvulotomes of $0.1 million, offset by decreased sales of catheters of $0.4 million.
Net sales in EMEA increased $6.6 million, or 19%, for the six months ended June 30, 2026, as compared to the six months ended June 30, 2025. The increase was driven primarily by increased sales of grafts of $3.5 million, shunts of $1.2 million, valvulotomes of $1.1 million, and patches of $0.7 million.
Net sales in APAC increased $0.7 million, or 18%, for the three months ended June 30, 2026, as compared to the three months ended June 30, 2025. The increase was driven primarily by increased sales of clips, grafts, and catheters of $0.2 million each and shunts of $0.1 million.
Net sales in APAC increased $1.4 million, or 18%, for the six months ended June 30, 2026, as compared to the six months ended June 30, 2025. The increase was driven primarily by increased sales of clips of $0.5 million, grafts of $0.3 million, patches, catheters, and shunts of $0.2 million each, and valvulotomes of $0.1 million.
Gross profit increased $7.0$5.8 million, or 17%,13%, to $48.4$50.8 million for the three months ended MarchJune 31,30, 2026, as compared to $41.4$45.0 million for the three months ended MarchJune 31,30, 2025, and gross margin increased by 350210 basis points to 72.7%72.1% in the period, as compared to 69.2%70.0% for the three months ended MarchJune 31,30, 2025. The increase in gross profit was driven primarily by increased sales, particularly from grafts, valvulotomes,shunts, and shunts.patches. The increase in gross margin was driven primarily by sales price increases, greater manufacturing efficiencies, and favorable product mix, including decreased sales of comparativelyand lower marginshipping porcine patches due to the decision to end our distribution agreement with Elutia.costs. The increase was partially offset by higherunfavorable scrapmanufacturing efficiencies and higher excess and obsolescence charges during the period.
Gross profit increased $12.8 million, or 15%, to $99.2 million for the six months ended June 30, 2026, as compared to $86.4 million for the six months ended June 30, 2025, and gross margin increased by 280 basis points to 72.4% in the period, as compared to 69.6% for the six months ended June 30, 2025. The increase in gross profit was driven primarily by increased sales, particularly from grafts, shunts, and valvulotomes. The increase in gross margin was driven primarily by sales price increases, favorable product mix, including decreased sales of comparatively lower margin porcine patches due to the decision to end our distribution agreement with Elutia, and lower shipping costs. The increase was partially offset by higher scrap and excess and obsolescence charges during the period.
Sales and marketing. For the three months ended MarchJune 31,30, 2026, sales and marketing expenses increaseddecreased 2%3% to $14.5$14.4 million. The increasedecrease was driven primarily by higher sales representative headcount and wage increases, which resulted in increasedlower compensation and related expenses of $0.6$0.4 million, partiallyincluding offsetlower bycommissions decreasedand general suppliescontest expenses of $0.3$0.2 million. Sales force headcount was 158163 as of MarchJune 31,30, 2026, a 3%2% increase from MarchJune 31,30, 2025. As a percentage of net sales, sales and marketing expenses decreased to 22%20% for the three months ended MarchJune 31,30, 2025,2026, down from 24%23% for the three months ended MarchJune 31,30, 2025.
General and administrative. For the three months ended March 31, 2026, general and administrative expenses increased 15% to $12.0 million. The increase was driven primarily by higher headcount and wage increases, which resulted in increased compensation and related expenses of $0.8 million. General supplies increased $0.4 million and professional fees and outside services increased $0.3 million. As a percentage of net sales, general and administrative expenses remained consistent at 18% for the three months ended March 31, 2026 and 2025, respectively.
Research and development. For the threesix months ended MarchJune 31,30, 2026, researchsales and developmentmarketing expenses decreased 1% to $4.1$28.9 million. The decrease was driven primarily by lower third-party service fees, which resulted in decreased professional feescommissions and outside servicescontest expenses related to MDR related activities of $0.4$0.5 million, partially offset by general supplies increased $0.2sales millionmeetings and compensationtrade and relatedshow expenses increasedof $0.1$0.3 million. As a percentage of net sales, researchsales and developmentmarketing expenses decreased to 6%21% for the threesix months ended MarchJune 31,30, 2026, down from 7%23% for the threesix months ended MarchJune 31,30, 2025.
General and administrative. For the three months ended June 30, 2026, general and administrative expenses increased 7% to $11.1 million. The increase was driven primarily by higher headcount and wage increases, which resulted in increased compensation and related expenses of $0.5 million. Professional fees and outside services expenses increased $0.4 million, offset by decreased travel and training expenses of $0.1 million. As a percentage of net sales, general and administrative expenses remained consistent at 16% for the three months ended June 30, 2026 and 2025, respectively.
For the six months ended June 30, 2026, general and administrative expenses increased 11% to $23.2 million. The increase was driven primarily by higher headcount and wage increases, which resulted in increased compensation and related expenses of $1.3 million. Professional fees and outside services expenses increased $0.8 million and general supplies expenses increased $0.5 million, offset by lower facility expenses of $0.2 million. As a percentage of net sales, general and administrative expenses remained consistent at 17% for the six months ended June 30, 2026 and 2025, respectively.
Research and development. For the three months ended June 30, 2026, research and development expenses increased 37% to $4.8 million. The increase was driven primarily by higher third-party service fees and general supplies associated with the current transfer of our allograft tissue processing from our Fox River Grove facility to Burlington, which resulted in increased expenses of $0.9 million. Facility expenses increased $0.4 million due to start-up costs associated with the new Billerica shipping warehouse since the inception of the lease beginning on January 1, 2026. The transfer of shipping operations to the Billerica shipping warehouse started in June 2026. As a percentage of net sales, research and development expenses increased to 7% for the three months ended June 30, 2026, up from 6% for the three months ended June 30, 2025.
For the six months ended June 30, 2026, research and development expenses increased 17% to $8.9 million. The increase was driven primarily by higher facility expenses of $0.6 million, general supplies expenses of $0.5 million, and professional fees and outside services expenses of $0.1 million. As a percentage of net sales, research and development expenses increased to 7% for the six months ended June 30, 2026, up from 6% for the six months ended June 30, 2025.
Income tax expense. We recorded a tax provision of $4.0$5.1 million on pre-tax income of $19.7$22.2 million for the three months ended MarchJune 31,30, 2026, compared to a $3.2$4.3 million tax provision on pre-tax income of $14.2$18.1 million for the three months ended MarchJune 31,30, 2025. We recorded a tax provision of $9.1 million on pre-tax income of $41.9 million for the six months ended June 30, 2026, compared to a tax provision of $7.5 million on pre-tax income of $32.3 million for the six months ended June 30, 2025. Our effective income tax rate was 20.3%23.2% and 21.8% for the threethree- monthand periodsix-month periods ended MarchJune 31,30, 2026. Our tax expense for the current period is based on an estimated annual effective tax rate of 22.9%,22.8%, adjusted in the applicable quarterly periods for discrete stock option exercises and other discrete items. Our income tax expense for the current period varies from the statutory rate mainly due to the generation of federal and state tax credits, permanent items, different statutory rates from our foreign entities, and a discrete item for stock option exercises.
Our effective income tax rate was 22.7%23.7% and 23.3% for the threethree- monthand periodsix-month periods ended MarchJune 31,30, 2025. Our 2025 provision was based on the estimated annual effective tax rate of 23.8%, adjusted in the applicable quarterly period for discrete stock option exercises and other discrete items. Our income tax expense for the threethree- monthand periodsix-month periods ended MarchJune 31,30, 2025 varied from the statutory rate mainly due to the generation of federal and state tax credits, permanent items, different statutory rates from our foreign entities, and a discrete item for stock option exercises.
We assess the likelihood that our deferred tax assets will be realized through future taxable income and record a valuation allowance to reduce gross deferred tax assets to an amount that we believe is more likely than not to be realized. As of MarchJune 31,30, 2026, we have provided a valuation allowance of $1.7 million for deferred tax assets primarily related to Australian net operating loss and capital loss carry forwards and Massachusetts tax credit carry forwards that are not expected to be realized.
On July 4, 2025, President Donald Trump signed the One Big Beautiful Bill Act ("OBBBA") into law. Key corporate tax provisions include the restoration of 100% bonus depreciation for qualifying assets, immediate expensing for domestic research and experimental expenditures, changes to Section 163(j) interest limitations, updates to GILTI and FDII rules, amendments to energy credits, and expanded Section 162(m) aggregation requirements. The impact of these adjustments is reflected in our tax provision and financial statements for the threethree- monthsand six-month periods ended MarchJune 31,30, 2026. We will continue to monitor future legislative developments and assess their impact on our tax position and financial reporting.
As of MarchJune 31,30, 2026, our cash and cash equivalents were $26.9$26.6 million, as compared to $28.2 million as of December 31, 2025. We had $340.4$349.6 million in short-term marketable securities as of MarchJune 31,30, 2026, as compared to $330.9 million as of December 31, 2025. Our cash and cash equivalents are bank deposits and liquid investments with maturities of 90 days or less at the date of purchase held in our operating bank accounts. Our short-term marketable securities primarily include corporate debt securities, U.S. government agency securities, and money market investments with maturities of 90 days or less at the date of purchase held outside of our operating bank accounts. liquid investments with maturities of 90 days or less at the date of purchase and consist primarily of operating bank accounts. As of MarchJune 31,30, 2026, our short-term marketable securities reflected an unrealized loss of $0.9$1.0 million as a result of market interest rates.
The Senior Convertible Notes will mature on February 1, 2030, unless earlier repurchased, redeemed or converted. The proceeds from the issuance of the Senior Convertible Notes were approximately $167.7 million, net of debt issuance costs totaling $4.8 million. The Senior Convertible Notes bear interest at a rate of 2.50% per year, and interest is payable semiannually in arrears on August 1 and February 1 of each year. For the threesix months ended MarchJune 31,30, 2026, we made $2.2 million in interest payments. We did not make any interest payments for the threesix months ended MarchJune 31,30, 2025. The initial conversion rate is 8.3521 shares of common stock per $1,000 principal amount of the Senior Convertible Notes, which represented an initial conversion price of approximately $119.73 per share of common stock and a premium of approximately 30% over the closing price of our common stock on December 16, 2024. In connection with the most recent payment made on MarchJune 26,4, 2026 of a quarterly cash dividend of $0.25 per share (an increase from the quarterly dividend amount of $0.16 per share as of the time of issuance of the Senior Convertible Notes), the conversion rate of the Senior Convertible Notes was increased to 8.37468.3820 shares of common stock per $1,000 principal amount of the Senior Convertible Notes, which represents a conversion price of approximately $119.41$119.30 per share of common stock. A similar adjustment to the conversion rate will be made upon payment of the quarterly cash dividend of $0.25 on JuneSeptember 4,3, 2026, and upon payment of subsequent quarterly dividends in excess of $0.16 per share. The conversion rate and conversion price are subject to customary adjustments upon the occurrence of certain events as described in the Indenture.
Noteholders may convert all or a portion of their Senior Convertible Notes at their option only in the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on June 30, 2025, if the last reported sale price per share of our common stock exceeds 130% of the conversion price for each of at least 20 trading days during the 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter; (2) during the five consecutive business days immediately after any five consecutive trading day period in which the trading price per $1,000 principal amount of Senior Convertible Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price per share of our common stock on such trading day and the conversion rate on such trading day; (3) upon the occurrence of certain corporate events or distributions on the our common stock, as described in the Indenture; (4) if we call (or are deemed to have called) any Senior Convertible Notes for redemption; and (5) at any time from, and including, August 1, 2029, until the close of business on the second scheduled trading day immediately before the maturity date. We have the right to elect to settle conversions either in cash, shares of common stock, or in a combination of cash and shares of our common stock.
We recognized operating income of $17.8$38.2 million for the threesix months ended MarchJune 31,30, 2026, compared to $12.6$28.8 million for the threesix months ended MarchJune 31,30, 2025. We expect to fund any increased costs and expenditures from our existing cash and cash equivalents and short-term marketable securities, though our future capital requirements depend on numerous factors. These factors include, but are not limited to, the following:
Net cash provided by operating activities. Net cash provided by operating activities was $15.1$31.1 million for the threesix months ended MarchJune 31,30, 2026, consisting of $15.7$32.7 million in net income, adjusted for non-cash items of $5.7$11.0 million (including primarily depreciation and amortization of $2.6$5.3 million, stock-based compensation of $2.1$4.0 million, provisions for inventory write-offs and credit losses of $0.8$1.9 million, amortization of issuance costs on convertible senior notes of $0.2$0.4 million, foreign currency transaction effect on income of $0.1 million, offset by non-cash investment income of $0.1$0.8 million), and a net use of working capital of $6.3$12.7 million. The net cash used for working capital was driven by increases in accounts receivable of $2.5 million, decreases in accounts payable and other liabilities of $2.3$6.5 million, increases in accounts receivable of $2.9 million, increases in inventory and other deferred costs of $1.4$1.9 million, and decreases in accrued interest of $1.1 million, offset by decreasesincreases in prepaid expenses and other assets of $1.0$1.4 million.
Net cash provided by operating activities was $9.0$29.3 million for the threesix months ended MarchJune 31,30, 2025, consisting of $11.0$24.8 million in net income, adjusted for non-cash items of $5.4$10.7 million (including primarily depreciation and amortization of $2.6$5.2 million, stock-based compensation of $2.0$4.0 million, provisions for inventory write-offs and credit losses of $0.6$1.4 million, and amortization of issuance costs on convertible senior notes of $0.2$0.4 million, offset by foreign currency effect on income of less than $0.1$0.3 million), and net use of working capital of $7.4$6.2 million. The net cash used for working capital was driven by decreases in accounts payable and other liabilities of $5.3 million, increases in accounts receivable of $4.6$5.3 million, and increases in inventory and other deferred costs of $3.5 million, and decreases in accounts payable and other liabilities of $1.3 million, offset by increases in accrued interest of $2.2 million and decreases in prepaid expenses and other assetsliabilities of $2.7 million and increases in accrued interest of $1.1$1.7 million.
Net cash used in investing activities. Net cash used in investing activities was $13.1$24.2 million for the threesix months ended MarchJune 31,30, 2026, consisting of purchases of short-term marketable securities of $150.9$231.4 million, purchases of property and equipment of $2.8$5.1 million, and payments related to acquisitions of less than $0.1$0.2 million, offset by proceeds from the sale of short-term marketable securities of $140.6$212.5 million.
Net cash used in investing activities was $4.3$20.7 million for the threesix months ended MarchJune 31,30, 2025, consisting of purchases of short-term marketable securities of $2.9$17.8 million, purchases of property and equipment of $1.4$2.7 million, and payments related to acquisitions of less than $0.1 million.
Net cash used in financing activities. Net cash used in financing activities was $3.2 million for the three months ended March 31, 2026, consisting of dividend payments of $5.7 million, offset by proceeds from stock option exercises of $2.5 million, net of shares repurchased used to pay employee payroll taxes.
Net cash used in financing activities. Net cash used in financing activities was $5.2$8.3 million for the threesix months ended MarchJune 31,30, 2025,2026, consisting of dividend payments of $4.5$11.4 million and deferred payments for acquisitions of $1.4$0.1 million, offset by proceeds from stock option exercises of $0.7$3.3 million, net of shares repurchases usedrepurchased to pay employee payroll taxes.
Net cash used in financing activities was $8.0 million for the six months ended June 30, 2025, consisting of dividend payments of $9.0 million and deferred payments for acquisitions of $1.4 million, offset by proceeds from stock option exercises of $2.5 million, net of shares repurchases to pay employee payroll taxes.
On AprilJuly 28, 2026, our Board of Directors approved a quarterly cash dividend on its common stock of $0.25 per share payable on JuneSeptember 4,3, 2026, to stockholders of record at the close of business on MayAugust 21,20, 2026.
LMAT insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 0 Form 4 filings and open-market sales in 4 filings (4 insiders, 2 trade dates, 58,396 shares, about $6.3M). Net open-market shares: -58,396 (purchases minus sales); net value about -$6.3M.Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-09-01 | Roush John A |
Option exercise | 3,444 | $48.60 | $167.4K |
| 2026-06-04 | Lemaitre George W |
Grant/award | 11,974 | — | — |
| 2026-06-04 | Lemaitre George W |
Gift | 11,974 | — | — |
| 2026-05-08 | Lemaitre George W |
Open-market sale | 27,881 | $108.69 | $3.0M |
| 2026-05-08 | Kamke Trent G |
Open-market sale | 2,928 | $107.00 | $313.3K |
| 2026-05-07 | Lemaitre George W |
Open-market sale | 18,600 | $107.64 | $2.0M |
| 2026-05-07 | Ross Bridget A |
Open-market sale | 5,044 | $111.10 | $560.4K |
| 2026-05-07 | Ross Bridget A |
Option exercise | 3,444 | $48.60 | $167.4K |
| 2026-05-07 | Ross Bridget A |
Option exercise | 1,600 | $47.19 | $75.5K |
| 2026-05-07 | Jasinski Lawrence J |
Option exercise | 1,069 | $47.19 | $50.4K |
| 2026-05-07 | Jasinski Lawrence J |
Open-market sale | 3,943 | $110.00 | $433.7K |
| 2026-05-07 | Jasinski Lawrence J |
Option exercise | 865 | $101.12 | $87.5K |
| 2026-05-07 | Jasinski Lawrence J |
Option exercise | 924 | $54.65 | $50.5K |
| 2026-04-22 | Pellegrino Joseph P Jr |
Option exercise | 2,941 | $35.48 | $104.3K |
Well-known investors holding LMAT (13F)
| Investor | Quarter | Shares | Reported value | % of their 13F | Change vs prior quarter |
|---|---|---|---|---|---|
| Two Sigma Investments | 2026-06-30 | 316,528 | $30.4M | 0.02% | Added 12% |
| Renaissance Technologies | 2026-06-30 | 169,502 | $16.3M | 0.02% | Added 22% |
| Citadel Advisors (Ken Griffin) | 2026-06-30 | 0 | $16.2M | 0.01% | No change |
| Point72 Asset Management (Steve Cohen) | 2026-06-30 | 0 | $9.1M | 0.01% | New position |
| Citadel Advisors (Ken Griffin) | 2026-06-30 | 42,833 | $4.1M | 0.0% | Reduced 56% |
| D. E. Shaw & Co. | 2026-06-30 | 36,464 | $3.5M | 0.0% | Reduced 56% |
| AQR Capital Management (Cliff Asness) | 2026-06-30 | 20,623 | $2.0M | 0.0% | Added 1% |
| Gotham Asset Management (Joel Greenblatt) | 2026-06-30 | 15,866 | $1.5M | 0.0% | Added 67% |
| Millennium Management (Israel Englander) | 2026-06-30 | 8,994 | $863.1K | 0.0% | Reduced 83% |