LeMaitre Vascular, Inc. (NASDAQ:LMAT) Q1 2018 Earnings Conference Call - Preliminary Transcript
Apr 25, 2018 • 05:00 pm ET
Welcome to the LeMaitre Vascular First Quarter 2018 Financial Results Conference Call. As a reminder, today's call is being recorded. At this time, I'd like to turn the call over to Mr. J.J. Pellegrino, Chief Financial Officer of LeMaitre Vascular. Please go ahead, sir.
Joseph P. Pellegrino Jr.
Thank you, (Skylar) (ph) . Good afternoon and thank you for joining us on our Q1 2018 conference call. With me on today's call is our Chairman and CEO, George LeMaitre. Our President, Dave Roberts, is travelling overseas on business and will not be on the phone call.
Before we begin, I'll read our Safe Harbor statement. Today, we will make some forward-looking statements, the accuracy of which is subject to risks and uncertainties. Wherever possible, we will try to identify those forward-looking statements by using words such as, believe, expect, anticipate, pursue, forecast, and similar expressions.
Our forward-looking statements are based on our estimates and assumptions as of today, April 25, 2018, and should not be relied upon as representing our estimates or views on any subsequent date. Please refer to the cautionary statement regarding forward-looking information and the risk factors in our most recent 10-K and subsequent SEC filings, including disclosure of the factors that could cause results to differ materially from those expressed or implied.
During this call, we will discuss non-GAAP financial measures, which include organic sales and growth numbers. A reconciliation of GAAP to non-GAAP measures discussed in this call is contained in the associated press release and is available in the Investor Relations section of our Web-site at www.lemaitre.com. I'll now turn the call over to George LeMaitre.
George W. LeMaitre
Thanks J.J. The highlight of Q1 was the increasing acceptance by the North American sales force of the Restore Flow acquisition. [Indiscernible] sales hit a record in Q1, up 48% over the prior year, and we see more growth ahead. These [indiscernible] saphenous veins are a close substitute to the in-situ saphenous veins prepared by the LeMaitre Valvulotomes. These two products really are two peas in a pod.
Now I'd like to remind you of several initiatives we have recently undertaken to more tightly focus our Company on vascular surgery, and in particular our higher-margin and biologic product lines. The recent Reddick divestiture was a pruning of the portfolio, eliminating our two non-vascular product lines. This $7.4 million divestiture also expands our warchest beyond the $45 million of cash on the March 31 balance sheet.
In the past, we've used our cash to acquire companies and pay dividends. This remains our intention. Also, coming into the year we modified our sales commission plan and our intra-company price lists to further incentify our sales reps towards higher-margin devices. Specifically, we found in Europe our grafts and catheters were sometimes being sold below cost. This has been fixed. In China we have also made changes recently. In Q1 we cut out a layer of master importers in order to sell to hospitals through just a single layer of distributors.
At the same time, we continue