LeMaitre Vascular Annual Report 2019

← All annual reports

FY2019 Annual Report · LeMaitre Vascular

Loading PDF…

2019 AnnuAl RepoRt

www.lemaitre.com

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

(Mark One)

☒

☐

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2019

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to .

Commission File Number 001-33092

LEMAITRE VASCULAR, INC.

(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction of incorporation or organization)

04-2825458
(I.R.S. Employer Identification No.)

63 Second Avenue, Burlington, Massachusetts
(Address of principal executive offices)

01803
(Zip Code)

Registrant’s telephone number, including area code 781-221-2266

Securities registered under Section 12(b) of the Act:

Title of each class
Common stock, $0.01 par value per share

Trading symbol
LMAT

Name of exchange on which registered
The Nasdaq Global Market

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes: ☐ No: ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes: ☐ No: ☒
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of

1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes: ☒ No: ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405

of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such
files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or

emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth
company” in Rule12b-2 of the Exchange Act.

Large accelerated filer ☐ Accelerated filer ☒ Non-accelerated filer ☐ Smaller reporting company ☐ Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any

new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule12b-2 of the Act). Yes: ☐ No: ☒
The aggregate market value of the voting and non-voting common stock held by non-affiliates of the registrant was $261,775,368 computed by

reference to the last reported sale price of $27.98 per share as reported by The Nasdaq Global Market as of the last business day of the registrant’s most
recently completed second fiscal quarter. For purposes of this calculation, shares held by stockholders whose ownership exceeded 5% of the registrant’s
common stock outstanding were deemed to be held by affiliates. Exclusion of such shares should not be construed to indicate that any such person
possesses the power, direct or indirect, to direct or cause the direction of the management or policies of the registrant or that such person is controlled by
or under common control with the registrant.

At March 2, 2020, the registrant had 20,178,506 shares of common stock, par value $0.01 per share, outstanding.

DOCUMENTS INCORPORATED BY REFERENCE
Part III of this Form 10-K incorporates information by reference from the registrant’s definitive proxy statement to be filed with the Securities and

Exchange Commission within 120 days after the close of the fiscal year covered by this annual report.

This page intentionally left blank

LEMAITRE VASCULAR

2019 ANNUAL REPORT ON FORM 10-K
TABLE OF CONTENTS

PART I

Item 1. Business .......................................................................................................................................................
Item 1A. Risk Factors ..................................................................................................................................................
Item 1B. Unresolved Staff Comments ........................................................................................................................
Item 2. Properties .....................................................................................................................................................
Item 3. Legal Proceedings ........................................................................................................................................
Item 4. Mine Safety Disclosures ...............................................................................................................................

PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity

Securities ...................................................................................................................................................
Item 6. Selected Financial Data ................................................................................................................................
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations .......................
Item 7A. Quantitative and Qualitative Disclosures About Market Risk .....................................................................
Item 8. Financial Statements and Supplementary Data ............................................................................................
Item 9. Changes In and Disagreements With Accountants on Accounting and Financial Disclosure ......................
Item 9A. Controls and Procedures ...............................................................................................................................
Item 9B. Other Information .........................................................................................................................................

PART III

Item 10. Directors, Executive Officers and Corporate Governance ...........................................................................
Item 11. Executive Compensation ..............................................................................................................................
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters .....
Item 13. Certain Relationships and Related Transactions, and Director Independence .............................................
Item 14. Principal Accounting Fees and Services ......................................................................................................

PART IV

Item 15. Exhibits and Financial Statements Schedules ..............................................................................................
Item 16. Form 10-K Summary ...................................................................................................................................
SIGNATURES .................................................................................................................................................................

1
16
33
33
33
33

34
36
37
52
53
53
54
56

56
56
56
57
57

57
60
61

This page intentionally left blank

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

PART I

This Annual Report on Form 10-K contains forward-looking statements (within the meaning of the federal securities law) that
involve substantial risks and uncertainties, particularly risks related to the regulatory environment, our common stock, fluctuations
in our quarterly and annual results, our ability to successfully integrate acquisitions into our business, and risks related to our
business and industry generally, such as risks inherent in the process of developing and commercializing products and services
that are safe and effective for use in the peripheral vascular disease market. All statements, other than statements of historical
facts, included in this Annual Report on Form 10-K regarding our strategy, future operations, future financial position, future net
sales, gross margin expectations, projected costs, projected expenses, prospects and plans and objectives of management are
forward-looking statements. The words “anticipates,” “believes,” “estimates,” “expects,” “intends,” “may,” “plans,” “projects,”
“will,” “would,” and similar expressions are intended to identify forward-looking statements, although not all forward-looking
statements contain these identifying words. We have based these forward-looking statements on our current expectations and
projections about future events. Although we believe that the expectations underlying any of our forward-looking statements are
reasonable, these expectations may prove to be incorrect, and all of these statements are subject to risks and uncertainties. Should
one or more of these risks and uncertainties materialize, or should underlying assumptions, projections, or expectations prove
incorrect, our actual results, performance, or financial condition may vary materially and adversely from those anticipated,
estimated, or expected. No forward-looking statement can be guaranteed and actual results may vary materially from those
projected in the forward-looking statements. We intend to take advantage of the Safe Harbor provisions of the Private Securities
Litigation Reform Act of 1995 regarding our forward-looking statements, and are including this sentence for the express purpose
of enabling us to use the protections of the safe harbor with respect to all forward-looking statements. We have included important
factors in the cautionary statements included in this Annual Report on Form 10-K, particularly in the section entitled “Risk
Factors,” that we believe could cause actual results or events to differ materially from the forward-looking statements that we
make. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint
ventures, investments or terminations of distribution arrangements that we may make. These statements, like all statements in this
report, speak only as of the date of this Annual Report on Form 10-K (unless another date is indicated), and we undertake no
obligation to update or revise these statements in light of future developments. We do not assume any obligation to update any
forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law.

The following discussion should be read in conjunction with our financial statements and the related notes contained

elsewhere in this Annual Report on Form 10-K and in our other Securities and Exchange Commission filings.

Unless the context requires otherwise, references to “LeMaitre Vascular,” “LeMaitre,” “we,” “our,” and “us” in this

Annual Report on Form 10-K refer to LeMaitre Vascular, Inc. and its subsidiaries.

LeMaitre, AlboGraft, AnastoClip, AnastoClip GC, Cardial, CardioCel, Dialine, Eze-Sit, Glow ‘N Tell, InvisiGrip, LeMaitre

Valvulotome, LeverEdge, LifeSpan, MollRing Cutter, Omniflow, ProcCol, Pruitt, Pruitt F3, Pruitt-Inahara, Python, Reddick,
RestoreFlow, Syntel, VascuCel, VascuTape, TRIVEX, Wovex, XenoSure, and the LeMaitre Vascular logo are registered
trademarks of LeMaitre Vascular or one of its subsidiaries, and AlboSure, Chevalier, DuraSure, EndoRE, Flexcel, MultiTASC,
Periscope, and PeriVu are unregistered trademarks of LeMaitre Vascular. This Annual Report on Form 10-K also includes the
registered and unregistered trademarks of other persons, which are the property of their respective owners. Solely for
convenience, trademarks and trade names referred to in this report may appear without the ® or TM symbols.

Item 1.

Business

Overview

LeMaitre Vascular is a global provider of medical devices and human tissue cryopreservation services largely used in the
treatment of peripheral vascular disease. We develop, manufacture, and market vascular devices to address the needs of vascular
surgeons and other specialties such as cardiac surgeons and neurosurgeons. Our diversified portfolio of devices consists of brand
name products that are used in arteries and veins outside of the heart and are well known to vascular surgeons, and includes the
LeMaitre valvulotome, the XenoSure biologic patch, the Pruitt F3 carotid shunt, VascuTape radiopaque tape, and Syntel
embolectomy catheters. Our principal product offerings are sold throughout the world, primarily in the United States, Europe and
Asia/Pacific Rim. We estimate that the annual worldwide market that our core product lines address is approximately $900
million.

We sell our products and services primarily through a direct sales force. As of December 31, 2019 our sales force was

comprised of 112 sales representatives in North America, Europe and Asia/Pacific Rim, including three export managers, one in
each of the three geographic regions. Our worldwide headquarters is located in Burlington, Massachusetts, and we also have
North American sales offices in Chandler, Arizona and Vaughan, Canada. Our European headquarters is located in Sulzbach,
Germany, with additional European sales offices in Milan, Italy; Madrid, Spain; and Hereford, England. Our Asia/Pacific Rim
headquarters is located in Singapore, with additional Asia/Pacific Rim sales offices in Tokyo, Japan; Shanghai, China; and North
Melbourne, Australia. During the years ended December 31, 2019 and 2018, approximately 94% and 95%, respectively, of our net
sales were generated in territories in which we employ direct sales representatives. We sell our products in other countries through
distributors.

The Peripheral Vascular Disease Market

Based on industry statistics, we estimate that peripheral vascular disease affects more than 200 million people worldwide

and that the annual worldwide market for all peripheral vascular devices exceeds $5 billion. The disease encompasses a number of
conditions in which the arteries or veins that carry blood to or from the legs, arms, or organs other than the heart become
narrowed, obstructed, weakened, or otherwise compromised. In many cases peripheral vascular disease goes undetected,
sometimes leading to life-threatening events including stroke, ruptured aneurysm, pulmonary embolism or death. We believe that
the peripheral vascular disease market will grow due to the increase in the incidence and diagnosis rates of peripheral vascular
disease, a shift by doctors to using higher-priced endovascular devices, and the adoption of western healthcare standards in the
developing world. Clinical studies have identified several factors that increase the risk of peripheral vascular disease, including
smoking, diabetes, obesity, high blood pressure, lack of exercise, coronary artery disease, high cholesterol, and being over the age
of 65. Demographic trends suggest an increase in the prevalence of peripheral vascular disease over time, driven primarily by
rising levels of obesity and diabetes and an aging population. We believe that our strong brands, established sales force, evolving
suite of peripheral vascular device offerings, and broad network of vascular surgeon customers position us to capture an
increasing share of this large and growing market.

Vascular surgeons treat peripheral vascular disease and also perform vascular procedures associated with other diseases,

such as end-stage renal disease. We estimate that there are more than 17,000 vascular surgeons worldwide, including 2,800 board-
certified vascular surgeons and several thousand general surgeons who perform vascular procedures in the United States, as well
as more than 3,000 vascular surgeons in Europe and Asia/Pacific Rim. In contrast to other medical specialists, such as
interventional cardiologists and interventional radiologists, vascular surgeons perform both open vascular surgeries and
endovascular procedures. Open vascular surgery involves opening the body, cutting vessels, and suturing. Endovascular
procedures typically are minimally invasive, catheter-based procedures involving repairing vessels from within using real-time
imaging. We estimate that in 2019, over 90% of our net sales were from devices used in open vascular procedures.

Our Business Strategies

We have grown our business by using a three-pronged strategy: focusing on the vascular surgeon call point, competing for

sales in low rivalry niche markets, and expanding our growth platform through our worldwide direct sales force as well as
acquiring and developing complementary vascular devices.

•

Focused call point. We have historically directed our product offering and selling efforts towards the vascular
surgeon, and estimate that in 2019 approximately 84% of our sales were to hospitals for use by vascular surgeons.
As vascular surgeons are typically positioned to perform both open vascular surgeries and endovascular procedures,
we sell devices in both the open and endovascular markets to the same end user. More recently we have begun to
explore adjacent market customers, or non-vascular surgeon customers, who can be served by our vascular device
technologies, such as cardiac surgeons and neurosurgeons.

Low rivalry niche segments. We seek to build and maintain leading positions in niche product and services
segments. We believe that the relative lack of competitive focus on these segments by larger competitors, as well as
the differentiated features and consistent quality of our products, enable higher selling prices and market share
gains. In recent years we have also sought to sell complementary offerings into larger, more competitive market
segments, particularly when we believe that our offerings in those segments are differentiated, such as the
Omniflow II biosynthetic graft or the RestoreFlow human tissue cryopreservation services.

•

Direct sales force expansion, and the addition of complementary products through acquisitions and research and
development. We sell our products primarily through a direct sales force in North America, Europe and Asia/Pacific
Rim. Since 1998, we have built our sales force from zero to 112 direct sales representatives, including three export
managers. We believe that direct-to-hospital sales build closer customer relationships, allow for higher selling
prices and gross margins, and are not subject to the risk of customer loss related to distributor turnover. In countries
where we do not have a direct sales force, we sell our products through distributors. For the year ended
December 31, 2019, approximately 94% of our net sales were generated through our direct-to-hospital sales force,
and no single hospital customer accounted for more than 2% of our net sales. We intend to further expand and
diversify our product offerings and add new technology platforms. We believe our experience acquiring and
integrating product lines and businesses is one of our competitive advantages. We evaluate the acquisition of
additional product lines and businesses that may be complementary to our product offerings, refine our current
product lines, develop new applications for our existing technologies, and obtain regulatory approvals for our
devices in new segments and geographies in order to further access the broader peripheral vascular device market
and select other markets.

Acquisition History

We were founded in 1983 by George D. LeMaitre, M.D., a vascular surgeon who designed and developed the LeMaitre
Valvulotome. Through a combination of strategic acquisitions and research and development efforts, we have expanded to 15
product lines. We have completed 23 acquisitions of complementary products since 1998:

Year
1998
1999
2001
2003
2004
2005
2007
2007
2007
2007
2010
2012
2013
2013
2014
2014
2015
2016
2016
2018
2018
2019
2019

Acquisition

Whittaker Screen Printing

Vermed
Ideas for Medicine
Credent
VCS Clip
Endomed
Vascular Innovations
Vascular Architects
UnBalloon
Biomateriali
LifeSpan
XenoSure
Clinical Instruments
TRIVEX
Xenotis Pty Ltd
PeriVu
Tru-Incise (Eze-Sit) OUS
ProCol
RestoreFlow
Syntel and Python
Cardial
Tru-Incise (Eze-Sit) US
CardioCel and VascuCel

Key Product(s) and Services
Radiopaque tape manufacturing operations
Embolectomy catheters

Carotid shunts, balloon catheters, and laparoscopic cholecystectomy devices

Polycarbonate grafts
Vessel closure systems
Stent grafts
Contrast injector
Remote endarterectomy devices
Stent graft modeling catheters
Polyester grafts and patches
ePTFE grafts
Biologic patches
Carotid shunts and embolectomy catheters
Powered phlebectomy system
Biosynthetic grafts
Angioscopes
Valve cutters
Biologic grafts
Human tissue cryopreservation services
Embolectomy catheters
Polyester grafts, valvulotomes, surgical glue
Valve cutters
Biologic patches

We have relocated the manufacturing operations associated with 15 of our 23 acquisitions to our Burlington, Massachusetts
headquarters and we continue to look at ways to make our operations more efficient. We purchase remote endarterectomy devices
and powered phlebectomy systems from third parties. The manufacture of our biosynthetic vascular grafts take place in our North
Melbourne, Australia facility and the human tissue processing and cryopreservation operations associated with RestoreFlow
allografts take place in our Fox River Grove, Illinois facility. The manufacture of our Cardial devices takes place in our Saint-
Etienne, France facility. We purchase our CardioCel and VascuCel patches from Admedus Ltd in Toowong, Australia.

Our Products and Services

We have a portfolio of 15 product lines, most of which are designed to treat vascular disease, and most of which are

designed for use in open vascular surgery. We also provide services related to the processing and cryopreservation of human
vascular tissue. Our products and services address various anatomical areas including the carotid arteries, lower extremities, upper
extremities, aorta and other areas. In 2019, the lower extremities product lines and services were 51% of revenues, the carotid
artery product lines comprised 31% of revenues, and other areas combined were 18%. In 2018, the lower extremities product lines
and services were 51% of revenues, the carotid artery product lines comprised 34% of revenues, and other areas combined were
15%. In 2017, the lower extremities product lines and services were 51% of revenues, the carotid artery product lines comprised
32% of revenues, and other areas combined were 17%. No single product line accounted for more than 25% of our revenues in
2019, 2018 or 2017.

Of our 15 product offerings, six are biologic devices that are implanted in the patient, and one is the service of processing

and cryopreserving human tissue for implantation into the patient. These offerings include the XenoSure patch (bovine
pericardium), CardioCel and VascuCel bio-scaffold patches (bovine pericardium), ProCol graft (bovine mesenteric vein),
Omniflow II biosynthetic graft (ovine tissue and synthetic mesh), surgical glue (porcine gelatin) and the RestoreFlow Allograft
cryopreserved graft (human tissue). As a percentage of sales, these biologic product lines represented 35% in 2019, 36% in 2018,
and 34% in 2017.

Angioscopes

The PeriVu Disposable Angioscope is a fiberoptic catheter used for viewing the lumen of a blood vessel. It also provides

direct visualization of valves during in-situ bypass procedures.

Balloon Catheters for Embolectomy, Thrombectomy, Occlusion and Perfusion

Our LeMaitre and Syntel lines of embolectomy catheters are used to remove blood clots from arteries or veins. We sell

single-lumen latex and latex-free embolectomy catheters as well as dual-lumen latex and latex-free embolectomy catheters. The
dual-lumen embolectomy catheters enable clot removal and simultaneous irrigation or guide-wire trackability. Our Syntel
thrombectomy catheter features a silicone balloon and is designed for removing thrombi in the venous system. Occlusion catheters
temporarily occlude blood flow to allow the vascular surgeon time and space to complete a given procedure. Perfusion catheters
temporarily perfuse blood and other fluids into the vasculature. Our Pruitt line of occlusion and perfusion catheters reduces vessel
trauma by using internal balloon fixation rather than traditional external clamp fixation.

Carotid Shunts

Our Pruitt F3, Pruitt F3-S, Pruitt-Inahara and Flexcel carotid shunts are used to temporarily shunt blood to the brain while

the surgeon removes plaque from the carotid artery in a carotid endarterectomy surgery. Our Pruitt F3, Pruitt F3-S and Pruitt-
Inahara shunts feature internal balloon fixation rather than traditional external clamp fixation, reducing vessel trauma. Our Flexcel
shunt is a non-balloon shunt offered for surgeons who prefer to shunt with external clamp fixation.

Powered Phlebectomy Device

Our TRIVEX powered phlebectomy system is comprised of capital equipment and disposables that enable removal of

varicose veins. In this procedure, an illuminator is inserted through a small incision in the leg, enabling visualization of varicose
veins. A second instrument removes the veins. Compared to conventional hook phlebectomy, this surgical procedure is faster and
results in more complete vein removal through fewer incisions.

Radiopaque Tape

Our VascuTape Radiopaque Tape is a flexible, medical-grade tape with centimeter or millimeter markings printed with our
proprietary radiopaque ink that is visible both to the eye and to an x-ray machine or fluoroscope. VascuTape Radiopaque Tape is
applied externally to the skin and provides interventionalists with a simple way to cross-reference between the inside and the
outside of a patient’s body, allowing them to locate tributaries or lesions beneath the skin.

Remote Endarterectomy Devices

Our EndoRE line of remote endarterectomy devices are used to remove plaque from arteries in the leg in a minimally
invasive procedure requiring a single incision in the groin. Our EndoRE devices are used to separate the plaque from the vessel,
cut the far end of the plaque to free it for removal, and then withdraw it from the vessel.

Valvulotomes

Our valvulotomes cut valves in the saphenous vein, a vein that runs from the foot to the groin, so the vein can function as an

artery to carry blood past diseased arteries to the lower leg or the foot. We believe our valvulotomes reduce costs for hospitals by
enabling bypass surgery to be performed with several small incisions rather than one continuous ankle-to-groin incision, thereby
reducing the length of hospital stays and the likelihood of wound complications.

Vascular Grafts

Our AlboGraft, Wovex and Dialine II vascular grafts are collagen-impregnated polyester grafts used to bypass or replace

diseased arteries. They are available in both straight tube and bifurcated versions.

Our LifeSpan ePTFE vascular graft is an expanded polytetrafluoroethylene (ePTFE) graft used to bypass or replace
diseased arteries and to create dialysis access sites. LifeSpan is available in both regular and thin wall options and with an optional
full or partial external spiral support. Our stepped and tapered LifeSpan models are designed to reduce the risk of steal syndrome
and high cardiac output, complications that may arise in dialysis access grafts.

Our Omniflow II biosynthetic vascular graft is a composite of cross-linked ovine collagen with a polyester mesh
endoskeleton. It is used to bypass or replace diseased leg arteries and to create dialysis access sites. This device is not currently
available in the United States.

Our ProCol biologic graft is a bovine mesenteric vein used for dialysis access in patients with a previously-failed synthetic

graft. Currently we distribute these grafts in the United States.

Through our RestoreFlow allograft business, we provide human tissue cryopreservation services, in particular the
processing and cryopreservation of veins and arteries. Our RestoreFlow allografts are cryopreserved human tissue grafts,
including saphenous veins, femoral veins and arteries, aortoiliac arteries and aortic and pulmonary valved conduits. These
allografts are used in a variety of vascular reconstructions such as peripheral bypass, hemodialysis access, and aortic infections.
Currently we offer these cryopreservation services in the United States and Canada.

Vascular and Cardiac Patches

Our XenoSure biologic patches are made from bovine pericardium, and is used primarily for closure of vessels after

surgical intervention. Our AlboSure Vascular Patch is a polyester patch used primarily for vessel closure after surgical
intervention.

Our VascuCel and CardioCel biologic patches are acellular, collagen bioscaffolds with optimized biocompatibility and zero

aldehyde toxicity. These patches are used in vessel repair as well as heart repair and reconstruction, including more intricate
neonatal repairs.

Closure Systems

Our AnastoClip AC and AnastoClip GC closure systems attach vessels to one another with titanium clips instead of sutures.

These closure systems create an interrupted anastomosis that expands and contracts as the vessel pulses, which surgeons believe
improves the durability of the anastomosis. The AnastoClip AC and AnastoClip GC closure systems also facilitate compliant dura
closure in neuro applications.

Surgical Glue

Our Cardial surgical glue is a biologic-based glue that is typically used for joining dissected vessel layers and reinforcing

sutures in cardiac and vascular procedures.

Sales and Marketing

As of December 31, 2019, we employed 112 field sales representatives, including three export managers. We believe the

expansion of our sales force since 1998 has been a key success factor, and it remains one of our primary long-term strategies.
Over 94% of net sales occurred in territories in which we employ field sales representatives.

Outside our direct markets, we generally sell our products through country-specific distributors, such as South Korea,

Russia and Brazil.

In addition, we engage in direct marketing efforts, including direct mail and exhibitions at medical congresses, which we
believe are important to our brand development. We believe that direct marketing allows us to market to vascular surgeons who
are beyond the reach of our direct sales force.

We also provide training to our vascular surgeon customers on specific vascular surgery procedures including in situ or

peripheral bypass, carotid endarterectomy and interrupted anastomosis. More recently we initiated a general surgical skills
training program targeted to less experienced doctors as a way to introduce them to our product offerings.

Research and Development

Our research and development activities have historically focused on developing enhancements and extensions to our

existing product lines. In 2018, our efforts were primarily focused on expanding and enhancing our biologic product lines
including XenoSure and Omniflow II, and the integration of our ProCol manufacturing into our Burlington facility. We also
introduced quality-based improvements to the design of the LeMaitre valvulotome as well as our powered phlebectomy system,
TRIVEX. In 2019, our focus remained on biologic products, launching a biologic dural patch for use in open neuro-surgery
procedures, and the integration of Omniflow II manufacturing into our Burlington facility. In addition, we undertook a project to
begin distribution of cardiac allografts for use in pediatric and adult cardiac replacement and repair. Finally, we continued
development on a next-generation powered phlebectomy system.

All of our products are subject to our design control procedures throughout the various stages of product development.
These procedures may include bench testing, animal testing, human cadaveric studies and human clinical trials conducted by
independent physicians, and post-market surveillance of product performance, as appropriate. We may use feedback received
from independent physicians to demonstrate product functionality before commencing full-scale marketing of any product.

Our regulatory and clinical efforts have historically been focused largely on obtaining and maintaining regulatory approvals

in geographies worldwide. In the past we have not conducted clinical trials as we have generally acquired product lines with
regulatory approvals already established. In addition, we preferred to avoid the time, expense and risk associated with initiating
clinical trials. However, increasing regulatory requirements in many geographies has resulted in the need for more clinical and
non-clinical (i.e., animal) testing. As such, this component of our research and development spending has increased in recent
years. In 2017 we initiated a clinical trial in an effort to obtain the approval of our XenoSure device in China. The trial requires
the enrollment of 325 patients and we expect to complete the trial in 2020 and make our submission to the Chinese National
Medical Products Administration (NMPA) in 2021.

In 2017 the EU adopted new regulations for medical devices (MDR), which replace the European Medical Devices
Directive (93/42/EC as amended by 2007/47/EC) (MDD) and apply after a three year transition period ending on May 26, 2020.
After this date, our MDD certificates will remain valid until their expiration dates, which range from May 2020 to May 2024. Our
products will then be subject to the MDR, which require all of our products, regardless of classification, to obtain a new CE mark
in accordance with the new, more stringent standards under the MDR. Going forward, we expect a significant portion of our
regulatory and clinical time and expenses to be devoted to this transition.

Manufacturing and Processing

Our primary manufacturing facilities are located in Burlington, Massachusetts, where most of our products are produced.
We also have facilities in North Melbourne, Australia, where our Omniflow II product line is currently produced, Saint-Etienne,
France where our Wovex and Dialine grafts, Chevalier valvulotomes and surgical glue are produced, and Fox River Grove,
Illinois where RestoreFlow allografts are processed, cryopreserved, stored and distributed.

We typically integrate manufacturing of the newly acquired lines into our Burlington operations. However, our TRIVEX,

EndoRE, CardioCel and VascuCel, and selected embolectomy catheters are currently manufactured by third parties. We
completed a renovation of our manufacturing facility in Burlington in 2017 and in 2018 moved our ProCol biologic grafts into the
space. In 2019 we completed the expansion of our biologic cleanroom in order to transfer the manufacturing of our Omniflow II
biosynthetic graft from our North Melbourne, Australia facility. We expect the transfer to be completed in 2020. In 2018, we
initiated a project to transfer the manufacturing of the embolectomy business assets we acquired from Applied Medical. We
expect this transfer to be completed in 2020. In 2019 we leased a fifth Burlington building which will allow continued expansion
of our manufacturing footprint.

We manufacture certain proprietary components, assemble most of our devices ourselves, and inspect, test, and package all
of our finished products. By designing and manufacturing many of our products from raw materials, and assembling and testing as
many of our subassemblies and products as practical, we believe we can maintain better quality control, ensure compliance with
applicable regulatory standards and internal specifications, limit outside access to our proprietary technology, ensure adequate
product supply, and make design modifications in a timely manner. We have custom-designed proprietary manufacturing and
processing equipment and have developed proprietary enhancements for existing production machinery. Our products are built to
stock.

We process and cryopreserve human tissue provided to us by qualified tissue procurement organizations in the United

States. Donated human tissue is procured from deceased donors by these organizations. We have strict specifications regarding
tissue we will accept for processing relating to, among other things, the physical condition and characteristics of the tissue and the
donor, the medical history of the donor and certain test results of the donated tissue. We also use various supplies in connection
with the processing and cryopreservation of human tissue, including certain proprietary solutions and antibiotics.

Our management information systems provide us with the ability to evaluate our performance, collect business intelligence,

and make better strategic decisions. These systems include customer relationship management, order entry, invoicing, on-line
inventory management, lot traceability, purchasing, shop floor control, and shipping and distribution analysis, as well as various
accounting-oriented functions. During day-to-day operations, these systems enable us to track our products from order inception
through the manufacturing process and then ultimately through delivery of the product to the customer.

We purchase components from, and have certain product lines manufactured by, third parties. Most of our components are

readily available from several supply sources, but we do rely on single- and limited-source suppliers for several of our key product
components and our third-party-manufactured products, most notably the purchase of CardioCel and VascuCel devices from
Admedus Ltd. located in Toowong, Australia. While we do have a contractual arrangement with Admedus, we do not have
contractual arrangements with many of our suppliers and manufacturers, and we order our supplies and products on an as-needed
basis. There are relatively few, or in some cases no, alternative, validated sources of supply for these supplies, products and
components. At any time, our suppliers could discontinue or become incapable of the manufacture or supply of these materials on
acceptable terms or otherwise. We do not ordinarily carry a significant inventory of these supplies, products and components and
identifying and qualifying additional or replacement suppliers, if required, may not be accomplished quickly or at all and could
involve significant additional costs. To date, we have not experienced any significant supply disruptions from existing sources of
supplies, products and components, but there is no guarantee that we will not experience such disruptions in the future.

Our Burlington, North Melbourne and Saint-Etienne manufacturing facilities have been certified to ISO 13485 quality

management system standards, which enables us to satisfy certain regulatory requirements of the EU, Canada, and other foreign
jurisdictions. Our Fox River Grove, Illinois facility has been accredited by the American Association of Tissue Banks for the
processing, storage and distribution of cardiac and vascular tissue for transplantation and licensed by certain state agencies. Our
manufacturing and processing facilities are subject to periodic inspections by various regulatory authorities and Notified Bodies
(described below) to ensure compliance with domestic and non-U.S. regulatory requirements. See “Government Regulation” for
further information. In August 2017, our Burlington facilities were audited by the U.S. Food and Drug Administration (FDA), and
in January 2018, we underwent inspections by our European Notified Body, LRQA. In February 2018, our Fox River Grove
facility was inspected by the FDA, and our North Melbourne operations were inspected by our notified body, TUV Rheinland. In
February 2019, our Burlington facilities were audited by the Korean Ministry of Food and Drug Safety, and in March 2019, our
Burlington facilities were audited under the Medical Device Single Audit Program (MDSAP) which covers routine inspection
requirements for the United States, Canada, Japan, Australia and Brazil. The results of these inspections were satisfactory.

Competition

The segments in which our product lines compete are characterized by rapid change resulting from technological advances

and scientific discoveries. No one company competes against all of our product lines; rather, we compete with a range of
companies. Notable larger competitors include Baxter International, Inc., Boston Scientific Corporation, Cardiovascular Systems,
Inc., Medtronic, Becton, Dickinson and Company, CryoLife, Inc., Edwards Lifesciences Corporation, Getinge AB, LifeNet
Health, Inc., Terumo Medical Corporation, and W. L. Gore & Associates.

The success of our products relies on effective service support as well as superior product technology, quality, product and

service availability, reliability, ease of use, cost-effectiveness, physician familiarity, and brand recognition. While we also
compete on the basis of price, our products that are more technologically advanced than those of our competitors are sometimes
sold at higher prices than our competitors. We believe that our continued success will depend on our ability to broaden and
optimize our direct sales channel, acquire or develop additional complementary vascular devices, obtain regulatory and
reimbursement approvals, maintain sufficient inventory, and retain skilled personnel. We also compete on the basis of procedure
type. The treatment of peripheral vascular disease has experienced a shift from open vascular surgery towards minimally invasive
endovascular procedures, and most of our products are used primarily in open vascular surgery. Our ability to compete effectively
relies on keeping pace with existing or new product and technology offerings in the vascular device market, and the minimally
invasive endovascular procedure segment in particular.

Many of our competitors have substantially greater financial, technological, research and development, regulatory,

marketing, sales, and personnel resources than we do. Certain of these competitors are able to manufacture at lower costs and may
therefore offer comparable products at lower prices, especially commodity products such as polyester and ePTFE vascular grafts.
Certain of these competitors may also have greater experience in developing and improving products, obtaining regulatory
approvals, and manufacturing and marketing such products. In the case of allografts, certain competitors may have an advantage
in sourcing tissue due to higher volume purchases and longer term relationships with tissue procurement organizations.
Additionally, some of our competitors may obtain patent protection or regulatory approval or clearance, or achieve product
commercialization before us, any of which could materially adversely affect our business.

Intellectual Property

We believe that our success is dependent, to a certain extent, on the development and maintenance of proprietary aspects of
our technologies. We rely on a combination of trade secret laws, patents, trademarks and confidentiality and invention assignment
agreements to protect our intellectual property rights.

We maintain and license patents in the United States, Europe and other strategic locations relating to various aspects of

certain of our products and/or manufacturing processes. The majority of our issued U.S. patents are set to expire at various times
from 2020 to 2032.

Generally, for products that we believe are appropriate for patent protection, we will attempt to obtain patents in the United

States and key markets of the EU. However, depending on circumstances, we may not apply for patents in all or any of those
jurisdictions.

We manufacture, market, and sell our Periscope Dissector product pursuant to a license agreement with a third-party, which
requires us to pay a royalty, determined as a percentage of our net sales for the underlying product. If we fail to make the required
payments or otherwise fail to observe the terms of the license agreement, we may lose our ability to sell these products. We
previously had similar license arrangements for our LifeSpan and TRIVEX product lines but these arrangements ended during
2019.

We believe that our brands have been an important factor in our success. We rely on common law and registered
trademarks to protect our brands. Some of our registered trademarks are LeMaitre, XenoSure, Pruitt, VascuTape, Glow ‘N Tell
and RestoreFlow, each of which is registered in the United States, the EU, or both, and in certain cases in other foreign countries.

We rely on trade secret protection for certain unpatented aspects of other proprietary technology. Most of our products are
not protected by patents. Patent protection is not available where we acquire a commercialized product that is not patented, such
as the embolectomy catheters we acquired from Applied Medical in September 2018 and the product lines we acquired from
Becton, Dickinson in October 2018. In the past, other companies have independently developed or otherwise acquired comparable
or substantially equivalent proprietary information and techniques, and there can be no assurance that others will not do so in the
future or otherwise gain access to our proprietary technology or disclose such technology, or that we can meaningfully protect our
trade secrets. We have a policy of requiring employees and consultants to execute confidentiality agreements upon the
commencement of an employment or consulting relationship with us. Our confidentiality agreements also require our employees
to assign to us all rights to any inventions made or conceived during their employment with us. We also generally require our
consultants to assign to us any inventions made during the course of their engagement by us. There can be no assurance, however,
that these agreements will provide meaningful protection or adequate remedies for us in the event of unauthorized use, transfer, or
disclosure of confidential information or inventions.

The laws of foreign countries generally do not protect our proprietary rights to the same extent as do the laws of the United

States and we may experience more difficulty enforcing our proprietary rights in certain foreign jurisdictions.

See “Item 1A. Risk Factors” for a description of certain risks associated with our intellectual property.

Government Regulation

Medical devices and human tissues are subject to regulation by the FDA, and, in some instances, other federal and state

authorities and foreign governments.

United States Regulation of Medical Devices

Most of our products are medical devices subject to extensive regulation by the FDA under 21 United States Code Chapter

9, the Federal Food, Drug, and Cosmetic Act (the FDCA). FDA regulations govern, among other things, product development,
testing, manufacturing, packaging, labeling, storage, clearance or approval, advertising and promotion, sales and distribution, and
import and export.

Premarket Pathways

Most medical devices must receive either 510(k) clearance or Premarket Application approval (PMA approval) from the

FDA prior to commercial distribution. Devices deemed to pose relatively less risk are placed in either class I or II, which requires
the manufacturer to submit a premarket notification requesting permission for commercial distribution; this is known as 510(k)
clearance. Some low-risk devices are exempted from this requirement. Class II devices may be subject to special controls, such as
performance standards and FDA guidelines that are not applied to class I devices. Devices deemed by the FDA to pose the
greatest risk, such as life-sustaining, life-supporting, or implantable devices, or devices deemed not substantially equivalent to a
previously 510(k)-cleared device or to a pre-amendment class III device (i.e., one in commercial distribution before May 28,
1976) for which PMA applications have not been called, are placed in class III, which generally requires PMA approval. In all
cases, a user fee is required for 510(k) submissions and PMA applications, which in the case of PMA applications can be very
costly.

510(k) Clearance. To obtain 510(k) clearance, a manufacturer must submit a premarket notification demonstrating that the

proposed device is substantially equivalent in intended use and performance to a “predicate device” (i.e., a previously 510(k)-
cleared class I or class II device or a pre-amendment class III device for which the FDA has not yet called for PMA applications).
The FDA’s 510(k) clearance pathway usually takes from three to twelve months, but it can take longer. In reviewing a premarket
notification, the FDA may request additional information, including clinical data. Nearly all of our devices currently sold in the
United States are marketed pursuant to the 510(k) clearance, with the exception of our ProCol biologic vascular graft.

After a device receives 510(k) clearance, any modification that could significantly affect its safety or effectiveness, or that

would constitute a major change as specified by FDA guidelines, requires a new 510(k) clearance. The FDA requires each
manufacturer to make this determination in the first instance, but the FDA can review any such decision. If the FDA disagrees
with a manufacturer’s decision not to seek a new 510(k) clearance, the agency may retroactively require the manufacturer to seek
510(k) clearance. The FDA also can require the manufacturer to cease marketing and/or recall the modified device until 510(k)
clearance or PMA approval is obtained. Also, the manufacturer may be subject to significant regulatory fines or penalties.

PMA Approval. The PMA approval pathway requires proof of the safety and effectiveness of the proposed device to the
FDA’s satisfaction, making this pathway much more costly, lengthy, and uncertain. A PMA application must provide extensive
preclinical and clinical trial data, as well as detailed information about the device and its components regarding, among other
things, device design, manufacturing, and labeling. As part of the PMA review, the FDA will typically inspect the manufacturer’s
facilities for compliance with the Quality System Regulation (QSR) which imposes elaborate testing, control, documentation, and
other quality assurance procedures on the manufacturing process.

If the FDA approves a PMA, the approved indications or claims may be more limited than those originally sought. The
PMA can include post-approval conditions that the FDA believes to be necessary to ensure the safety and effectiveness of the
device including, among other things, restrictions on labeling, promotion, sale, and distribution. Failure to comply with the
conditions of approval can result in material adverse enforcement action, including the loss or withdrawal of the approval. Even
after approval of a PMA, a new PMA or PMA supplement is required if the device or its labeling or manufacturing process are
modified. Supplements to a PMA often require the submission of the same type of information required for an original PMA,
except that the supplement is generally limited to that information needed to support the proposed change from the product
covered by the original PMA.

Clinical Trials. A clinical trial is typically required to support a PMA application and is sometimes required to support

510(k) clearance. In some cases, one or more smaller feasibility Investigational Device Exemption (IDE) studies may precede a
pivotal IDE clinical trial intended to comprehensively demonstrate the safety and effectiveness of the investigational device. All
clinical studies of investigational devices must be conducted in compliance with the FDA’s extensive requirements. If an
investigational device could pose a significant risk to patients (as defined in the regulations), the FDA, prior to initiation of
clinical use, must approve an IDE application showing that it is safe to test the device in humans and that the testing protocol is
scientifically sound. A non-significant risk device does not require submission to the FDA of an IDE application. Both significant
risk and non-significant risk investigational devices require approval from institutional review boards (IRBs) at the study centers
where the device will be used. The FDA and the IRB at each institution at which a clinical trial is being performed may suspend a
clinical trial at any time for various reasons, including a belief that the subjects are being exposed to an unacceptable health risk.
During a study, the sponsor must comply with the FDA’s IDE requirements for investigator selection, trial monitoring, reporting,
record keeping, and prohibitions on the promotion of investigational devices. The investigators must obtain patient informed
consent, rigorously follow the investigational plan and study protocol, control the disposition of investigational devices, and
comply with all reporting and record-keeping requirements. Required records and reports are subject to inspection by the FDA.
Prior to granting PMA approval, the FDA typically inspects the records relating to the conduct of the study and the clinical data
supporting the PMA application for compliance with IDE requirements.

Although the QSR does not fully apply to investigational devices, the requirement for controls on design and development
does apply. The sponsor also must manufacture the investigational device in conformity with the quality controls described in the
IDE application and any conditions of IDE approval that FDA may impose with respect to manufacturing.

Historically, our products have been introduced into the market using the 510(k) clearance procedure, and we have not used

the more burdensome PMA process for any of the products that we currently market or sell in the United States, other than our
ProCol vascular graft, which had PMA approval at the time we acquired the device. If we were to seek Unites States approval for
our Omniflow II biosynthetic vascular graft, for example, we would be required to follow the PMA process.

Postmarket Regulation

After a device is placed on the market, regardless of the classification or premarket pathway, significant regulatory

requirements apply. These include:

•

annual manufacturing establishment registration and device listing with the FDA;

the QSR, which requires finished device manufacturers, including third-party or contract manufacturers, to follow
stringent design, testing, control, documentation, and other quality assurance procedures in all aspects of
manufacturing;

labeling regulations and FDA prohibitions against the promotion of products for uncleared, unapproved, or off-label
uses and other requirements related to promotional activities;

medical device reporting regulations, which require that manufacturers report to the FDA if their device may have
caused or contributed to a death or serious injury or malfunctioned in a way that would likely cause or contribute to
a death or serious injury if the malfunction were to recur; and

corrections and removal reporting regulations, which require that manufacturers report to the FDA any field
corrections and product recalls or removals if undertaken to reduce a risk to health posed by the device or to remedy
a violation of the FDCA that may present a risk to health.

We are subject to inspection and marketing surveillance by the FDA to determine our compliance with regulatory
requirements. The most recent FDA inspection of our Burlington facility was in August 2017, and our MDSAP was in March
2019, the results of which were satisfactory. Non-compliance with applicable FDA requirements can result in, among other things,
public warning letters, fines, injunctions, civil penalties, recall or seizure of products, total or partial suspension of production,
failure of the FDA to grant marketing approvals, withdrawal of marketing approvals, a recommendation by the FDA to disallow
us to enter into government contracts, and criminal prosecutions. The FDA also has the authority to request repair, replacement, or
refund of the cost of any device manufactured or distributed by us. In the event that one of our suppliers fails to maintain
compliance with our quality requirements, we may have to qualify a new supplier and could experience manufacturing delays as a
result.

Non-U.S. sales of medical devices manufactured in the United States that are not approved or cleared by the FDA for use in

the United States, or are banned or deviate from lawful performance standards, are subject to FDA export requirements. Before
exporting such products to a foreign country, we must first comply with the FDA’s regulatory procedures for exporting
unapproved devices.

United States Regulation of Human Tissue

FDA

Our allografts are subject to extensive regulation by the FDA under Title 21 of the Code of Federal Regulations, Part 1271

(Human Cells, Tissues, and Cellular and Tissue-Based Products). These regulations were promulgated under Section 361 of the
Public Health Service Act, which authorized the FDA to issue regulations to prevent the spread of communicable disease. Under
these regulations, the FDA requires registration of establishments that process human cells, tissues, and cellular and tissue-based
products. These FDA regulations also establish donor-eligibility criteria, current good tissue practice and other procedures to
prevent the introduction, transmission, and spread of communicable diseases by such products, including through donor screening
and testing. Our Fox River Grove, Illinois facility and our Burlington, Massachusetts facility are both registered with the FDA’s
Center for Biologics Evaluation and Research as required by the regulations. The regulations also provide for the inspection of
tissue establishments by the FDA. The FDA most recently inspected our Fox River Grove, Illinois facility in January 2018 and the
results of that inspection were satisfactory. In the event of non-compliance with these regulations, the FDA may issue a warning
letter, order the recall and/or destruction of tissues and/or order the suspension or cessation of processing and preservation of new
tissues.

AATB

We voluntarily comply with the standards of the tissue bank industry’s accreditation organization, the American
Association of Tissue Banks (the AATB). The AATB has established standards for tissue banking and administers an
accreditation program. Compliance with the AATB’s standards are a predicate to accreditation, which must be renewed every
three years. Our Fox River Grove, Illinois facility has been accredited by the AATB for the processing, storage and distribution of
cardiac and vascular tissue for transplantation through May 13, 2021. Our Burlington, Massachusetts facility is also accredited for
the storage and distribution of tissue. The AATB is entitled to inspect accredited members at any time. The AATB most recently
inspected our Fox River Grove, Illinois facility in January 2018, and the results were satisfactory.

NOTA

Under the National Organ Transplant Act, it is unlawful for any person or entity to knowingly acquire, receive, or otherwise

transfer any human organ for valuable consideration for use in human transplantation if the transfer affects interstate commerce.
However, “valuable consideration” excludes the reasonable payments associated with the removal, transportation, implantation,
processing, preservation, quality control, and storage of a human organ. We believe the compensation we receive for the
processing and cryopreservation services we provide with respect to our allografts falls within this statutory exception.

State Regulation

Certain states regulate the processing, storage and distribution of human tissue. We are licensed or registered, as applicable,
with California, Delaware, Florida, Illinois, Maryland, New York and Oregon. The regulatory agencies of these states may inspect
our Fox River Grove, Illinois facility from time to time to monitor compliance with applicable state regulations.

Other U.S. Regulations

We, and our products and services, are also subject to a variety of state and local laws in those jurisdictions where our
products and services are or will be marketed or distributed, and federal, state, and local laws relating to matters such as safe
working conditions, manufacturing practices, environmental protection, fire hazard control, and disposal of hazardous or
potentially hazardous substances. We are subject to various federal and state laws governing our relationships with the physicians
and others who purchase or make referrals for our products. For instance, federal law prohibits payments of any form that are
intended to induce a referral for any item payable under Medicare, Medicaid, or any other federal healthcare program. Many states
have similar laws. There can be no assurance that we will not be required to incur significant costs to comply with such laws and
regulations now or in the future or that such laws or regulations will not have a material adverse effect upon our ability to do
business.

We are subject to federal, state, and local laws, rules, regulations, and policies governing the use, generation, manufacture,
storage, air emission, effluent discharge, handling, and disposal of certain hazardous and potentially hazardous substances used in
connection with our operations. Although we believe that we have complied with these laws and regulations in all material
respects and to date have not been required to take any action to correct any noncompliance, there can be no assurance that we
will not be required to incur significant costs to comply with environmental regulations in the future.

Non-U.S. Regulation of Medical Devices

Sales of medical devices are subject to regulatory requirements in many countries. The regulatory review process may vary

greatly from country to country. The EU has adopted numerous directives and standards relating to medical devices regulating
their design, manufacture, clinical trials, labeling, and adverse event reporting, including the Medical Devices Directive
(93/42/EEC) (the MDD), which is applicable to our products. Devices that comply with the requirements of the MDD are entitled
to bear a CE mark, indicating that the device conforms with the essential requirements of the applicable directive and can be
commercially distributed in countries that are members of the EU, as well as Iceland, Lichtenstein, Norway, Turkey and
Switzerland. Each member state of the EU has implemented the directives into its respective national law and has each established
a “Competent Authority” to apply the directive in its territory.

The MDD defines a classification system placing devices into Class I, IIa, IIb, or III, depending on the risks and
characteristics of the medical device. The MDD also defines the essential requirements that devices must meet before being
placed on the market, establishes assessment procedures for approving a device for marketing, and creates mechanisms for
national authorities to manage implementation or to intervene when public health requires. Essential requirements include
manufacturing, design, performance, labeling, and safety requirements, and may include providing certain clinical data. These
requirements vary based on the type of the device and other related factors.

A manufacturer of low-risk devices typically may demonstrate conformity to the essential requirements based on a self-

declaration. The European Standardization Committees have adopted numerous harmonized standards for specific types of
medical devices. Compliance with relevant standards establishes a presumption of conformity with the essential requirements.
Manufacturers of higher-risk devices generally must use a “Notified Body”—an appointed independent third party to assess
conformity. This third-party assessment may consist of an audit of the manufacturer’s quality system and specific testing of the
manufacturer’s devices. An assessment by a Notified Body in one country within the EU is generally required in order for a
manufacturer to commercially distribute the product throughout the EU. Most of our devices are considered higher-risk devices
that require Notified Body assessment.

The European medical device laws also address the advertising and promotion of medical devices, clinical investigations,
and requirements for handling adverse events. Post-market surveillance of medical devices in the EU is generally conducted on a
country-by-country basis; however, the MDD sets forth certain specific requirements for reporting adverse events. The Medical
Device Vigilance system is the mechanism by which adverse event reporting is managed and monitored in the EU.

Our products are regulated in the EU under the MDD. In order to market our medical devices in the EU, we are required to

obtain CE mark certifications, which denote conformity to the essential requirements of the MDD. We have received CE mark
certifications to sell nearly all of our products, though currently there is a lapse in our CE mark certifications for some of our
products due to one of our Notified Bodies abandoning all services related to the MDD. On June 13, 2019, the Notified Body that
issued the majority of our CE mark certifications, Lloyd's Register Quality Assurance or LRQA, notified its clients that it would
cease providing all Notified Body services relating to the MDD to all clients, including us, as of September 12, 2019, which date
was subsequently extended to September 30, 2019. As a result, all LRQA-issued CE mark certifications, unless earlier transferred
to a new Notified Body, would lapse as of such date. Prior to receipt of such notice, we had begun transitioning our CE mark
certifications to a new Notified Body, TUV SUD. However, TUV SUD was unable to complete all work necessary to reissue our
CE mark certifications by September 30, 2019. Under the MDD, only product placed on the European market at our European
subsidiary prior to September 30, 2019 is eligible for sale to EU countries. As a result, prior to September 30, 2019, we
manufactured and shipped inventory in amounts that for most products we believe would be sufficient to supply our EU customers
while we await reissuance of the CE mark certifications by TUV SUD. CE mark certifications were reissued in February 2020 for
many of our products. For some products for which CE marks have not yet been reissued, we expect to continue selling product
from our inventory reserves already placed on the market in the EU prior to September 30, 2019. However, we do not expect
reissuance of our CE mark certifications 1) for XenoSure or AlboGraft until Q2 2020, 2) for Anastoclip AC closure systems,
Anastoclip GC closure systems, Flexcel carotid shunts, and LifeSpan ePTFE vascular grafts until Q4 2020 and 3) for AlboSure
vascular patches until Q4 2021. We expect that the inventory of such products held by our European subsidiary will start to go
into backorder in Q1 2020.

The United Kingdom (U.K.) left the EU on January 31, 2020, which is commonly referred to as “Brexit”. Pursuant to the

formal withdrawal arrangements agreed between the U.K. and the EU, the U.K. will be subject to a transition period until
December 31, 2020. During this time, we must register and fulfill new regulatory requirements for continued sales of products in
the U.K. beginning on January 1, 2021. If our efforts to obtain new regulatory approval in the U.K. is materially delayed or
denied, we may be required to incur additional expenses in order to develop, manufacture and commercialize our product
candidates in the EU and our future sales may be impacted. We opened our Hereford, England office in 2019 largely in response
to Brexit.

In the event that any of our products proves to be defective, we can voluntarily recall, or the FDA or foreign equivalent

could require us to implement a recall of, any of our products and, 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 reputation and 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.

In some cases, we rely on our non-U.S. distributors or third party agents to obtain premarket approvals, complete product

registrations, comply with clinical trial requirements, and complete those steps that are customarily taken in the applicable
jurisdictions to comply with governmental and quasi-governmental regulation. In the future, we expect to continue to rely on
distributors and agents in this manner where appropriate.

Canada regulates the import and sale of medical devices through Health Canada (HC). HC classifies medical devices into
four classifications, with Class I being the lowest risk and Class IV being the highest. Class I and II devices are often cleared for
sale after they are CE marked or listed on the company’s ISO certification and filed via fax-back applications. Higher
classification risk devices (Class III and IV) require filing dossiers that resemble US 510(k) applications. These applications can
range in cost and typically take longer for approval. As a holder of Canadian device licenses, we are subject to inspection by HC
at our Canadian office. Our Canadian office was most recently inspected in August 2017, the results of which were satisfactory.

In Japan, the Ministry of Health, Labor and Welfare (MHLW) regulates medical devices through the Pharmaceutical
Affairs Law, which was reformed effective April 1, 2005. The revisions to Japan’s regulations have resulted in longer lead times
for product registration. As a holder of Japanese device licenses, we are also subject to inspection by several Japanese authorities
including Japan’s Pharmaceutical and Medical Device Agency (PMDA), Tokyo Metropolitan Government (TMG), and third
parties such as Japan’s Electrical Safety & Environmental Technologies Laboratories (JET). Our Japanese office was most
recently inspected by JET in February 2019, the results of which were satisfactory.

Australia regulates the import and sale of medical devices through the Therapeutic Goods Administration (TGA). The TGA

has built its regulatory framework around requirements similar to those issued in Europe. As such, many medical devices (those
with a lower risk profile) may gain relatively fast marketing clearance using their existing EU-issued CE marking. Higher risk
devices (those in EU/Aus Class III) must go through a full design review which can be costly and take longer to complete. Issued
licenses for medical devices do not require renewal, but do require an annual fee to remain active in the TGA registry of devices.
As a holder of Australian device licenses, we are also subject to inspection by TGA in both Australia and the United States. Our
North Melbourne facility was most recently inspected by TGA in December 2018, and our Burlington facility was inspected in
March 2019, the results of which were satisfactory. Australia requires all foreign manufacturers to have an in country ‘sponsor’
who must have a licensed business inside of Australia. Our licenses are managed on our behalf by our sponsor, Emergo Group.

In China, the National Medical Products Administration (NMPA) regulates and must approve all medical devices to be
marketed and sold in China. China has a three-class risk classification system, with Class I being the lowest risk and Class III
being the highest risk. Home country approval, such as 510(k) or PMA clearance, is required as a prerequisite to any application.
Additionally, the NMPA often tests finished devices at its own testing laboratory to confirm each device’s specifications. The
approval process is typically lengthy and usually requires clinical trials. NMPA licenses are valid for five years from date of
issuance and require renewal prior to expiration. As a holder of Chinese device licenses, we are subject to inspection by NMPA in
both China and the United States. Our China facility was most recently inspected by NMPA in August 2018, the results of which
were satisfactory. The NMPA requires all companies located outside of China to appoint a legal entity who maintains a registered
business inside of China as the license holder. After the formation of our Chinese subsidiary in 2015, we transferred our licenses
from our third-party license holders to our subsidiary.

There can be no assurance that new laws or regulations or new interpretations of laws and regulations regarding the release

or sale of medical devices will not delay or prevent sale of our current or future products.

Third-Party Reimbursement

United States

Healthcare providers that purchase medical devices generally rely on third-party payors, including the Medicare and
Medicaid programs and private payors (such as indemnity insurers, employer group health insurance programs, and managed care
plans) to reimburse all or part of the cost of those products. As a result, demand for our products is and will continue to be
dependent in part on the coverage and reimbursement policies of these payors. The manner in which reimbursement is sought and
obtained varies based upon the type of payor involved and the setting in which the product is furnished and utilized. For example,
Medicare reimbursement policies favor outpatient treatment. Furthermore, payments from Medicare, Medicaid, and other third-
party payors are subject to legislative and regulatory changes and are susceptible to budgetary pressures.

In the United States, third-party payors generally pay healthcare providers directly for the procedures they perform and in

certain instances for the products they use. Our sales volumes depend on the extent to which third-party payors cover our products
and the procedures in which they are used. In general, a third-party payor only covers a medical product or procedure when the
plan administrator is satisfied that the product or procedure is medically necessary because it improves health outcomes, including
quality of life or functional ability, in a safe and cost-effective manner. Even if a device has received clearance or approval for
marketing by the FDA, there is no assurance that third-party payors will cover the cost of the device and related procedures in
which the device is used.

In many instances, third-party payors cover the procedures performed using our products using price fee schedules that do
not vary reimbursement to reflect the cost of the products and equipment used in performing those procedures. In other instances,
payment or reimbursement is separately available for the products and equipment used, in addition to payment or reimbursement
for the procedure itself. Even if coverage is available, third-party payors may place restrictions on the circumstances in which they
provide coverage or may offer reimbursement that is not sufficient to cover the cost of our products. Many of the products that
compete with ours are less expensive. Therefore, although coverage may be available for our products and the related procedures,
the levels of approved coverage may not be sufficient to justify using our products instead of those of competitors.

In addition, many third-party payors are moving to managed care systems in which providers contract to provide
comprehensive healthcare for a fixed cost per person rather than the traditional fee for service model. Managed care providers
often attempt to control the cost of healthcare by authorizing fewer elective surgical procedures. Under current prospective
payment systems, such as the diagnosis-related group system and the hospital out-patient prospective payment system, both of
which are used by Medicare and in many managed care systems used by private third party payors, the reimbursement for our
products will be incorporated into the overall reimbursement of a procedure, and there will be no separate reimbursement for our
products. As a result, we cannot be certain that hospital administrators and physicians will purchase our products.

If hospitals and physicians cannot obtain adequate reimbursement for our products or the procedures in which they are

used, our business, financial condition, and results of operations could suffer a material adverse impact.

Non-U.S.

Our success in non-U.S. markets will depend largely upon the availability of reimbursement from the third-party payors

through which healthcare providers are paid in those markets. Reimbursement and healthcare payment systems in non-U.S.
markets vary significantly by country. The main types of healthcare payment systems are government sponsored healthcare and
private insurance. As in the United States, reimbursement is subject to legislative and regulatory changes and is susceptible to
budgetary pressures. Reimbursement approval must be obtained individually in each country in which our products are marketed.
Outside the United States, we may pursue reimbursement approval in those countries in which we sell directly to the hospital. In
other markets, we generally rely on the distributors who sell our products to obtain reimbursement approval in those countries in
which they will sell our products. There can be no assurance that reimbursement approval will be received.

Fraud and Abuse Laws

We may directly or indirectly be subject to various federal and state laws pertaining to healthcare fraud and abuse,
including anti-kickback laws. In particular, the federal healthcare program Anti-Kickback Statute prohibits persons from
knowingly and willfully soliciting, offering, receiving, or providing remuneration, directly or indirectly, in exchange for or to
induce either the referral of an individual, or the furnishing, arranging for, or recommending a good or service for which payment
may be made in whole or part under federal healthcare programs, such as the Medicare and Medicaid programs. Penalties for
violations include criminal penalties and civil sanctions such as fines, imprisonment, and possible exclusion from Medicare,
Medicaid, and other federal healthcare programs. The Anti-Kickback Statute is broad and prohibits many arrangements and
practices that are lawful in businesses outside of the healthcare industry. In implementing the statute, the Office of Inspector
General, or OIG, has issued a series of regulations, known as the “safe harbors.” These safe harbors set forth provisions that, if all
their applicable requirements are met, will assure healthcare providers and other parties that they will not be prosecuted under the
Anti-Kickback Statute. The failure of a transaction or arrangement to fit precisely within one or more safe harbors does not
necessarily mean that it is illegal or that prosecution will be pursued. However, conduct and business arrangements that do not
fully satisfy each applicable element of a safe harbor may result in increased scrutiny by government enforcement authorities,
such as the OIG.

Patient Protection and Affordable Care Act

In March 2010, significant reforms to the U.S. healthcare system were adopted in the form of the Patient Protection and
Affordable Care Act (the PPACA). Under the PPACA we are subject to the Physician Payments Sunshine Act, which was enacted
as part of the PPACA and requires detailed public disclosure of certain payments and “transfers of value” from us to healthcare
professionals, such as the payment of royalties, compensation for services provided such as training, consulting, and
reimbursement for travel and meal expenses. Certain states also require us to disclose similar information or even prohibit some
forms of these payments.

Employees

We had 479 employees, including 454 full-time employees, at December 31, 2019.

Customers

Our sales are not dependent on any single customer or distributor, and we continue to expand our distribution channel

worldwide through direct sales representatives and independent distributors. No single customer accounted for more than 2% of
our net sales in 2019.

Corporate Information

We were incorporated in Massachusetts on November 28, 1983, as Vascutech, Inc. On June 16, 1998, we were
reincorporated in Delaware, and on April 6, 2001, we changed our name to LeMaitre Vascular, Inc. On October 19, 2006, we
executed our initial public offering, and our common stock trades on The Nasdaq Global Market under the symbol “LMAT.” Our
principal executive offices are located at 63 Second Avenue, Burlington, Massachusetts 01803, and our telephone number is
(781) 221-2266. Our website address is www.lemaitre.com.

Where You Can Find More Information

Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to

those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 are available through the
investor relations portion of our website (www.lemaitre.com) free of charge as soon as reasonably practicable after we
electronically file such material with, or furnish it to, the Securities and Exchange Commission, (SEC). The address of the SEC’s
website is www.sec.gov. Information on our investor relations page and on our website is not part of this Annual Report on Form
10-K or any of our other securities filings unless specifically incorporated herein or therein by reference, and you should not
consider any information contained in, or that can be accessed through, our website as part of this Annual Report on Form 10-K.
The SEC maintains an internet site that contains reports, proxy and information statements and other information. All statements
made in any of our securities filings, including all forward-looking statements or information, are made as of the date of the
document in which the statement is included, and we do not assume or undertake any obligation to update any of those statements
or documents unless we are required to do so by law. In addition, our Corporate Governance Guidelines, Code of Business
Conduct and Ethics and Charters of our Audit, Compensation and Nominating and Corporate Governance Committees are
available on our website and are available in print to any stockholder who requests such information.

Item 1A.

Risk Factors

Investing in our securities involves a high degree of risk. You should consider carefully the following information about the
risks described below, together with the other information contained in this Annual Report on Form 10-K and in our other public
filings in evaluating our business. The following important factors, among others, could cause our actual operating results to
differ materially from those indicated or suggested by forward-looking statements made in this Annual Report on Form 10-K or
presented elsewhere by management from time to time. Investors should carefully consider the risks described below before
making an investment decision. The risks described below are not the only ones we face. Additional risks not presently known to
us or that we currently believe are not material may also significantly impair our business operations. Our business could be
harmed by any of these risks. The trading price of our common stock could decline due to any of these risks, and investors may
lose all or part of their investment.

Risks Related to Our Business

If we do not comply with foreign regulatory requirements to market our products outside the United States, our business will
be harmed.

Sales of medical devices outside the United States are subject to international regulatory requirements that vary from

country to country. These requirements and the amount of time required for approval may differ from our experiences with the
FDA in the United States. In some cases, we rely on our international distributors to obtain premarket approvals, complete product
registrations, comply with clinical trial requirements, and complete those steps that are customarily taken in the applicable
jurisdictions to comply with governmental and quasi-governmental regulation. In the future, we expect to continue to rely on
distributors in this manner in those countries where we continue to market and sell our products through them. Failure to satisfy
these foreign regulations would impact our ability to sell our products in these countries and could cause our business to suffer.
There can be no assurance that we will be able to obtain or maintain the required regulatory approvals in these countries.

Our products are regulated in the European Union (EU) under the European Medical Devices Directive (93/42/EC as

amended by 2007/47/EC) (MDD). In order to market our medical devices in the EU, we are required to obtain CE mark
certifications, which denote conformity to the essential requirements of the MDD, and manufacturers of higher-risk devices
generally must use a “Notified Body”—an appointed independent third party to assess conformity. We have received CE mark
certifications to sell nearly all of our products, though currently there is a lapse in our CE mark certifications for some of our
products due to one of our Notified Bodies abandoning all services related to the MDD. On June 13, 2019, the Notified Body that
issued the majority of our CE mark certifications, Lloyd's Register Quality Assurance or LRQA, notified its clients that it would
cease providing all Notified Body services relating to the MDD to all clients, including us, as of September 12, 2019, which date
was subsequently extended to September 30, 2019. As a result, all LRQA-issued CE mark certifications, unless earlier transferred
to a new Notified Body, would lapse as of such date. Prior to receipt of such notice, we had begun transitioning our CE mark
certifications to a new Notified Body, TUV SUD. However, TUV SUD was unable to complete all work necessary to reissue our
CE mark certifications by September 30, 2019. Under the MDD, only product placed on the European market at our European
subsidiary prior to September 30, 2019 is eligible for sale to EU countries. As a result, prior to September 30, 2019, we
manufactured and shipped inventory in amounts that for most products we believe would be sufficient to supply our EU customers
while we await reissuance of the CE mark certifications by TUV SUD. CE mark certifications were reissued in February 2020 for
many of our products. For some products for which CE marks have not yet been reissued, we expect to continue selling product
from our inventory reserves already placed on the market in the EU prior to September 30, 2019. However, we do not expect
reissuance of our CE mark certifications 1) for XenoSure or AlboGraft until Q2 2020, 2) for Anastoclip AC closure systems,
Anastoclip GC closure systems, Flexcel carotid shunts and LifeSpan ePTFE vascular grafts until Q4 2020 and 3) for AlboSure
vascular patches until Q4 2021. We have started to experience backorders related to the inventory of such products held by our
European subsidiary. If the reissuance of our CE marks for any of our products is materially delayed or withheld, our revenues
could be further impacted due to our saleable inventory reserves becoming depleted and our business could be harmed.

Additionally, the CE mark for our Omniflow II graft will lapse due to the delays in the ability of our Notified Body for this

product, TUV Rheinland, to review our manufacturing site change application from North Melbourne, Australia to Burlington,
Massachusetts. This delay will also subject Omniflow II to an MDR application process earlier than we expected. This will result
in a lapse in the CE mark certification for Omniflow II from June 2020 until we receive the CE mark certification of Omniflow II,
which we expect to occur by Q3 2021. We expect that the inventory of the majority of such products held by our European
subsidiary will only be sufficient to supply our customers until Q3 2021, based on historical sales, and as a result, we may go into
backorder for such products until the CE mark is issued. If the CE mark certification for Omniflow II is materially delayed or
withheld, our European revenues could be impacted due to our saleable inventory reserves becoming depleted and our business
could be harmed.

In April 2017, the EU adopted new regulations for medical devices (MDR), which replace the MDD and apply after a three
year transition period. Our products will be subject to the MDR, which require all of our products, regardless of classification, to
obtain a new CE mark in accordance with the new, more stringent standards under the MDR. As a condition to CE mark approval,
clinical evidence from clinical investigations will be required for Class III and implantable devices. As our Notified Bodies start
to transition from MDD to MDR, they have begun to impose more rigorous requirements on us in order to obtain approval to
renew the CE marks on certain of our products. For example, we have been informed by BSI, our Notified Body for the product
lines manufactured in our Saint-Etienne, France facility, that they require more clinical data for three of the four product lines for
the continuance of the CE mark certifications and the upcoming MDR certifications for such devices. If we fail to obtain sufficient
clinical data for these products, our current CE marks may be suspended or not issued in a timely manner or at all, and future sales
of those products could be adversely impacted. Additionally, if we fail to obtain new CE marks on these products or our other
products under the MDR in a timely manner, or at all, future sales of our products in the EU could be adversely impacted.

There can be no assurance that we will be able to obtain or maintain CE marks for our existing products, and obtaining CE

marks may involve a significant amount of time and expense, stringent clinical and preclinical testing, or modification of our
products and could result in limitations being placed on the use of our products in order to obtain approval. If we fail to obtain
new CE marks on our products in a timely manner, or at all, future sales of our products could be adversely impacted.

Maintaining a CE mark is contingent upon our continued compliance with applicable European medical device

requirements, including limitations on advertising and promotion of medical devices and requirements governing the handling of
adverse events. As illuminated above, there can be no assurance that we will be successful in maintaining the CE mark for any of
our current products. In particular, adverse event reporting requirements in the EU mandate that we report incidents which led or
could have led to death or serious deterioration in health. Under certain circumstances, we could be required to or could
voluntarily initiate a recall or removal of our product from the market in order to address product deficiencies or malfunctions.
Any recall of our products may harm our reputation with customers and divert managerial and financial resources.

Failure to receive or maintain approval would prohibit us from selling these products in member countries of the EU, and
would require significant delays in obtaining individual country approvals. If we do not receive or maintain these approvals, our
business could be harmed.

Our facilities are subject to periodic inspection by numerous regulatory authorities, including governmental agencies and

Notified Bodies, and we must demonstrate compliance with their applicable medical devices regulations. Our most recent
inspections were as follows:

Facility
Burlington
Vaughan
North Melbourne
North Melbourne
Fox River Grove
Fox River Grove
Burlington
North Melbourne
Shanghai

Agency
U.S. FDA
Health Canada
Therapeutic Goods Administration (TGA)
Brazil (ANVISA)
AATB
U.S. FDA
Notified Body (LRQA)
Notified Body (TUV Rheinland)
China FDA (NMPA)

Burlington

Notified Body (LRQA)

Burlington
North Melbourne
North Melbourne
Burlington
Burlington
Saint-Etienne
Tokyo
Burlington
Saint-Etienne
Burlington

Notified Body (LRQA)
Notified Body (TUV Rheinland)
Therapeutic Goods Administration (TGA)
Notified Body (LRQA)
Korean FDA
Notified Body (BSI)
Notified Body (JET)
Therapeutic Goods Administration (TGA)
Notified Body (BSI)
Notified Body (LRQA)

North Melbourne
Saint-Etienne

Notified Body (TUV Rheinland)
Notified Body (BSI)

Jurisdiction
United States
Canada
Australia
Brazil
Worldwide
United States
Europe
Europe
China
United States Medical
Device Single Audit Program
Europe
Europe
Australia
Europe
Korea
Europe
Japan
Australia
Europe
United States Medical Device
Single Audit Program
Europe
Europe

Date
August 2017
August 2017
September 2017
October 2017
January 2018
January 2018
January 2018
January 2018
August 2018

October 2018

November 2018
November 2018
December 2018
December 2018
January 2019
January 2019
February 2019
March 2019
March 2019
March 2019

June 2019
October 2019

Any failure by us to comply with regulatory requirements in this regard may entail our taking corrective action, such as
modification of our policies and procedures. In addition, we may be required to cease all or part of our operations for some period
of time until we can demonstrate that appropriate steps have been taken. There can be no assurance that we will be found in
compliance with such standards in future audits.

We also pursue registrations in other jurisdictions in which we sell our devices directly, such as Japan and China. In 2015,

the China Food and Drug Administration (NMPA) significantly increased the application fees for product registrations and
imposed additional requirements for obtaining product approval, which includes requirements for conducting clinical trials to
support the registration application process on newly introduced products in China. As a result, we may not seek registration for
certain products where the cost is not justified. Any delay in product registrations could have a negative impact on our results of
operations.

We may experience significant fluctuations in our quarterly and annual results.

Fluctuations in our quarterly and annual financial results have resulted and will continue to result from numerous factors,

including:

•

changes in demand for the products and services we sell;

the acceleration or deceleration of growth rates of our products, particularly in the case of biologic vascular patches
whose growth rate has declined over recent periods;

increased product and price competition, due to market conditions, the regulatory landscape or other factors;

changes in the mix of products and services we sell;

our pricing strategy with respect to different product lines and services;

strategic actions by us, such as acquisitions of businesses, products, or technologies;

effects of domestic and foreign economic conditions and exchange rates on our industry and/or customers;

the divestiture or discontinuation of a product line or other revenue generating activity;

the relocation and integration of manufacturing or processing operations and other strategic restructuring;

regulatory actions that may necessitate recalls of our products or warning letters that negatively affect the markets
for our products;

changes to the regulatory status of our products, including suspension or cancellation of licenses or CE marking;

changes in foreign political relations that add additional barriers to entry;

our determination whether or not to continue the payment of quarterly cash dividends, and/or the amount and
frequency at which to increase them;

costs incurred by us in connection with the termination of contractual and other relationships, including those of
distributors or agents;

our ability to collect outstanding accounts receivable in selected countries outside of the United States;

changes in tax laws in the jurisdictions in which we do business;

•

the expiration, elimination or utilization of deferred tax assets such as net operating loss carry-forwards;

market reception of our new or improved product and service offerings; and

the loss of any significant customer, especially in regard to any product or service that has a limited customer base.

These factors, some of which are not within our control, may cause the price of our common stock to fluctuate

substantially. If our quarterly operating results fail to meet or exceed the expectations of securities analysts or investors, our stock
price could drop suddenly and significantly. We believe the quarterly comparisons of our financial results are not always
meaningful and should not be relied upon as the sole indicator of our future performance.

If we are unable to expand our product and service offerings, we may not achieve our growth objectives and our results of
operations could suffer.

The treatment of peripheral vascular and cardiovascular disease includes both open vascular surgery and minimally
invasive endovascular procedures, and many of our products are used primarily or exclusively in open surgery procedures. We
market and sell our products primarily to vascular surgeons, and the majority of our marketing efforts and sales relate to products
used in open vascular surgery rather than in endovascular procedures. We estimate that in 2019, over 90% of our net sales were
from devices used primarily in open surgery.

We may not be able to compete effectively with our competitors unless we can keep pace with existing or new products,

services and technologies in the vascular device market and the minimally invasive endovascular procedure segment, in particular.
Our success in developing and commercializing new products and new versions of our existing products and services is affected
by our ability to:

•

recognize in a timely manner new market trends and customer needs;

identify products or services that address those trends or needs;

obtain regulatory clearance or approval of new products and technologies;

successfully develop cost-effective manufacturing processes for such products;

commercially introduce such products, services and technologies; and

achieve market acceptance.

If we are unable to expand our product or service offerings, we may not achieve our growth objectives and our results of

operations as well as our stock price could suffer.

We may not maintain our recent levels of profitability.

There can be no assurance we will continue to achieve net sales growth and/or profit growth in the future. If, for example,

we are unable to effectively manage our operating expenses due to, for example, additional CE mark expenses, or increased
headcount, we may need to reduce our operating expenses through cost-cutting in order to maintain or improve operating
profitability. Decreased investment levels may inhibit future growth in net sales and earnings.

Additionally, our ability to maintain and increase profitability will be influenced by many factors, including:

•

the level and timing of future sales, manufacturing costs and operating expenses;

our ability to restrain or reduce operating expenses through cost-cutting measures;

market acceptance of our new products and services;

the productivity of our direct sales force and distributors;

fluctuations in foreign currency exchange rates;

our ability to successfully build direct sales organizations in new markets;

our ability to successfully acquire and develop competitive products;

our ability to successfully integrate acquired businesses, products, services or technologies;

the impact on our business of competing products, technologies, and procedures;

•

our ability to obtain or maintain regulatory approvals for our products in new and existing markets;

the reimbursement rates for the medical procedures in which our products are used;

the cost of litigation, if any; and

changes in tax laws.

We may acquire businesses and assets in the future. We may experience difficulties in completing the integration of these
acquisitions into our business, or we may not realize the anticipated benefits of these acquisitions.

In order to expand our product offerings, we have completed 23 acquisitions, and a key part of our strategy is to acquire
additional businesses, products, or technologies in the future. Our growth strategy depends, in part, upon our ability to identify,
negotiate, complete, and integrate suitable acquisitions. If we are unable to complete acquisitions on satisfactory terms or at all,
our growth objectives and sales could be negatively affected.

Even if we complete acquisitions, we may experience:

•

difficulties in integrating any 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;

degradation in our corporate gross margin due to lower margins associated with our acquired devices;

the sudden reduction in volume or loss of orders from a key customer, particularly where the acquired company had
concentrated sales;

diversion of our management’s time and attention from other business concerns;

higher costs of integration than we anticipated;

unknown or unanticipated liabilities included as part of the acquisition;

disputes or litigation with former owners related to contingent payments, liabilities assumed or not assumed or other
matters;

challenges in complying with new regulatory requirements to which we were not previously subject;

increased regulatory scrutiny;

challenges in maintaining or obtaining regulatory approvals for acquired products;

difficulties in retaining key employees of the acquired business who are necessary to manage these acquisitions;

difficulties if the acquired company is remote or inconvenient to our Burlington, Massachusetts, headquarters, such
as the operations we acquired in 2014 in North Melbourne, Australia and in 2018 in Saint-Etienne, France;

difficulties or delays in transitioning clinical studies or unfavorable results from such clinical studies;

loss of key suppliers or issues with the ongoing supply of the acquired product from its former owners;

charges related to the acquisition of in-process research and development;

dilution as a result of equity financing required to fund acquisition costs; or

debt, as a result of debt financing required to fund acquisitions, which would be senior to our common stock, would
require interest payments to a lender, and could restrict our ability to pay dividends to our shareholders.

We could also discover deficiencies withheld from us due to fraud or otherwise not uncovered in our due diligence prior to

an acquisition, including but not limited to deficiencies in internal controls, data adequacy and integrity, product quality, and
regulatory compliance, as well as undisclosed contractual or other liabilities and product liabilities, any of which could result in us
becoming subject to penalties or other liabilities. Any of these difficulties could negatively impact our ability to realize the
intended and anticipated benefits that we currently expect from our acquisitions or from acquisitions we complete in the future,
and could harm our financial condition and results of operations.

We also acquired the processing, preservation and distribution operations of RestoreFlow allografts located in Fox Rover

Grove, Illinois. See “Our tissue processing and preservation services are subject to a variety of risks, including those related to the
procurement of human tissue and regulatory requirements” below for risks associated with our tissue processing and preservation
services.

For any of these reasons or as a result of other factors, we may not realize the anticipated benefits of our acquisitions and

our operating results may be harmed.

Our call point focus on the vascular surgeon with a product portfolio largely used in open surgical procedures may be too
narrow, which may adversely affect our future sales.

The treatment of peripheral vascular disease continues to shift from open vascular surgery to minimally invasive
endovascular procedures. We market and sell our products primarily to vascular surgeons, and the majority of our marketing
efforts and sales relate to products used in open vascular surgery rather than in endovascular procedures. We estimate that in
2019, over 90% of our net sales were from devices used in open vascular procedures.

In addition to performing traditional open surgical procedures, vascular surgeons in growing numbers also perform
minimally invasive, image-guided interventional procedures for peripheral vascular disease. However, vascular surgeons may not
adopt these procedures in the numbers we expect and instead these procedures may be largely performed by interventional
cardiologists and interventional radiologists. Many of our competitors have focused their sales efforts on these interventionalists.
If interventional cardiologists and interventional radiologists perform a greater percentage of these new procedures than we
expect, our net sales may decline.

Moreover, demographic trends and other factors, such as reimbursement rates, are also driving vascular surgeons in the

United States and potentially in other markets to increasingly specialize in certain kinds of procedures, such as the creation and
maintenance of dialysis access sites and endovascular therapies. Vascular surgeon training programs may focus on those therapies
to the exclusion of open vascular procedures. If there is a decline in vascular surgeons training in open vascular procedures in
favor of training in minimally invasive endovascular procedures, this could limit the number of vascular surgeons using our
products due to lack skills in open vascular procedures. Further, even those physicians trained in open procedures may discontinue
performing them if there is a lack of demand. If this trend continues, it could lead to the fragmentation of our customer base,
which would reduce cross-selling opportunities and the efficiency of each sales call by our sales representatives, which in turn
could negatively impact our business.

CardioCel is sold to a different call point from that of most of our product lines, and we may not be successful in selling to that
call point.

Historically, the majority of sales of CardioCel have been to pediatric cardiac surgeons, a call point that is different from

our main call point focus. We market and sell our products primarily to vascular surgeons, and the majority of our marketing
efforts and sales relate to products used in open vascular surgery. As a result, our sales representatives make sales calls
predominantly to vascular surgeons and to a lesser extent, cardiac and neuro surgeons. Our success in selling CardioCel will
depend, in part, on our sales representatives devoting a portion of their time to making sales calls to, and establishing relationships
with, pediatric cardiac surgeons. If they do not undertake these activities or are unsuccessful in doing so, then this could lead to
the loss of sales and customers of CardioCel, and our financial condition or results of operations could be harmed. Most of our
product lines are used in vascular procedures and as a result, our sales representatives can cross-sell a significant portion of our
product portfolio to vascular surgeons. Cross-selling opportunities to pediatric cardiac surgeons will be limited. Additionally, if
our sales representatives spend less time focused on sales of our other product lines to vascular surgeons, the sales of those
products could decrease, and our financial condition or results of operations could be harmed.

Our tissue processing and preservation services are subject to a variety of risks, including those related to the procurement of
human tissue and regulatory requirements.

In November 2016, we acquired the processing, preservation and distribution operations for the RestoreFlow allograft. Prior
to the acquisition, we did not provide any human tissue services. Our ability to successfully provide such services may be affected
by the following:

•

maintenance of quality standards and controls to mitigate the risk that processed tissue cannot be sterilized;

•

compliance with regulatory and legal requirements specific to human tissue, with which we were previously
unfamiliar, or changes in those requirements;

maintenance of our AATB accreditation, FDA establishment registration and state licensures;

the degree to which our tissue procurement organizations are successful in procuring the gift of tissue donation;

procurement from tissue procurement organizations of adequate amounts of human tissue of a type and quality that
meets our specifications, particularly as we may compete for these tissues with organizations who may have greater
resources than us;

processing human tissue in a cost effective manner;

controlling turnover in a workforce skilled in tissue processing and cryopreservation and any subsequent delay
necessary for the adequate training of new personnel; and

compliance of our tissue procurement organizations to current good tissue practices and our own procurement
procedures.

Our failure in any one or more of these areas could adversely impact our ability to provide processing, preservation and

distribution services related to allografts and therefore our operations.

Our dependence on sole- and limited-source suppliers could hinder our ability to deliver our products and services to our
customers on a timely basis or at all and could harm our results of operations.

We rely on sole- and limited-source suppliers for some of our important product components and certain products. For
example, our TRIVEX system and associated disposables, as well as components of our EndoRE remote endarterectomy product
line, are manufactured for us by third-party suppliers. Additionally, we rely on a sole-source supplier for the ovine material used
for our Omniflow II biosynthetic vascular graft.

With respect to our RestoreFlow allografts, we rely on tissue procurement organizations to provide donated tissue to us for
processing and cryopreservation. While we have relationships with multiple tissue procurement organizations, we cannot be sure
that the supply of suitable human tissue will be available to us at the levels we need, in which case our allografts revenues could
be adversely affected.

When we acquire a product line, we often enter into an agreement with the seller of the product line for a period of one to
three years for the supply of the acquired product until we can transition manufacturing to our facilities. Those arrangements are
always sole source supply arrangements with a supplier that has determined to divest the product it is manufacturing. As a result,
the supplier may not allocate sufficient resources to the manufacture of our product in favor of dedicating resources to its
remaining business. Additionally, there is significant risk if the supplier does not have the financial means to continue to supply
product. For example, in the case of our acquisition of the CardioCel and VascuCel biologic patches, Admedus Ltd and its
affiliates have agreed to continue to supply those products to us for up to three years. For the year ended December 31, 2018,
Admedus Ltd reported revenue from continuing operations of AU$25.6 million and a loss before income tax from continuing
operations of AU$24.7 million, and for the year ended December 31, 2019, Admedus Ltd reported revenue from continuing
operations of AU$17.1 million and a loss before income tax from continuing operations of AU$6.2 million. If Admedus fails to
meet its obligations under the supply agreement on a timely basis, or at all, then we may experience interruptions in our supply of
the acquired products or we may not receive a future supply of the acquired products until we establish our own manufacturing. If
we do not have sufficient supply of an acquired product, this could lead to loss of sales, customer dissatisfaction and damage to
our reputation, and our financial condition or results of operations could be harmed.

There are relatively few, or in some cases no, alternative, validated sources of supply for these materials and products. We

do not always have supply agreements in place with suppliers, instead placing orders on an as-needed basis. At any time, these
suppliers could discontinue or become incapable of the manufacture or supply of these materials or products on acceptable terms
or otherwise. We do not ordinarily carry a significant inventory of these materials and products. Identifying and qualifying
additional or replacement suppliers, if required, may not be accomplished quickly or at all and could involve significant additional
costs. Any supply interruption from our suppliers or failure to obtain replacement suppliers would interrupt our ability to
manufacture our products and result in production delays and increased costs, and may limit our ability to deliver products to our
customers. This could lead to loss of sales and customers, and our financial condition or results of operations could be harmed.

Any disruption in our manufacturing facilities could harm our results of operations.

Our principal worldwide executive, distribution, and manufacturing operations are located in five leased facilities located in

Burlington, Massachusetts. We also have manufacturing sites in North Melbourne, Australia and Saint-Etienne, France and a
tissue processing preservation and distribution facility in Fox River Grove, Illinois. These facilities and the equipment we use to
manufacture our products would be difficult to replace and could require substantial lead-time to repair or replace in the event of a
natural or man-made disaster. In such event, we could not shift production or processing to alternate manufacturing facilities, and
we would be forced to rely on third-party manufacturers, if available at all. Although we carry insurance for damage to our
property and the disruption of our business from casualties, such insurance may not be sufficient to cover all of our potential
losses, including potential damage to our reputation, and may not continue to be available to us on acceptable terms, or at all.

We depend on our senior management team and other key sales and technical personnel, and if we are unable to retain them
or recruit additional qualified personnel we may not be able to manage our operations and meet our strategic objectives.

We depend on the continued services of our senior management team and other key sales and technical personnel, as well
as our ability to continue to attract and retain additional highly qualified personnel. Each of our key employees may terminate his
or her employment with us at any time, and the loss of any of our senior management team or key employees could harm our
business. Because we compete for such personnel with other companies, academic institutions, government entities, and other
organizations, we may not be able to meet our future hiring needs or retain existing personnel on acceptable terms. Any loss or
interruption of the services of our key personnel could also significantly reduce our ability to effectively manage our operations
and meet our commercial or strategic objectives, because we cannot be sure that we would be able to find an appropriate
replacement on a timely basis when the need arises.

Certain of our products contain materials derived from animal sources and may become subject to additional regulation.

Our AlboGraft vascular graft, AlboSure vascular patch, Dialine II vascular graft, Wovex vascular graft, XenoSure biologic

patch, ProCol vascular graft and CadioCel and VascuCel patch products contain bovine tissue or material derived from bovine
sources, our Omniflow II Biosynthetic Vascular Graft contains ovine tissue, and our surgical glue contains porcine gelatin.
Products that contain materials derived from animal sources, including food, pharmaceuticals and medical devices, are
increasingly subject to scrutiny in the media and by regulatory authorities. Regulatory authorities are concerned about the
potential for the transmission of disease from animals to humans via those materials. This public scrutiny has been particularly
acute in Japan and Western Europe with respect to products derived from animal sources, because of concern that bovine
materials infected with the agent that causes bovine spongiform encephalopathy, otherwise known as BSE or mad cow disease,
may, if ingested or implanted, cause a variant of the human Creutzfeldt-Jakob Disease, an ultimately fatal disease with no known
cure. Cases of BSE in cattle discovered in Canada and the United States have increased awareness of the issue in North America.
Certain regions or countries have issued regulations that require products to be processed from bovine tissue sourced from
countries, like Australia or New Zealand, where no cases of BSE have occurred. Products that contain materials derived from
animals, including our products, may become subject to additional regulation, or even be banned in certain countries, because of
concern over the potential for the transmission of infectious agents. Significant new regulation, or a ban of our products, could
impair our current business or our ability to expand our business, and in the case of a ban or suspension, could materially and
adversely affect our results of operations.

We face intense competition from other companies, technologies, and alternative medical procedures and we may not be able
to compete effectively.

The segments in which we compete are highly competitive, subject to change, and significantly affected by new product
introductions and other activities of industry participants. Although no one company competes against us in all of our product
lines or services, a number of manufacturers of peripheral vascular devices have substantially greater capital resources, larger
customer bases, broader product lines, larger sales forces, greater marketing and management resources, larger research and
development staffs, and larger facilities than ours; have established reputations with our target customers; and have developed
worldwide distribution channels that are more effective than ours. Our competitors could elect to devote additional resources to
the segments in which we currently enjoy less competition. Also, although we currently have leading positions in the segments for
some of our products, this is not true for all of our products. From time to time, we have experienced difficulties competing
against large companies.

Recent industry consolidation could make the competitive environment more difficult for smaller companies like ours. Our

competitors may be companies who are larger than us and who have substantially greater financial, technological, research and
development, regulatory, marketing, sales, and personnel resources than we do. Certain of these competitors are able to
manufacture at lower costs and may therefore offer comparable products at lower prices. Certain of these competitors may also
have greater experience in developing and further improving products, obtaining regulatory approvals, and manufacturing and
marketing such products. Certain of these competitors may obtain patent protection or regulatory approval or clearance, or achieve
product commercialization, before us, any of which could materially adversely affect us. Further, if the trend towards
endovascular procedures versus open vascular procedures continues or accelerates, our competitors may be better poised to take
advantage of that trend, since our main product lines are used primarily in open vascular procedures. Because of the size of the
vascular disease market opportunity, competitors and potential competitors have dedicated significant resources to aggressively
promote their products. Also, new product developments that could compete with us more effectively are likely because the
vascular disease market is characterized by extensive research efforts and technological progress. Competitors may develop
technologies and products that are safer, more effective, easier to use, less expensive, or more readily accepted than ours. Their
products could make our technology and products obsolete or noncompetitive. Our competitors may also be able to achieve more
efficient manufacturing and distribution operations than we can. In addition, many of our products face competition from
alternative procedures that utilize a different kind of medical device that we do not currently sell. Increased competition could also
result in price reductions and loss of market share, any of which could result in lower revenues and reduced gross profits.

If we are unable to increase our selling prices to customers, or if we are required to make price concessions, our rate of net
sales growth could be reduced and our operating results could suffer.

In the years ended December 31, 2019, 2018 and 2017, a material portion of our increases in net sales was driven by higher

average selling prices to our hospital customers across several of our product lines, particularly with respect to sales of our
LeMaitre Valvulotome and with respect to sales occurring in the United States. In the past, we have been able to rely upon our
intellectual property position, our well-known brands, and our established reputation to implement price increases. We
implemented a significant price increase in 2015 for our LeMaitre Valvulotome, and our ability to implement additional price
increases with respect to that product in the future may be limited.

Additionally, we may become unable to implement further increases in the selling prices of our products:

•

if healthcare spending is reduced, particularly in the United States, in response to government-enacted healthcare
reform, general economic conditions, or the influence of accountable care organizations;

if the reimbursement rates for the medical procedures in which our products are used are reduced or limited; or

if competitors introduce lower-priced products of comparable safety and efficacy.

We also expect marketplace changes to increasingly place pressure on medical device pricing as hospitals join group
purchasing organizations, integrated delivery networks, managed care organizations and other groups that seek to aggregate
purchasing power and as hospitals are given financial incentives to improve quality and reduce costs. Due to pricing pressures,
surgeons may even perform alternative procedures in which our products are unnecessary.

If we become unable to raise selling prices, or if we are required to make price concessions, it could reduce our rate of net

sales growth and harm our operating results.

The risks inherent in operating internationally and the risks of selling and shipping our products and of purchasing our
components and products internationally may adversely impact our net sales, results of operations, and financial condition.

We derive a significant portion of our net sales from operations in markets outside of the United States. For the year ended

December 31, 2019, 46% of our net sales were derived from operations outside of the United States. Our international sales
operations expose us and our representatives, agents, and distributors to risks inherent in operating in foreign jurisdictions. These
risks include:

•

fluctuations in foreign currency exchange rates;

the imposition of additional U.S. and foreign governmental controls or regulations, including export licensing
requirements, duties and tariffs, and other trade restrictions, whether due to, or in reaction to, changes in U.S. trade
policy;

the risk of non-compliance with the Foreign Corrupt Practices Act by our sales representatives or our distributors;

changing medical device regulations that may impede our ability to register our products in a jurisdiction;

the imposition of U.S. and/or international sanctions against a country, company, person, or entity with whom we
do business that would restrict or prohibit continued business with the sanctioned country, company, person, or
entity, whether due to, or in reaction to, changes in U.S. foreign policy;

•
•

•

a shortage of high-quality sales personnel and distributors;
loss of any key personnel who possess proprietary knowledge, or who are otherwise important to our success in
certain international markets;

changes in third-party reimbursement policies that may require some of the patients who receive our products to
directly absorb medical costs or that may necessitate the reduction of the selling prices of our products;

the imposition of restrictions on the activities of foreign agents, representatives, and distributors;

scrutiny of foreign tax authorities, which could result in significant fines, penalties, and additional taxes being
imposed on us;

pricing pressure that we may experience internationally;

laws and business practices favoring local companies;

longer payment cycles;

difficulties in enforcing agreements and collecting receivables through certain foreign legal systems;

difficulties in enforcing or defending intellectual property rights;

exposure to different legal and political standards; and

political, economic, and/or social instability.

We cannot assure you that one or more of these factors will not harm our business. Any material decrease in our

international sales would adversely impact our net sales, results of operations, and financial condition.

Outbreaks of pandemic diseases, such as the novel coronavirus, Covid-19, could cause disruptions in our business.

In addition to the above risks related to our international operations, we also face risks related to disease outbreaks, such as

the recent outbreak of Covid-19, first identified in Wuhan, Hubei Province, China. An outbreak of a contagious disease,
particularly to extent it becomes pandemic, could significantly disrupt our business operations. The effects of such an outbreak
include restrictions on our ability to travel to support our sites in Asia/Pacific Rim and other impacted territories or our customers
located there, disruptions in our ability to distribute products, reduced sales of our products in territories where widespread
quarantines due to the disease have been imposed, and/or temporary closures of our facilities in Asia/Pacific Rim and other
impacted territories. In addition, a significant geographic spread of a pandemic such as Covid-19, an increase in the severity of the
outbreak and/or a prolonged duration of the outbreak could adversely affect the global economy, which could result in reduced
demand for our products. Any of these events could lead to a loss of sales and harm our financial condition and results of
operations.

Legal, political and economic uncertainty surrounding the exit of the U.K. from the EU may be a source of instability in
international markets, create significant currency fluctuations, adversely affect our operations in the U.K. and pose additional
risks to our business, revenue, financial condition, and results of operations..

Following the result of a referendum in 2016, the U.K. left the EU on January 31, 2020. Pursuant to the formal withdrawal
arrangements agreed between the U.K. and the EU, the U.K. will be subject to a transition period under December 31, 2020 (the
Transition Period), during which EU rules will continue to apply. Negotiations between the U.K. and the EU are expected to
continue in relation to the customs and trading relationship between the U.K. and the EU following the expiry of the Transition
Period.

The uncertainty concerning the U.K’s legal, political and economic relationship with the EU after the Transition Period
may be a source of instability in the international markets, create significant currency fluctuations, and/or otherwise adversely
affect trading agreements or similar cross-border co-operation arrangements (whether economic, tax, fiscal, legal, regulatory or
otherwise).

These developments, or the perception that any of them could occur, have had, and may continue to have, a significant

adverse effect on global economic conditions and the stability of global financial markets, and could significantly reduce global
market liquidity and limit the ability of key market participants to operate in certain financial markets. In particular, it could also
lead to a period of considerable uncertainty in relation to the U.K. financial and banking markets, as well as on the regulatory
process in Europe. Asset valuations, currency exchange rates and credit ratings may also be subject to increased market volatility.

If the U.K. and the EU are unable to negotiate acceptable trading and customs terms or if other EU Member States pursue

withdrawal, barrier-free access between the U.K. and other EU Member States or among the European Economic Area overall
could be diminished or eliminated. The long-term effects of Brexit will depend on any agreements (or lack thereof) between the
U.K. and the EU and, in particular, any arrangements for the U.K. to retain access to EU markets after the Transition Period.

Such a withdrawal from the EU is unprecedented, and it is unclear how the U.K.’s access to the European single market for

goods, capital, services and labor within the EU, or single market, and the wider commercial, legal and regulatory environment,
will impact our U.K. operations and customers. We currently ship products to the U.K. from our Sulzbach, Germany location. If
Brexit results in greater restrictions on imports and exports between the U.K. and the EU, we may find it necessary to make
operational changes to adapt to those restrictions. We may be unable to make such changes in a commercially reasonable or
timely manner or at all. Additionally, this could result in higher costs of doing business in the U.K. and possibly the EU. We
opened our Hereford, England office in October 2019 principally to help manage these issues.

The use or misuse of our products and tissues we distribute may result in injuries that lead to product liability suits, which
could be costly to our business.

If our products or the tissue we process and preserve are defectively designed, manufactured, processed or labeled, contain

defective components, or are misused, or if our products or the tissues we process and preserve are found to have caused or
contributed to injuries or death, we may become subject to costly litigation by our customers or their patients. Although we offer
training for physicians, we do not require that physicians be trained in the use of our products or the tissues we distribute, and
physicians may use our products or the tissues we distribute incorrectly or in procedures not contemplated by us. We are from
time to time involved in product liability claims. Product liability claims could divert management’s attention from our core
business, be expensive to defend, and result in sizable damage awards against us. Claims of this nature may also adversely affect
our reputation, which could damage our position in the market and subject us to recalls.

We cannot assure you that our product liability insurance coverage will be sufficient to satisfy any claim made against us.

Further, we may not be able to maintain the same level of coverage, and we may not be able to obtain adequate coverage at a
reasonable cost and on reasonable terms, if at all. Any product liability claim brought against us, with or without merit, could
increase our product liability insurance rates or prevent us from securing coverage in the future. Additionally, if any such product
liability claim or series of claims is brought against us for uninsured liabilities or is in excess of our insurance coverage, our
business could be harmed.

From time to time, we are involved in litigation where the outcome is uncertain and which could entail significant expense.

We are subject, from time to time, to legal proceedings and litigation, including, but not limited to, actions relating to
product liability, employment matters, intellectual property, contract disputes and other commercial matters. Because the outcome
of litigation is inherently difficult to predict, it is possible that the outcome of litigation, or even simply the defense of litigation,
could entail significant cost for us, divert management’s time and attention and harm our business. Additionally, we could
experience adverse effects of litigation even before finally adjudicated if a counterparty is granted intermediate relief such as an
injunction. Even claims without merit could subject us to adverse publicity and require us to incur significant legal fees. The fact
that we operate in international markets also increases the risk that we may face legal exposures as we seek to comply with a large
number of varying legal and regulatory requirements. If any such proceedings were to result in an unfavorable outcome, it could
adversely affect our business, financial condition and results of operations.

If we fail to convert additional countries or products from distributor sales to direct sales, or encounter difficulties in effecting
such conversions, our results of operations could suffer.

We have a history of converting international distributor sales to direct-to-hospital sales by buying out our foreign
distributor agreements and selling direct-to-hospital through our own direct sales representatives. In the future, we may elect to
convert select additional countries and products from distributor sales to direct-to-hospital sales. Such conversions sometimes
result in disruptions in our sales in the applicable geographies. These transitions may also have an adverse effect on our cash flow
because distributors, unlike direct sales representatives, pay us for inventory that they stock for later sale. In addition, switching to
a direct sales force may subject us to longer customer collection times and larger bad debt expense, since we would be required to
collect customer payments directly rather than bill and collect from the single distributor.

Our distribution agreements are exclusive, where permissible, with terms of up to five years. These agreements may
temporarily constrain our ability to convert certain countries or products from a distributor to a direct-to-hospital model. In order
to ensure a successful market transition, we may compensate a distributor in connection with the termination of their
distributorship, even where the payment of compensation is not required by contract or local law.

Following termination of any distribution agreement, we may encounter difficulties in transitioning to a direct-to-hospital

model. The transition to a direct sales model may require us to meet regulatory requirements that were previously the
responsibility of the distributor, which may subject us to additional costs. It also may take us longer than expected to find
qualified sales personnel to establish an effective sales force, which could negatively impact projected sales. If a distributor sold
our products through a network of sales agents, rather than exclusively through its own personnel, we may not be able to establish
relationships with all members of that network, temporarily limiting our access to the existing market. Similarly, failure to
maintain or quickly re-establish a distributor’s close relationships with the physicians who use our products could reduce sales.
Further, it may be difficult or impossible to transfer the assignment of a distributor’s rights to sell our products, and as a result,
sales to customers may be delayed until a new agreement or approval is obtained. The transition to a direct sales model may also
require us to incur additional expenses and may be time-consuming to manage remotely, as is the case with our sales office in
China. As a result of these risks, there can be no assurance that we will be successful in transitioning to a direct sales model in the
countries that we select, and difficulties that we encounter in these transitions could negatively affect our business.

Fluctuations in the exchange rate of the U.S. dollar and other currencies may adversely impact our results of operations.

Our results of operations are reported in U.S. dollars. While the majority of our revenue is denominated in U.S. dollars, a
significant portion of our revenue and costs is denominated in other currencies, such as the Euro, the British pound, the Japanese
yen, the Canadian dollar, the Chinese yuan and the Australian dollar. As of December 31, 2019, 46% of our net sales were to
customers outside the U.S., largely in currencies other than the U.S. dollar. As a result, we face exposure to movements in
currency exchange rates. Our results of operations and our operating expenses are exposed to foreign exchange rate fluctuations as
the financial results of those operations are translated from local currency into U.S. dollars upon consolidation. If the U.S. dollar
weakens against the local currency, the translation of these foreign currency-based local operations will result in increased net
assets, revenue, operating expenses, and net income. Similarly, our local currency-based net assets, revenue, operating expenses,
and net income will decrease if the U.S. dollar strengthens against the local currency. Additionally, receivable and payable
balances denominated in currencies other than the functional currency may result in gains and losses upon settlement that may
adversely impact our results of operations.

Risks Related to the Regulatory Environment

Oversight of the medical device industry might affect the manner in which we may sell medical devices and compete in the
marketplace.

There are laws and regulations that govern the means by which companies in the healthcare industry may market their
products and services to healthcare professionals and may compete by discounting the prices of their products and services,
including for example, the federal Anti-Kickback Statute, the federal False Claims Act, the federal Health Insurance Portability
and Accountability Act of 1996, state law equivalents to these federal laws that are meant to protect against fraud and abuse and
analogous laws in foreign countries. Violations of these laws are punishable by criminal and civil sanctions, including, but not
limited to, civil and criminal penalties, damages, fines, exclusion from participation in federal and state healthcare programs,
including Medicare and Medicaid. Although in structuring our sales and marketing practices and customer discount arrangements
we strive to comply with those laws and regulations, we cannot assure you that:

•

government officials charged with responsibility for enforcing those laws will not assert that our sales and
marketing practices or customer discount arrangements are in violation of those laws or regulations; or

government regulators or courts will interpret those laws or regulations in a manner consistent with our
interpretation.

Federal and state laws are also sometimes open to interpretation, and from time to time we may find ourselves at a

competitive disadvantage if our interpretation differs from that of our competitors.

Our business is subject to complex, costly, and burdensome regulations. We could be subject to significant penalties if we fail
to comply.

The production and marketing of our products and services and our ongoing research and development are subject to

extensive regulation and review by numerous governmental authorities both in the United States and abroad. U.S. and foreign
regulations applicable to medical devices and human tissues are wide-ranging and govern, among other things, the testing,
marketing, and premarket clearance or approval of new medical devices and services related to human tissues, as applicable, in
addition to regulating manufacturing and processing practices, reporting, promotion and advertising, importing and exporting,
labeling, and record-keeping procedures.

Our failure to comply with applicable regulatory requirements could result in governmental agencies or a court taking

action, including any of the following:

•

issuing public warning letters to us;

imposing fines and penalties on us;

issuing an injunction preventing us from manufacturing, processing, selling or distributing our products;

bringing civil or criminal charges against us;

delaying the introduction of our new products into the market;

ordering a recall of, or detaining or seizing, our products or cryopreserved human tissue; or

withdrawing or denying approvals or clearances for our products.

If any or all of the foregoing were to occur, our business, results of operations, and reputation could suffer.

If we are not successful in obtaining and maintaining clearances and approvals from governmental agencies for our medical
devices, we will not be able to sell our products, and our future growth will be significantly hampered.

Our products require premarket clearance or approval in the United States and the CE Mark or other approvals in foreign

countries where they are sold. Each medical device that we wish to market in the United States generally must receive either
510(k) clearance or approval of a premarket application, or PMA, from the FDA before the product can be marketed or sold.
Either process can be lengthy and expensive. The FDA’s 510(k) clearance procedure usually takes three to twelve months from
the date the FDA receives the application, but may take longer. Although 510(k) clearances have been obtained for nearly all of
our current products that require such clearances, the FDA may condition, limit or prohibit our sales of these products if safety or
effectiveness problems develop with the devices. Our new products or significantly modified existing products could be denied
510(k) clearance and required to undergo the more burdensome PMA approval process if they are not found to be substantially
equivalent.

The PMA approval process is much more costly, lengthy, and uncertain than the premarket notification process. It generally

takes from six months to three years from the date the application is submitted to, and filed with, the FDA, and may take longer.
Achieving premarket approval typically requires extensive clinical trials and may require the filing of numerous amendments with
the FDA over time. The FDA may also require post-approval studies to continue demonstrating the safe and effective performance
of these devices. We do not have significant experience in obtaining PMA approval or conducting these studies for our products.

The FDA has previously proposed changes for which FDA clearance to market would possibly require clinical data, more
extensive manufacturing information and post market data. As part of the 510(k) reform, the FDA proposes to issue regulations
defining grounds and procedures for rescission of 510(k) applications that have previously been cleared to market. Additionally,
in April 2018, the FDA announced the Medical Device Safety Action Plan: Protecting Patients, Promoting Public Health in which
the FDA has proposed limiting the age of predicate devices used in 510(k) applications, thus narrowing the field of available
predicates for comparison in the 510(k) process. The FDA may also require the more extensive PMA process for certain products.
Our ability to market our products outside the United States is also subject to regulatory approval, including our ability to
demonstrate the safety and effectiveness of our products in the clinical setting. Even if regulatory approval or clearance of a
product is granted, the approval or clearance could limit the uses or the claims for which the product may be labeled and
promoted, which may limit the market for our products. If we do not obtain and maintain foreign regulatory or FDA approval with
respect to our products, as applicable, we will not be able to sell our products, and our future growth will be significantly
hampered.

If we or some of our suppliers fail to comply with the FDA’s Quality System Regulation and other applicable requirements,
our manufacturing or processing operations could be disrupted, our sales and profitability could suffer, and we may become
subject to a wide variety of FDA enforcement actions.

We are subject to inspection and marketing surveillance by the FDA to determine our compliance with all regulatory
requirements. If the FDA finds that we have failed to comply with any regulatory requirements, it can institute a wide variety of
enforcement actions.

We and some of our suppliers must comply with the FDA’s Quality System Regulation, which governs the methods used

in, and the facilities and controls used for, the design, testing, manufacture, control, quality assurance, installation, servicing,
labeling, packaging, storage, and shipping of medical devices. Our Fox River Grove operations must comply with the FDA’s
current Good Tissue Practices, which are the FDA regulatory requirements for the processing of human tissue. The FDA enforces
its regulations through pre-announced and unannounced inspections. We have been, and anticipate in the future being, subject to
such inspections by the FDA and other regulatory bodies. The timing and scope of future audits is unknown and it is possible,
despite our belief that our quality systems and the operation of our manufacturing facilities will remain in compliance with U.S,
and non-U.S. regulatory requirements, that a future audit may result in one or more unsatisfactory results. If we or one of our
suppliers fails an inspection, or if a corrective action plan adopted by us or one of our suppliers is not sufficient, the FDA may
bring an enforcement action against us, and our operations could be disrupted and our manufacturing delayed.

We are also subject to the FDA’s general prohibition against promoting our products for unapproved or off-label uses and
to the medical device reporting regulations that require us to report to the FDA if our products may have caused or contributed to
a death or serious injury, or if our device malfunctions and a recurrence of the malfunction would likely result in a death or
serious injury. We must also file reports with the FDA of some device corrections and removals, and we must adhere to the
FDA’s rules on labeling and promotion. If we fail to comply with these or other FDA requirements or fail to take adequate
corrective action in response to any significant compliance issue raised by the FDA, the FDA can take significant enforcement
actions, which could harm our business, results of operations, and our reputation.

In addition, most other countries, such as Japan, require us to comply with manufacturing and quality assurance standards

for medical devices that are similar to those in force in the United States before marketing and selling our products in those
countries. If we fail to comply, we would lose our ability to market and sell our products in those foreign countries.

Even after our products have received marketing approval or clearance, our products and the tissue we process may be subject
to product recalls. 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 and 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. These authorities have been increasing their scrutiny of our industry. If those regulatory bodies feel that we have failed to
comply with regulatory standards or if we encounter unforeseen problems following initial approval, licensure or registration,
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 increased scrutiny of our industry by the various regulatory agencies and 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 precipitate one or more
additional regulatory agencies from also withdrawing or suspending their approval, license or registration.

In the event that any of our products proves to be defective, we can voluntarily recall, or the FDA or foreign equivalent
could require us to implement a recall of or prohibit the sale of, any of our products. For example, in 2019 we recalled certain lots
of catheters manufactured by Applied Medical due to an issue with premature material degradation. Recalls, whether voluntary or
required, could result in significant costs to us and significant adverse publicity, which could harm our ability to market our
products in the future.

With respect to our RestoreFlow allografts, we may voluntarily recall tissue, and in the event of non-compliance with the

regulations governing human tissue, the FDA may issue a warning letter, order the recall and/or destruction of tissues and/or order
the suspension or cessation of processing and preservation of new tissues.

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 reputation and 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.

Domestic and foreign legislative or administrative reforms resulting in restrictive reimbursement practices of third-party
payors and cost containment measures could decrease the demand for products purchased by our customers, the prices that
our customers are willing to pay for those products and the number of procedures using our devices.

Our products and our tissue preservation services are purchased principally by hospitals or physicians which typically bill
various third-party payors, such as governmental programs (e.g., Medicare, Medicaid and comparable foreign programs), private
insurance plans and managed care plans, for the healthcare services provided to their patients. The ability of our customers to
obtain appropriate reimbursement for products and services from third-party payors is critical to the success of our products and
services because it affects which products customers purchase and the prices they are willing to pay. Reimbursement varies by
country and can significantly impact the acceptance of new technology. Implementation of healthcare reforms in the United States
and in significant overseas markets such as Germany, Japan, France and other countries may limit, reduce or eliminate
reimbursement for our products and services and adversely affect both our pricing flexibility and the demand for our products and
services. Even when we develop or acquire a promising new product or service, we may find limited demand for the product or
service unless reimbursement approval is obtained from private and governmental third-party payors.

Major third-party payors for hospital services in the United States and abroad continue to work to contain healthcare costs

through, among other things, the introduction of cost containment incentives and closer scrutiny of healthcare expenditures by
both private health insurers and employers. For example, in an effort to decrease costs, certain hospitals and other customers may
resterilize our products intended for a single use or purchase reprocessed products from third-party reprocessors in lieu of
purchasing new products from us.

Further legislative or administrative reforms to the reimbursement systems in the United States and abroad, or adverse

decisions relating to our products by administrators of these systems in coverage or reimbursement, could significantly reduce
reimbursement for procedures using our medical devices or result in the denial of coverage for those procedures. Examples of
these reforms or adverse decisions include price regulation, competitive pricing, coverage and payment policies, comparative
effectiveness of therapies, technology assessments and managed-care arrangements. Any of such reforms or adverse decisions
resulting in restrictive reimbursement practices or denials of coverage could have an adverse impact on the acceptance of our
products and the prices that our customers are willing to pay for them.

Risks Related to Intellectual Property

If we fail to adequately protect our intellectual property rights, or prevent use of our intellectual property by third parties, we
could lose a significant competitive advantage and our business may suffer.

Our success depends in part on obtaining, maintaining, and enforcing our intellectual property rights, trademarks, and other
proprietary rights, and our ability to avoid infringing on the proprietary rights of others. We take precautionary steps to protect our
technological advantages and intellectual property. We rely upon patent, trade secret, copyright, know-how, and trademark laws,
as well as license agreements and contractual provisions, to establish our intellectual property rights and protect our products.
These measures may only afford limited protection and may not:

•
•
•

prevent our competitors from duplicating our products or services;
prevent our competitors from gaining access to our proprietary information and technology; or
permit us to gain or maintain a competitive advantage.

The issuance of a patent is not conclusive as to its validity or enforceability. Any patents we have obtained or will obtain in
the future might also be invalidated or circumvented by third parties. In addition, any pending patent applications may not issue as
patents or, if issued, may not provide commercially meaningful protection, as competitors may be able to design around our
patents to produce alternative, non-infringing designs. Should such challenges to our patents be successful, competitors might be
able to market products and use manufacturing processes that are substantially similar to ours. Furthermore, patents expire after a
certain duration, depending on the jurisdiction in which issued. To the extent any manufacturers are successful in challenging our
patents or they enter the market following the expiration of our patents, this could have an adverse impact on our business and
harm our sales and operating results.

Additionally, we may not be able to effectively protect our rights in unpatented technology, trade secrets, and confidential
information. We have a policy of requiring key employees and consultants and corporate partners with access to trade secrets or
other confidential information to execute confidentiality agreements. Our confidentiality agreements also require our employees to
assign to us all rights to any inventions made or conceived during their employment with us. We also generally require our
consultants to assign to us any inventions made during the course of their engagement by us. There can be no assurance, however,
that these agreements will provide meaningful protection or adequate remedies for us in the event of unauthorized use, transfer, or
disclosure of confidential information or inventions.

In addition, the laws of foreign countries may not protect our intellectual property rights effectively or to the same extent as
the laws of the United States. If our intellectual property rights are not adequately protected, we may not be able to commercialize
our technologies, products, or services and our competitors could commercialize similar technologies, which could result in a
decrease in our sales and market share.

If third parties claim that we infringe upon their intellectual property rights, we may incur liabilities and costs, and we may
have to redesign or discontinue selling the affected product.

The medical device industry is litigious with respect to patents and other intellectual property rights. Companies operating
in our industry routinely seek patent protection for their product designs, and many of our principal competitors have large patent
portfolios. Companies in the medical device industry have used intellectual property litigation to gain a competitive advantage.
Whether a product infringes a patent or other intellectual property rights involves complex legal and factual issues, the
determination of which is often uncertain. We face the risk of claims that we have infringed on third parties’ intellectual property
rights, and we cannot assure you that our products or methods do not infringe the patents or other intellectual property rights of
third parties. Our efforts to identify and avoid infringing on third parties’ intellectual property rights may not always be
successful. Any claims of patent or other intellectual property infringement, even those without merit, could:

•

be expensive and time consuming to defend;

result in us being required to pay significant damages to third parties for past use of the asserted intellectual
property;

harm our reputation;

cause us to cease making or selling products that incorporate the challenged intellectual property;

require us to redesign, reengineer, or rebrand our products, which may not be possible and could be costly and time
consuming if it is possible to do so at all;

require us to enter into royalty or licensing agreements in order to obtain the right to use a third party’s intellectual
property, which agreements may not be available on terms acceptable to us or at all;

divert the attention of our management and key personnel from other tasks important to the success of our business;
or

result in our customers or potential customers deferring or limiting their purchase or use of the affected products
until resolution of the litigation.

It is also possible that a third party could claim that our manufacturing process violates an existing patent or other
intellectual property rights. If we were unsuccessful in defending such a claim, we may be forced to stop production at one or
more of our manufacturing facilities.

In addition, new patents obtained by our competitors could threaten a product’s continued life in the market even after it has

already been introduced. If our business is successful, the possibility may increase that others will assert infringement claims
against us.

If we believe our product is or may be the subject of a patent or other intellectual property rights of a third party, we may
attempt to reach a license agreement with them to manufacture, market, and sell these products. If we fail to reach an agreement,
we could be required to pay significant damages to third parties for past use of the asserted intellectual property and may be
forced to cease making or selling products that incorporate the challenged intellectual property.

In addition, we may become subject to interference proceedings conducted in the United States Patent Office or opposition

proceedings conducted in foreign patent offices challenging the priority of invention or the validity of our patents.

Risks Related to Our Common Stock

Our stock price may be volatile, and an investment in our common stock could suffer a decline in value.

There can be significant volatility in the market price and trading volume of equity securities that is unrelated to the
financial performance of the companies issuing the securities. These broad market fluctuations may negatively affect the market
price of our common stock. Shareholders may not be able to resell their shares at or above the price at which they purchased them
due to fluctuations in the market price of our common stock caused by changes in our operating performance or prospects, a
reduced volume of trading in our common stock, and other factors.

Some factors that may have a significant effect on our common stock market price include:

•

actual or anticipated fluctuations in our operating results or future prospects;

our announcements or our competitors’ announcements of new products;

public concern as to the safety or efficacy of our products and services;

the public’s reaction to our press releases, our other public announcements, and our filings with the SEC;

our determination whether or not to continue the payment of quarterly cash dividends;

our determination whether or not to undertake or continue a share repurchase program;

strategic actions by us or our competitors, such as acquisitions, divestitures or restructurings;

dilutive issuances of additional securities;

changes in our growth rates or our competitors’ growth rates;

developments regarding our patents or proprietary rights or those of our competitors;

our inability to raise additional capital;

new laws or regulations or new interpretations of existing laws or regulations applicable to our business;

the discontinuation of a product line or other revenue generating activity;

adverse regulatory actions which may necessitate recalls of our products or services or warning letters that
negatively affect the markets for our products or services;

sales of common stock by us or our directors, officers, or principal stockholders;

control by our affiliates and insiders of a significant percentage of our common stock;

changes in stock market analyst recommendations or earnings estimates regarding our common stock, comparable
companies, or our industry generally;

reduced or lower volume of trading in our common stock; and

our inclusion in or removal from stock market indices, such as the S&P 600 or Russell 2000.

In the past, following periods of volatility in the market price of a company’s securities, securities class action litigation has

often been brought. This litigation, if brought against us, could result in substantial costs and a diversion of our management’s
attention and resources.

Our chief executive officer has significant voting power and may take actions that may not align with the interests of our other
stockholders.

Our chief executive officer and the LeMaitre Family LLC collectively control approximately 16% of our outstanding
common stock as of December 31, 2019. As a result, these stockholders, if they were to act together, could have significant
influence on many matters requiring stockholder approval, including the election of directors and approval of significant corporate
transactions. This concentration of ownership may have the effect of delaying or preventing a change in control, might adversely
affect the market price of our common stock, and may not be fully aligned with the interests of other stockholders.

We have not established a minimum dividend payment level for our common stockholders and there are no assurances of our
ability to pay dividends to common stockholders in the future.

In February 2011, our Board of Directors adopted a quarterly dividend program for the purpose of returning capital to our

stockholders. However, we have not established a minimum dividend payment level for our common stockholders and our ability
to pay dividends may be harmed by the risks and uncertainties described in this Annual Report on Form 10-K and in the other
documents we file from time to time with the SEC. Future dividends, if any, will be authorized by our Board of Directors and
declared by us based upon a variety of factors deemed relevant by our directors, including, among other things, our financial
condition, liquidity, earnings projections and business prospects. In addition, financial covenants in any credit facility to which we
become a party may restrict our ability to pay future quarterly dividends. We can provide no assurance of our ability to pay
dividends in the future.

Item 1B.

Unresolved Staff Comments

None.

Item 2.

Properties

Our principal worldwide executive, distribution, and manufacturing operations are located at three adjacent 27,098 square
foot, 27,289 square foot and 15,642 square foot leased facilities, as well as a fourth nearby 12,878 square foot leased facility, in
Burlington, Massachusetts. In November 2019 we leased a fifth 26,447 square foot building from the same landlord from whom
we lease the other four buildings, and extended the lease terms on the other four buildings, such that all five leases run through
December 2030. In addition, our international operations are headquartered at a 13,948 square foot leased facility located in
Sulzbach, Germany, with a lease expiring in August 2023. We also lease additional manufacturing, processing, distribution and
sales offices in other U.S., Europe and Asia/Pacific Rim locations. Based on our current operating plans, we believe our current
facilities are adequate for our needs.

Item 3.

Legal Proceedings

In the ordinary course of business, we are from time to time involved in lawsuits, claims, investigations, proceedings, and

threats of litigation consisting of intellectual property, contractual, commercial, employment, and other matters. While the
outcome of these proceedings and claims cannot be predicted with certainty, there are no matters, as of December 31, 2019, that,
in the opinion of management, would be reasonably expected to have a material adverse effect on our financial position, results of
operations or cash flows.

Item 4.

Mine Safety Disclosures

Not applicable.

PART II

Item 5.

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
Securities

Market Information

Our common stock is publicly traded on The Nasdaq Global Market under the symbol “LMAT”. Prior to our initial

public offering on October 19, 2006, there was no public trading market for our common stock.

Holders of Record

On March 2, 2020, the closing price per share of our common stock was $29.03 as reported on The Nasdaq Global Market,

and we had approximately 167 stockholders of record. In addition, we believe that a significant number of beneficial owners of
our common stock hold their shares in street name.

Stock Price Performance Graph

Set forth below is a graph comparing the cumulative total stockholder return on LeMaitre’s common stock with the

Nasdaq US Composite Index, the Nasdaq Medical Equipment Index and a peer group for the period covering from December 31,
2014, through the end of LeMaitre’s fiscal year ended December 31, 2019. The graph assumes an investment of $100.00 made on
December 31, 2014, in (i) LeMaitre’s common stock, (ii) the stocks comprising the Nasdaq US Composite Index, (iii) the stocks
comprising the Nasdaq Medical Equipment Index and (iv) the stocks comprising our peer groups. The following shall not be
deemed incorporated by reference into any of our other filings under the Securities Exchange Act of 1934, as amended, or the
Securities Act of 1933, as amended, except to the extent we specifically incorporate it by reference into such filings.
The comparisons in the graph below are based upon historical data and are not indicative of, nor intended to forecast, future
performance of our common stock.

12/14

12/15

12/16

12/17

12/18

12/19

LeMaitre Vascular, Inc ................................
NASDAQ Composite ..................................
NASDAQ Medical Equipment ....................
2017 Peer Group ..........................................
2018 Peer Group ..........................................

100.00
100.00
100.00
100.00
100.00

228.79
106.96
111.06
72.18
82.23

339.73
116.45
116.87
89.95
113.32

430.03
150.96
166.41
115.81
148.98

321.97
146.67
187.88
142.51
186.90

495.09
200.49
227.84
150.13
201.98

LeMaitre’s fiscal year ends on the last day of December each year; data in the above table reflects market values for our stock and Nasdaq and peer group
indices as of the close of trading on the last trading day of the year presented.

The 2018 peer group includes the following companies: AngioDynamics, Inc., Cardiovascular Systems Inc., Cryolife Inc., Endologix, Inc., Merit

Medical Systems, Inc., and Penumbra, Inc.

The 2019 peer group includes the following companies: AngioDynamics, Inc., Cardiovascular Systems Inc., Cryolife Inc.,
Merit Medical Systems, Inc., Penumbra, Inc, Silk Road Medical, Inc, and Shockwave Medical, Inc. This new peer group differs
from our old peer group. Specifically, we removed Endologix, Inc. as the decline in market value of that company indicated a
going concern issue. We also added Silk Road Medical, Inc, and Shockwave Medical, Inc. due to their recent initial public
offerings and vascular surgeon call points.

Recent Sales of Unregistered Securities

Not Applicable.

Issuer Purchases of Equity Securities

Period

Issuer Purchases of Equity Securities

Total
Number of
Shares (or Units)
Purchased (1)

Average
Price
Paid Per
Share (or Unit)

Maximum Number
(or Approximate
Total Number of Dollar Value) of
Shares (or Units) Shares (or Units)
Purchased as
that may yet be
Part of Publicly
Purchased under
Announced Plans
or Program

the Plans or
Program

October 1, 2019 through October 31,
2019 ..........................................................
November 1, 2019 through November 30,
2019 ..........................................................
December 1, 2019 through December 31,
2019 ..........................................................

- $

6,657 $

35.66

Total ...........................................................

6,657 $

35.66

N/A

(1) For the three months ended December 31, 2019, we repurchased 6,657 shares of our common stock to satisfy

employees’ obligations with respect to minimum statutory withholding taxes in connection with the vesting of restricted
stock units.

78,352
24,186
54,166

22,780
14,010
5,479
744
(360 )
42,653

Item 6.

Selected Financial Data

You should read the following selected consolidated financial data in conjunction with our consolidated financial

statements and the related notes which are included elsewhere in this Annual Report and the “Management’s Discussion and
Analysis of Financial Condition and Results of Operations” section of this Annual Report. We have derived the consolidated
statement of operations data for the years ended December 31, 2019, 2018 and 2017 and the consolidated balance sheet data as of
December 31, 2019 and 2018, from our audited consolidated financial statements, which are included elsewhere in this Annual
Report. We have derived the consolidated statement of operations data for the years ended December 31, 2016 and 2015, and the
consolidated balance sheet data as of December 31, 2017, 2016 and 2015 from our audited consolidated financial statements,
which are not included in this Annual Report. Our historical results for any prior period are not necessarily indicative of results to
be expected for any future period.

Year ended December 31,

2019

2018

2017

2016

2015

(in thousands, except per share data)

Consolidated Statements of Operations

Data:

Net sales .................................................... $
Cost of sales ..............................................
Gross profit .....................................

117,232 $
37,379
79,853

105,568 $
31,629
73,939

100,867 $
30,170
70,697

89,151 $
26,215
62,936

Operating expenses:

Sales and marketing ...........................
General and administrative ................
Research and development ................
Medical device excise tax ..................
Gain on divestitures and acquisitions
Total operating expenses ...........................

Income from operations .........................
Other income (expense):

Interest income ..................................
Interest expense .................................
Foreign currency gain (loss) ..............
Total other income (loss) .......................

30,339
19,055
9,276
-
-
58,670

27,318
17,689
8,197
-
(7,474 )
45,730

25,948
17,010
6,636
-
-
49,594

26,105
14,354
6,141
-
-
46,600

21,183

28,209

21,103

16,336

11,513

698
-
(202 )
496

631
(2 )
(394 )
235

179
(21 )
(155 )
3

81
(14 )
(161 )
(94 )

13
-
(102 )
(89 )

Income before income tax ......................

21,679

28,444

21,106

16,242

11,424

Provision for income taxes ....................
Net income .............................................. $

3,745
17,934 $

5,501
22,943 $

3,929
17,177 $

5,652
10,590 $

3,666
7,758

Earnings per share of common stock:
Basic ......................................................... $

0.91 $

1.18 $

0.91 $

0.57 $

Diluted ...................................................... $

0.88 $

1.13 $

0.86 $

0.55 $

0.44

0.42

Weighted-average shares outstanding:
Basic .........................................................

19,813

19,426

18,961

18,485

17,764

Diluted ......................................................

20,326

20,242

20,033

19,241

18,316

Cash dividends declared per common

share ...................................................... $

0.34 $

0.28 $

0.22 $

0.18 $

0.16

2019

2018

Year ended December 31,
2017
(in thousands)

2016

2015

Consolidated Balance Sheet Data:
Cash and cash equivalents .............................. $
Short-term marketable securities ....................
Current assets .................................................
Total assets .....................................................
Current liabilities ............................................
Long-term liabilities .......................................
Total liabilities ...............................................
Total stockholders’ equity ..............................

11,786 $
20,895
92,092
188,341
20,851
5,394
40,200
148,141

26,318 $
21,668
94,017
153,088
19,758
3,095
22,853
130,235

19,096 $
22,564
80,311
126,323
13,189
3,364
16,553
109,770

24,288 $
-
59,027
101,924
10,482
3,942
14,424
87,500

27,451
-
58,184
90,704
10,368
2,452
12,820
77,884

Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with our consolidated financial statements and the related notes

contained elsewhere in this Annual Report on Form 10-K and in our other Securities and Exchange Commission filings. The
following discussion may contain predictions, estimates, and other forward-looking statements that involve a number of risks and
uncertainties, including those discussed under “Risk Factors” and elsewhere in this Annual Report on Form 10-K. These risks
could cause our actual results to differ materially from any future performance suggested below.

Overview

We are a medical device company that develops, manufactures, and markets medical devices and implants largely used in

the treatment of peripheral vascular disease. To a lesser extent, our devices also treat cardiovascular disease and are used in
neurosurgery applications. We also provide processing and cryopreservation services of peripheral vascular human tissue for
implantation into patients. Our principal product offerings are sold throughout the world, primarily in the United States, Europe
and Asia/Pacific Rim. We estimate that the annual worldwide market for all of our devices exceeds $5 billion, within which our
core product lines address roughly $900 million. 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 and developing complementary vascular and other devices. We have used acquisitions as a primary means of further
accessing the peripheral vascular device market, and we expect to continue to pursue this strategy in the future. We currently
manufacture most of our products in our Burlington, Massachusetts headquarters.

Our products are used primarily by vascular surgeons who treat peripheral vascular disease through both open surgery and
endovascular techniques. In contrast to interventional cardiologists and interventional radiologists, neither of whom are certified
to perform open surgical procedures, vascular surgeons can perform both open surgery and minimally invasive endovascular
procedures, and are therefore uniquely positioned to provide a wider range of treatment options to patients.

Our principal product lines include the following: valvulotomes, biologic vascular patches, carotid shunts, embolectomy

catheters, biologic vascular grafts, anastomotic clips, radiopaque marking tape, powered phlebectomy devices, prosthetic vascular
grafts, surgical glue and remote endarterectomy devices. Through our RestoreFlow allografts business we also provide services
related to the processing and cryopreservation of human vascular and cardiac tissue.

To assist us in evaluating our business strategies, we regularly monitor long-term technology trends in peripheral vascular

and other device markets. 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 and our manufacturing capacity requirements.

Historically we have experienced success in lower-rivalry niche product segments, for example the markets for valvulotome

devices and biologic vascular patches. More recently, however, we have faced increased competition in the biologic vascular
patch segment, which has inhibited our ability to continue to increase market share or to implement selling price increases. In the
valvulotome market, our highly differentiated devices have historically allowed us to increase our selling prices while maintaining
our unit market share. In contrast, we have experienced less success in highly competitive markets such as our ProCol biologic
graft product line, where we face strong competition from larger companies with greater resources. While we believe that these
challenging market dynamics can be mitigated by our relationships with vascular surgeons, there can be no assurance that we will
be successful in these highly competitive markets.

In recent years we have also experienced success in international markets, such as Europe, where we sometimes offer
comparatively lower average selling prices. If we continue to seek growth opportunities outside of North America, we may
experience downward pressure on our gross margin.

Our business opportunities include the following:

•

the long-term growth of our direct sales force in North America, Europe and Asia/Pacific Rim;

the addition of complementary products through acquisitions;

the introduction of our products in new territories upon receipt of regulatory approvals or registrations in these
territories;

the updating of existing products and introduction of new products through research and development; and

the consolidation of product manufacturing into our Burlington, Massachusetts corporate headquarters.

We sell our products and services primarily through a direct sales force. As of December 31, 2019 our sales force was

comprised of 112 sales representatives in North America, Europe and Asia/Pacific Rim, including three export managers, one in
each of the three geographic regions. Our worldwide headquarters is located in Burlington, Massachusetts, and we also have
North American sales offices in Chandler, Arizona and Vaughan, Canada. Our European headquarters is located in Sulzbach,
Germany, and we also have European sales offices in Milan, Italy; Madrid, Spain; and Hereford, England. Our Asia/Pacific Rim
headquarters is located in Singapore, and we have Asia/Pacific Rim sales offices in Tokyo, Japan; Shanghai, China; and North
Melbourne, Australia. During the years ended December 31, 2019 and 2018, approximately 94% and 95%, respectively, of our net
sales were generated in territories in which we employ direct sales representatives. We also sell our products in other countries,
including Korea, Russia and Brazil among others, through distributors.

Because we believe that direct-to-hospital sales engender closer customer relationships, and allow for higher selling prices

and gross margins, we periodically enter into transactions with our distributors to transition their sales of our medical devices
towards our direct sales organization:

•

In December 2015, we signed a master distribution agreement with Meheco Yonstron Pharmaceutical Co. Ltd.
(Meheco), a Chinese distribution and logistics company, and began selling our Chinese market products to Meheco
in 2016. Meheco then sold our products to multiple sub-distributors who then sold to Chinese hospitals. This
agreement expired in December 2017, and we are currently in the process of signing distribution agreements with
sub-distributors and have begun selling our products to sub-distributors in China. We repurchased $120,000 of our
products from Meheco in 2018, which resulted in a corresponding revenue reversal.

•

In March 2018, we terminated our master distribution agreement with Sinopharm United Medical Device Co., Ltd.
(UCMC) under which we sold our powered phlebectomy systems and related disposable devices for distribution in
China. In April 2018 we began selling these products to our sub-distributors in China. We repurchased $159,000 of
our products from UCMC in 2019.

During 2018, we entered into definitive agreements with several former Applied Medical and Cardial distributors in
Europe and Asia/Pacific Rim in order to terminate their distribution of our recently acquired catheter, polyester graft
and valvulotome products, and we began selling direct-to-hospitals in those geographies. The termination fees totaled
approximately $0.1 million.

Our strategy for growing our business includes the acquisition of complementary product lines and companies, and

occasionally the discontinuance or divestiture of products or activities that are no longer complementary:

•

In November 2016, we acquired substantially all of the assets related to the peripheral vascular allograft operations
of Restore Flow Allografts, LLC for $12.0 million plus additional payments of up to $6.0 million depending upon
the satisfaction of certain contingencies.

In April 2018, we sold our Reddick cholangiogram catheter and Reddick-Saye screw product lines to Specialty
Surgical Instrumentation, Inc. for $7.4 million.

In September 2018, we acquired the assets of the embolectomy catheter business from Applied Medical Resources
Corporation for $14.2 million. We have initiated a project to transfer the manufacturing of the acquired devices to
our Burlington facility. We expect this transition to be completed in 2020.

In October 2018, we acquired the assets of Cardial, a subsidiary of Becton, Dickinson & Company, located in Saint-
Etienne, France, for €2.0 million. Cardial’s product lines include polyester vascular grafts, valvulotomes and
surgical glue.

In July 2019, we entered into an agreement with UreSil, LLC to purchase the remaining assets of their Tru-Incise
valve cutter business, including distribution rights in the United States, for $8.0 million.

In October 2019, we acquired the assets of the CardioCel and VascuCel biologic patch business from Admedus Ltd
for $15.5 million plus additional payments of up to $7.8 million depending upon the satisfaction of certain
contingencies.

In addition to relying upon acquisitions for growth, we also rely on internal product development efforts to bring

differentiated technology and next-generation products to market:

•

In 2017, we launched a longer version of our Anastoclip AC intended for use in neurosurgery applications.

In 2018, we expanded the indications for our Anastoclip GC in the United States to include dura tissue repair.

In 2019, we launched XenoSure Plus aimed at surgeons who prefer using a biologic patch that is thicker and stiffer
than our standard XenoSure patch.
In 2019, we launched DuraSure, a biologic patch indicated for closing or repairing dural defects in neurosurgical
procedures.

In addition to our sales growth strategies, we have also executed several operational initiatives designed to consolidate and

streamline manufacturing within our Burlington, Massachusetts facilities. We expect these plant consolidations will result in
improved control over our production quality as well as reduced costs over the long-term. Our most recent manufacturing
transitions included

•

In 2016, we initiated a project to transfer the manufacturing of the ProCol biologic product line to our facility in
Burlington. This transition was completed in 2018.

In 2017, we renovated our manufacturing facility in Burlington, in which many of our biologic offerings, including
the XenoSure patch as well as our ProCol biologic grafts, are produced or processed. The cost of the facility
renovation was approximately $3.0 million.

In 2018, we acquired the embolectomy catheter business assets from Applied Medical Resources Corporation. We
have initiated a project to transfer the manufacturing of the acquired devices to our Burlington facility. We expect
this transfer to be completed in 2020.

In 2019, we again built out our biologic manufacturing cleanroom in Burlington so that we can transfer our
Omniflow biosynthetic graft from our North Melbourne, Australia facility. We expect this transfer to be completed
in 2020. The cost of the buildout was approximately $0.8 million.

Our execution of these business opportunities may affect the comparability of our financial results from period to period

and may cause substantial fluctuations from period to period as we incur related process engineering and other charges.

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, 2019, approximately 46% of our sales took place outside the United States, largely in
currencies other than the U.S. dollar. We expect foreign currencies will represent a significant percentage of our 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, if there is an increase in the rate at which a foreign
currency is exchanged for U.S. dollars, it will require more of the foreign currency to equal a specified amount of U.S. dollars
than before the rate increase. In such cases we will receive less revenue in U.S. dollars than we did before the exchange rate
changed. For the year ended December 31, 2019, we estimate that the effects of changes in foreign exchange rates decreased
reported sales by approximately $2.3 million, as compared to rates in effect for the year ended December 31, 2018.

Net Sales and Expense Components

The following is a description of the primary components of our net sales and expenses:

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. 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 certain 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 cost of sales consists primarily of
manufacturing personnel, raw materials and components, depreciation of property and equipment, and other allocated
manufacturing overhead, as well as freight expense we pay to ship products to customers.

Sales and marketing. Our sales and marketing expense consists primarily of salaries, commissions, stock based
compensation, travel and entertainment, attendance at vascular congresses, training programs, advertising and product
promotions, direct mail and other marketing costs.

General and administrative. General and administrative expense consists primarily of executive, finance and human

resource salaries, stock based compensation, legal and accounting fees, information technology expense, intangible asset
amortization expense and insurance expense.

Research and development. Research and development expense includes costs associated with the design, development,

testing, enhancement and regulatory approval of our products, principally salaries, laboratory testing and supply costs. It also
includes costs associated with design and execution of clinical studies, regulatory submissions and costs to register, maintain, and
defend our intellectual property, and royalty payments associated with licensed and acquired intellectual property.

Other income (expense). Other income (expense) primarily includes interest income and expense, 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 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.

Results of Operations

Comparison of the year ended December 31, 2019 to the year ended December 31, 2018

The following tables set forth, for the periods indicated, our results of operations and the change between the specified

periods expressed as a percentage increase or decrease:

2019

2018

$ Change

Percent
change

Net sales ................................................................... $

117,232 $

($ in thousands)
105,568 $

11,664

Net sales by geography:

Americas .............................................................. $
Europe, Middle East and Africa ...........................
Asai/Pacific Rim ..................................................
Total ..................................................................... $

69,359 $
39,480
8,393
117,232 $

63,649 $
35,319
6,600
105,568 $

5,710
4,161
1,793
11,664

11%

9%
12%
27%
11%

Net sales. Net sales increased 11% or $11.7 million to $117.2 million for the year ended December 31, 2019, compared to

$105.6 million for the year ended December 31, 2018. Sales increases were primarily driven by increased sales of our
embolectomy catheters of $4.3 million, of which $3.4 million was from our late 2018 acquisition of Syntel and Python products;
valvulotomes of $1.6 million, of which $1.2 million was from our Tru-Incise and Chevalier acquisitions in 2019 and 2018,
respectively; and polyester grafts of $1.5 million, of which $0.4 million was from Cardial products acquired in late 2018. We also
had an increase in human tissue cryopreservation service revenues from our RestoreFlow allograft business of $1.4 million. Our
recently acquired CardioCel and VascuCel products contributed combined sales of $1.2 million in 2019. These and other product
line increases were partially offset by decreased sales of powered phlebectomy systems of $0.8 million.

Direct-to-hospital net sales were 94% for the year ended December 31, 2019 and 95% for the year ended December 31,

2018.

Net sales by geography. Net sales in the Americas increased $5.7 million or 9% for the year ended December 31, 2019. The

increase was primarily driven by increased sales of embolectomy catheters of $2.6 million, in part due to our acquisition of the
Syntel embolectomy catheters, and increased human tissue cryopreservation services of $1.4 million related to our RestoreFlow
allograft business. We also increased sales of valvulotomes by $1.1 million, and our recently acquired CardioCel and VascuCel
products contributed sales of $0.9 million in the Americas in 2019. These increases were partially offset by decreased sales of
powered phlebectomy systems of $0.8 million.

Europe, Middle East and Africa net sales increased $4.2 million or 12% for the year ended December 31, 2019. The
increase was primarily driven by increased sales of polyester grafts of $1.3 million, embolectomy catheters of $0.8 million, OEM
sales of $0.7 million, valvulotomes of $0.6 million and biosynthetic vascular grafts of $0.4 million.

Asia/Pacific Rim net sales increased $1.8 million or 27% for the year ended December 31, 2019. The increase was driven
by increased sales of embolectomy catheters of $0.9 million, closure systems of $0.3 million, occlusion catheters of $0.2 million
and biologic vascular patches of $0.2 million. These and other increases were offset in part by decreased sales of valvulotomes of
$0.1 million.

Gross profit ..................................................... $

79,853

($ in thousands)
73,939

5,914

2019

2018

Change

Gross margin ...................................................

68.1%

70.0%

(1.9%)

Percent
change

* Not applicable

Gross Profit. Gross profit increased $5.9 million to $79.9 million for the year ended December 31, 2019, while gross
margin decreased by 190 basis points to 68.1% in the period. The gross margin was favorably impacted by higher average selling
prices across most product lines, as well manufacturing efficiencies. These increases were more than offset, however, by an
unfavorable product mix, including recently acquired products which typically have a lower gross margin prior to being integrated
into our Burlington manufacturing operations. Foreign exchange rate changes also had an unfavorable impact.

2019

2018

$ change

Percent
change

2019 as a
%

2018 as a
%

of Net Sales of Net Sales

Sales and marketing ........................ $
General and administrative ..............
Research and development ..............
Gain on divestures and

30,339 $
19,055
9,276

27,318 $
17,689
8,197

($ in thousands)
3,021
1,366
1,079

acquisitions ..................................
$

-
58,670 $

(7,474)
45,730 $

7,474
12,940

11%
8%
13%

*
28%

26%
16%
8%

0%
50%

26%
17%
8%

*
43%

* Not a meaningful percentage.

Sales and marketing. For the year ended December 31, 2019, sales and marketing expense increased $3.0 million, or 11%,

to $30.3 million. The increase was primarily driven by higher personnel costs, including compensation, commissions and travel
expenses associated with expanding our sales force. We also had higher costs due to the implementation of customer relationship
software. As a percentage of net sales, sales and marketing expense was 26% in both 2019 and 2018.

General and administrative. For the year ended December 31, 2019, general and administrative expense increased $1.4

million, or 8%, to $19.1 million. General and administrative expense increases were primarily related to acquisition-related costs
including amortization of intangible assets, professional fees, bank and credit card fees, bad debt expense and facilities costs. As a
percentage of net sales, general and administrative expense was 16% for 2019 and 17% for 2018.

Research and development. For the year ended December 31, 2019, research and development expense increased $1.1

million, or 13%, to $9.3 million. Product development and process engineering increased $0.8 million on a combined basis, in
large part due to transitioning certain acquired products to our Burlington manufacturing operations. Clinical and regulatory
expenses increased $0.3 million, related to regulatory submissions for new products in geographies such as China and Japan, and
testing related to our biologic product offerings.

Gain on divestitures and acquisitions. The 2018 gains on divestitures and acquisitions relate to the sale of our Reddick
cholangiogram catheter and Reddick-Saye screw product lines to Symmetry Surgical, which resulted in a gain of $5.9 million, and
also to our purchase of the assets of Cardial, from Becton Dickinson, which resulted in a gain of $1.6 million.

Other income (expense). Interest income was $0.7 million and $0.6 million, respectively for 2019 and 2018. Foreign
exchange losses on settlements or remeasurement of receivables and payables denominated in foreign currencies were $0.2
million and $0.4 million in 2019 and 2018, respectively.

Income tax expense. We recorded a provision for taxes of $3.7 million on pre-tax income of $21.7 million in 2019 as

compared to $5.5 million on pre-tax income of $28.4 million in 2018. The 2019 provision was comprised of a federal tax
provision in the United States of $2.0 million, a state tax provision of $0.4 million, and a foreign tax provision of $1.3 million.
The 2018 provision was comprised of a federal tax provision in the United States of $2.8 million, a state tax provision of $0.5
million and a foreign tax provision of $2.2 million. Our effective tax rate differed from the U.S. statutory tax rate in 2019
principally because of stock option exercises, taxes on foreign earnings, valuation allowances, and certain permanent differences.
While it is often difficult to predict the final outcome or timing of the resolution of any particular tax matter, we believe that 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,
2019, we have provided a valuation allowance of $1.4 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.

Refer to Note 8 to our consolidated financial statements for additional information about income tax expense (benefit)

including information related to U.S. tax reform legislation.

Comparison of the year ended December 31, 2018 to the year ended December 31, 2017

The following tables set forth, for the periods indicated, our results of operations and the change between the specified

periods expressed as a percentage increase or decrease:

2018

2017

$ Change

($ in thousands)

Percent
change

Net sales ........................................................... $

105,568 $

100,867 $

4,701

Net sales by geography:

Americas ...................................................... $
Europe, Middle East and Africa ...................
Asai/Pacific Rim ..........................................
Total ............................................................. $

63,649 $
35,319
6,600
105,568 $

62,696 $
32,516
5,655
100,867 $

953
2,803
945
4,701

2%
9%
17%
5%

Net sales. Net sales increased 5% or $4.7 million to $105.6 million for the year ended December 31, 2018, compared to
$100.9 million for the year ended December 31, 2017. Sales increases were primarily driven by increased sales of our biologic
vascular patches of $1.7 million, carotid shunts of $1.2 million, embolectomy catheters of $1.2 million, of which $0.8 million was
from our recent Syntel acquisition, and valvulotomes of $0.6 million. We also had an increase in human tissue cryopreservation
service revenues from our RestoreFlow allograft business of $1.2 million. These and other product line increases were partially
offset by decreased sales of $1.1 million due to the divestiture of our Reddick cholangiogram catheter product in early Q2 2018
and decreased sales of our closure systems of $0.7 million.

Direct-to-hospital net sales were 95% for the year ended December 31, 2018 and 93% for the year ended December 31,

2017.

Net sales by geography. Net sales in the Americas increased $1.0 million for the year ended December 31, 2018. The
increase was primarily driven by increased human tissue cryopreservation services of $1.2 million. We also had increased sales of
embolectomy catheters of $0.7 million, in part due to our acquisition of Syntel, as well as increased sales of valvulotomes, carotid
shunts and biologic vascular patches of $0.5 million each. These increases were partially offset by decreases in sales associated
with the divestiture of the Reddick product line of $1.2 million, as well as lower sales of radiopaque tape of $0.5 million and
closure systems of $0.4 million.

Europe, Middle East and Africa net sales increased $2.8 million for the year ended December 31, 2018. The increase was

primarily driven by increased sales of biologic vascular patches of $1.1 million, polyester grafts of $0.4 million, embolectomy
catheters of $0.3 million and carotid shunts of $0.2 million. We also had sales of surgical glue of $0.6 million in connection with
our recent Cardial acquisition.

Asia/Pacific Rim net sales increased $0.9 million for the year ended December 31, 2018. The increase was primarily driven

by increased sales of carotid shunts of $0.5 million, and embolectomy and occlusion catheters of $0.2 million each, and
valvulotomes of $0.1 million each. These increases were offset in part by decreased sales of closure systems to China.

Gross profit ..................................................... $

73,939

($ in thousands)
70,697

3,242

2018

2017

Change

Gross margin ...................................................

70.0%

70.1%

(0.1%)

Percent
change

* Not applicable

Gross Profit. Gross profit increased $3.2 million to $73.9 million for the year ended December 31, 2018, while gross
margin decreased by 10 basis points to 70.0% in the period. The gross margin was favorably impacted by higher average selling
prices across most product lines, a more favorable product mix, including increased sales of our biologic patch products, and the
favorable impact from changes in foreign exchange rates. These increases were offset, however, by manufacturing inefficiencies
as well as higher manufacturing overhead costs experienced for certain of our product lines.

2018

2017

$ change

Percent
change

2018 as a
%

2017 as a
%

of Net Sales of Net Sales

Sales and marketing ........................ $
General and administrative ..............
Research and development ..............
Gain on divestures and

27,318 $
17,689
8,197

25,948 $
17,010
6,636

($ in thousands)
1,370
679
1,561

5%
4%
24%

26%
17%
8%

acquisitions ..................................
$

(7,474)
45,730 $

-
49,594 $

(7,474)
(3,864)

*
(8%)

(7%)
43%

26%
17%
7%

*
49%

* Not a meaningful percentage.

Sales and marketing. For the year ended December 31, 2018, sales and marketing expense increased $1.4 million, or 5%,
to $27.3 million. The increase was primarily driven by higher personnel costs, including compensation, recruiting, sales meeting
and travel expenses associated with expanding the sales force. As a percentage of net sales, sales and marketing expense was 26%
in both 2018 and 2017.

General and administrative. For the year ended December 31, 2018, general and administrative expense increased $0.7

million, or 4%, to $17.7 million. General and administrative expense increases were primarily related to compensation costs,
professional fees and travel expense, offset in part by lower acquisition-related costs and facilities costs. The compensation
expense increase in 2018 was in part due to the January 1, 2018 reinstatement of our Chief Executive Officer’s compensation,
which he had forgone (except as to the amount legally required) for the last seven months of 2017. As a percentage of net sales,
general and administrative expense was 17% for both 2018 and 2017.

Research and development. For the year ended December 31, 2018, research and development expense increased $1.6

million, or 24%, to $8.2 million. Clinical and regulatory expenses increased $1.0 million and product development expense
increased $0.6 million. These increases were primarily related to regulatory submissions for new products in geographies such as
China and Japan, and testing related to our biologic product offerings.

Gain on divestitures and acquisitions. On April 5, 2018, we entered into an asset purchase agreement with Specialty

Surgical Instrumentation, Inc. to sell the inventory, intellectual property and other assets associated with our Reddick
cholangiogram catheter and Reddick-Saye screw product lines for $7.4 million. During the three months ended June 30, 2018 we
recorded a gain in connection with these agreements of $5.9 million. On October 22, 2018, we entered into an agreement to
acquire the assets of Cardial, a subsidiary of Becton Dickinson, whose business consists of the manufacture and sale of polyester
vascular grafts, valvulotomes and surgical glue, for a purchase price of €1.2 million ($1.4 million). In connection with this asset
purchase, we simultaneously entered into an agreement to purchase Cardial’s land and building for €0.8 million ($0.9 million),
bringing the total price paid to €2.0 million ($2.3 million). During the three months ended December 31, 2018 we recorded a
bargain purchase gain of €1.4 million ($1.6 million) in connection with these agreements resulting from the excess value of the
assets acquired over the purchase price, subject to finalization of the purchase accounting.

Other income (expense). Interest income was $0.6 million and $0.2 million, respectively for 2018 and 2017. Foreign
exchange losses on settlements or remeasurement of receivables and payables denominated in foreign currencies were $0.4
million and $0.2 million in 2018 and 2017, respectively.

Income tax expense. We recorded a provision for taxes of $5.5 million on pre-tax income of $28.4 million in 2018 as

compared to $3.9 million on pre-tax income of $21.1 million in 2017. The 2018 provision was comprised of a federal tax
provision in the United States of $2.8 million, a state tax provision of $0.5 million, and a foreign tax provision of $2.2 million.
The 2017 provision was comprised of a federal tax provision in the United States of $2.2 million, a state tax provision of $0.7
million and a foreign tax provision of $1.0 million. Our effective tax rate differed from the U.S. statutory tax rate in 2018
principally because of stock option exercises, taxes on foreign earnings, valuation allowances, and certain permanent differences.
While it is often difficult to predict the final outcome or timing of the resolution of any particular tax matter, we believe that 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,
2018, we have provided a valuation allowance of $1.3 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.

Refer to Note 8 to our consolidated financial statements for additional information about income tax expense (benefit)

including information related to U.S. tax reform legislation.

Liquidity and Capital Resources

At December 31, 2019, we held $11.8 million in cash and cash equivalents and $20.9 million in a short-term managed

income mutual fund investment, as compared to $26.3 million in cash and cash equivalents and $21.7 million in the mutual fund
investment at December 31, 2018. Our cash and cash equivalents are highly liquid investments with maturities of 90 days or less
at the date of purchase, consist of money market funds, and are stated at cost, which approximates fair value. Our short-term
marketable securities consist of a managed income mutual fund investing mainly in short-term investment grade, U.S.-dollar
denominated fixed and floating-rate debt. All of our cash held outside of the United States is available for corporate use, with the
exception of $3.3 million held by subsidiaries in jurisdictions for which earnings are planned to be permanently reinvested.

On February 14, 2019, our Board of Directors authorized the repurchase of up to $10.0 million of the Company’s common

stock through transactions on the open market, in privately negotiated purchases or otherwise until February 14, 2020. On
February 13, 2020, the Board extended the term of this repurchase program to February 14, 2021. The repurchase program may be
suspended or discontinued at any time. To date we have not made any repurchases under this program.

Operating and Capital Expenditure Requirements

We require cash to pay our operating expenses, make capital expenditures, and pay our long-term liabilities. Since our
inception, we have funded our operations through public offerings and private placements of equity securities, short-term and
long-term borrowings, and funds generated from our operations.

We recognized operating income of $21.2 million for the year ended December 31, 2019, $28.2 million for the year ended

December 31, 2018, and $21.1 million for the year ended December 31, 2017. We expect to fund any increased costs and
expenditures from our existing cash and cash equivalents, though our future capital requirements depend on numerous factors.
These factors include, but are not limited to, the following:

•

the revenues generated by product sales;

payments associated with potential future quarterly cash dividends to our common stockholders;

payments associated with our stock repurchase program;

future acquisition-related payments;

payments associated with U.S income and other taxes;

the costs associated with expanding our manufacturing, marketing, sales, and distribution efforts;

the costs associated with our initiatives to sell direct-to-hospital in new countries;

the costs of obtaining and maintaining FDA and other regulatory clearances of our existing and future products; and

the number, timing, and nature of acquisitions and other strategic transactions.

Our cash balances may decrease as we continue to use cash to fund our operations, make acquisitions, make payments
under our quarterly dividend program, repurchase shares of our common stock and make deferred payments related to prior
acquisitions. We believe that our cash, cash equivalents, investments and the interest we earn on these balances will be sufficient
to meet our anticipated cash requirements for at least the next twelve months. If these sources of cash are insufficient to satisfy our
liquidity requirements beyond the next twelve months, we may seek to sell additional equity or debt securities or borrow funds
from, or establish a revolving credit facility, with a financial institution. The sale of additional equity and debt securities may
result in dilution to our stockholders. If we raise additional funds through the issuance of debt securities, such securities could
have rights senior to those of our common stock and could contain covenants that would restrict our operations and possibly our
ability to pay dividends. We may require additional capital beyond our currently forecasted amounts. Any such required additional
capital may not be available on reasonable terms, if at all.

Cash Flows

2019

Year ended December 31,
2018
($ in thousands)

2017

Cash and cash equivalents .................... $

11,786 $

26,318 $

19,096

Cash flows provided by (used in):

Operating activities ....................... $
Investing activities.........................
Financing activities .......................

14,179 $
(24,100)
(4,622)

19,506 $
(7,055)
(4,416)

22,868
(28,958)
80

Net cash provided by operating activities. Net cash provided by operating activities was $14.2 million for the year ended

December 31, 2019, and consisted of $17.9 million net income, adjusted for non-cash items of $10.1 million (including primarily
depreciation and amortization of $5.4 million, stock-based compensation of $2.6 million, provisions for inventory write-offs and
doubtful accounts of $1.1 million, a provision for deferred taxes of $0.8 million and fair value adjustments on contingent
consideration for acquisitions of $0.2 million, as well as working capital uses of $13.9 million. The net cash used for working
capital was driven by increases in inventory of $11.3 million, accounts receivable of $1.3 million, and other current assets of $0.7
million, as well as a decrease in accounts payable and other liabilities of $0.6 million.

Net cash provided by operating activities was $19.5 million for the year ended December 31, 2018, and consisted of $22.9

million net income, adjusted for non-cash items of $1.7 million (including primarily depreciation and amortization of $4.3 million,
stock-based compensation of $2.3 million, provisions for inventory write-offs and doubtful accounts of $1.0 million, a benefit for
deferred taxes of $2.2 million and gains on acquisitions and divestitures of $7.5 million), as well as working capital uses of $1.7
million. The net cash used for working capital was driven by increases in accounts receivable of $1.3 million, inventory of $4.3
million and other current assets of $0.4 million, offset by an increase in accounts payable and other liabilities of $4.3 million.

Net cash provided by operating activities was $22.9 million for the year ended December 31, 2017, and consisted of $17.2

million net income, adjusted for non-cash items of $7.3 million (including primarily depreciation and amortization of $4.1 million,
stock-based compensation of $2.3 million, provisions for inventory write-offs and doubtful accounts of $0.6 million, and a
provision for deferred taxes of $0.3 million), as well as working capital uses of $1.6 million. The net cash used for working capital
was driven by increases in accounts receivable of $1.5 million, inventory of $1.3 million and other current assets of $0.3 million,
offset by an increase in accounts payable and other liabilities of $1.5 million.

Net cash used in investing activities. Net cash used in investing activities was $24.1 million for the year ended

December 31, 2019, driven by cash paid for acquisitions of $21.2 million, as well as purchases of property and equipment of $3.8
million primarily associated with clean room build-outs at our Burlington, Massachusetts headquarters. These investments were in
part offset by net sales of short-term investments of $0.9 million.

Net cash used in investing activities was $7.1 million for the year ended December 31, 2018, driven by cash paid for
acquisitions of $12.3 million, as well as purchases of property and equipment of $3.1 million primarily associated with clean room
build-outs at our Burlington, Massachusetts headquarters. These investments were in part offset by proceeds from the Reddick
divestiture of $7.4 million and net sales of short-term investments of $0.9 million.

Net cash used in investing activities was $29.0 million for year ended December 31, 2017, driven by a $22.5 million
purchase of a short-term investment, as well as purchases of property and equipment of $6.4 million primarily associated with the
clean room build-outs at our Burlington, Massachusetts headquarters.

Net cash provided by (used in) financing activities. Net cash used in financing activities was $4.6 million for the year
ended December 31, 2019, driven primarily by payments of common stock dividends of $6.7 million and payments related to our
prior acquisitions of $2.1 million. We had proceeds from stock option exercises of $4.9 million, offset by the acquisition of $0.7
million of treasury shares to cover minimum withholding taxes on restricted stock unit vestings.

Net cash used in financing activities was $4.4 million for the year ended December 31, 2018, driven primarily by payments
of common stock dividends of $5.4 million and payments related to our prior acquisitions of $1.2 million. We had proceeds from
stock option exercises of $3.0 million, offset by the acquisition of $0.7 million of treasury shares to cover minimum withholding
taxes on restricted stock unit vestings.

Net cash provided by financing activities was $0.1 million for the year ended December 31, 2017, driven primarily by

proceeds from stock option exercises of $5.5 million, offset by the acquisition of $0.8 million of treasury shares to cover
minimum withholding taxes on restricted stock unit vestings and by payments of common stock dividends of $4.2 million. We
also made payments related to our prior acquisitions of $0.4 million.

Dividends. In February 2011, our Board of Directors approved a policy for the payment of quarterly cash dividends on our
common stock. Future declarations of quarterly dividends and the establishment of future record and payment dates are subject to
approval by our Board of Directors on a quarterly basis. The dividend activity for the periods presented is as follows:

Record Date

Payment Date

Per Share Amount Dividend Payment

(in thousands)

Fiscal Year 2019

March 22, 2019
May 22, 2019
August 21, 2019
November 20, 2019

April 5, 2019 $
June 6, 2019 $
September 5, 2019 $
December 5, 2019 $

Fiscal Year 2018

March 22, 2018
May 22, 2018
August 22, 2018
November 20, 2018

April 5, 2018 $
June 7, 2018 $
September 6, 2018 $
December 6, 2018 $

0.085 $
0.085 $
0.085 $
0.085 $

0.070 $
0.070 $
0.070 $
0.070 $

1,672
1,672
1,691
1,701

1,351
1,353
1,369
1,372

On February 13, 2020, our Board of Directors approved a quarterly cash dividend on our common stock of $0.095 per share

payable on March 19, 2020, to stockholders of record at the close of business on March 3, 2020, which will total approximately
$1.9 million.

Contractual obligations. Our principal contractual obligations consist of operating leases and inventory purchase

commitments. The following table summarizes our commitments under operating leases as of December 31, 2019:

Contractual obligations

Total

1 Year
or Less

2-3
years
(in thousands)

3-4
years

5 or

More Years

Operating leases ............................................. $

20,272 $

2,419 $

4,292 $

3,259 $

10,301

Inventory purchase commitments................... $

1,465 $

- $

The commitments under our operating leases consist primarily of lease payments for our corporate headquarters and
manufacturing facility in Burlington, Massachusetts, expiring in 2030, our Sulzbach, Germany office, expiring in 2023, our
Hereford, England office, expiring in 2029, our Vaughan, Canada office expiring in 2023, our Tokyo, Japan office, expiring in
2022; and our Shanghai, China office, expiring in 2020. They also include automobile leases. See Note 7 for additional
information on these leases.

We also have inventory purchase commitments of approximately $1.5 million as of December 31, 2019. These

commitments are for product used in operations in the normal course of business and do not represent excess commitments or loss
contracts.

Critical Accounting Policies and Estimates

We have adopted various accounting policies to prepare our consolidated financial statements in accordance with U.S.

generally accepted accounting principles (GAAP). Our most significant accounting policies are described in Note 1 to our
consolidated financial statements included elsewhere in this Annual Report on Form 10-K. The preparation of our consolidated
financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the amounts reported in
our consolidated financial statements and accompanying notes. Our estimates and assumptions, including those related to bad
debts, inventories, intangible assets, sales returns and discounts, and income taxes are reviewed on an ongoing basis and updated
as appropriate. Actual results could differ from those estimates.

Certain of our more critical accounting policies require the application of significant judgment by management in selecting
the appropriate assumptions for calculating financial estimates. By their nature, these judgments are subject to an inherent degree
of uncertainty. These judgments are based on our historical experience, terms of existing contracts, and observance of trends in
the industry, as appropriate. Different, reasonable estimates could have been used in the current period. Additionally, changes in
accounting estimates are reasonably likely to occur from period to period. Both of these factors could have a material impact on
the presentation of our financial condition, changes in financial condition, or results of operations.

We believe that the following financial estimates and related accounting policies are both important to the portrayal of our

financial condition and results of operations and require subjective or complex judgments. Further, we believe that the items
discussed below are properly recorded in our consolidated financial statements for all periods presented. Management has
discussed the development, selection and disclosure of our most critical financial estimates with the audit committee of our board
of directors and our independent registered public accounting firm. The judgments about those financial estimates are based on
information available as of the date of our consolidated financial statements. Those financial estimates and related policies
include:

Revenue Recognition

Our revenue is derived primarily from the sale of disposable or implantable devices used during vascular surgery. We sell

primarily directly to hospitals, and to a lesser extent to distributors. We also occasionally enter into consigned inventory
arrangements with either hospitals or distributors on a limited basis. Following our acquisition of the RestoreFlow allograft
business, we also derive revenues from human tissue cryopreservation services. These service revenues are recognized when
services have been provided and the tissue has been shipped to the customer, provided all other revenue recognition criteria
discussed below have been met.

On January 1, 2018 we adopted the provisions of ASU 2014-09, Revenue from Contracts with Customers (Topic 606). We
used the modified retrospective method of adoption under which the comparative information was not restated and will continue
to be reported under the standard in effect for those periods. The adoption of this standard was not material to our financial
statements and there was no cumulative effect adjustment to the opening balance of retained earnings required. The core principle
of Topic 606 is that an entity should recognize revenue to depict the transfer of goods or services to customers in an amount that
reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard explains
that to achieve the core principle, an entity should take the following actions:

Step 1: Identify the contract with a customer

Step 2: Identify the performance obligations in the contract

Step 3: Determine the transaction price

Step 4: Allocate the transaction price

Step 5: Recognize revenue when or as the entity satisfies a performance obligation

Revenue is recognized when or as a company satisfies a performance obligation by transferring a promised good or service

to a customer (which is when the customer obtains control of that good or service). In instances in which shipping and handling
activities are performed after a customer takes control of the goods (such as when title passes upon shipment from our dock), we
have made the policy election allowed under Topic 606 to account for these activities as fulfillment costs and not as performance
obligations.

We generally reference customer purchase orders to determine the existence of a contract. Orders that are not accompanied
by a purchase order are confirmed with the customer in writing or verbally. The purchase orders or similar correspondence, once
accepted, identify the performance obligations as well as the transaction price, and otherwise outline the rights and obligations of
each party. We allocate the transaction price of each contract among the performance obligations in accordance with the pricing of
each item specified on the purchase order, which is in turn based on standalone selling prices per our published price lists. In cases
where we discount products or provide certain items free of charge, we allocate the discount proportionately to all performance
obligations, unless it can be demonstrated that the discount should be allocated entirely to one or more, but not all, of the
performance obligations.

We recognize revenue, net of allowances for returns and discounts, fees paid to group purchasing organizations, and any
sales and value added taxes required to be invoiced, which we have elected to exclude from the measurement of the transaction
price as allowed by the standard, at the time of shipment (taking into consideration contractual shipping terms), or in the case of
consigned inventory, when it is consumed. Shipment is the point at which control of the product and title passes to our customers,
and at which LeMaitre has a present right to receive payment for the goods.

Below is a disaggregation of our revenue by major geographic area, which is one of the primary categorizations used by

management in evaluating financial performance, for the periods indicated (in thousands):

Year ended December 31,

2019

2018

Americas ..................................................... $
Europe, Middle East and Africa .................. $
Asia/Pacific Rim ......................................... $
Total ........................................................ $

69,359 $
39,480
8,393
117,232 $

63,649
35,319
6,600
105,568

Except as discussed in Note 6 to our consolidated financial statements, we do not carry any contract assets or contract

liabilities, as there are generally no unbilled amounts due from customers under contracts for which we have partially satisfied
performance obligations, or amounts received from customers for which we have not satisfied performance obligations. We
satisfy our performance obligations under revenue contracts within a short time period from receipt of the orders, and payments
from customers are typically received within 30 to 60 days of fulfillment of the orders, except in certain geographies such as
Spain and Italy where the payment cycle is customarily longer. Accordingly, there is no significant financing component to our
revenue contracts. Additionally, we have elected as a policy that incremental costs (such as commissions) incurred to obtain
contracts are expensed as incurred, due to the short-term nature of the contracts.

Customers returning products may be entitled to full or partial credit based on the condition and timing of the return. To be
accepted, a returned product must be unopened (if sterile), unadulterated, and undamaged, must have at least 18 months remaining
prior to its expiration date, or twelve months for our hospital customers in Europe, and generally be returned within 30 days of
shipment. These return policies apply to sales to both hospitals and distributors. The amount of products returned to us, either for
exchange or credit, has not been material. Nevertheless, we provide for an allowance for future sales returns based on historical
return experience, which requires judgment. Our cost of replacing defective products has not been material and is accounted for at
the time of replacement.

Accounts Receivable

Our accounts receivable are with customers based in the United States and internationally. Accounts receivable generally
are due within 30 to 90 days of invoice and are stated at amounts due from customers, net of an allowance for doubtful accounts
and sales returns, other than in certain European markets where longer payment terms are customary and may range from 90 to
240 days. We perform ongoing credit evaluations of the financial condition of our customers and adjust credit limits based upon
payment history and the current creditworthiness of the customers, as determined by a review of their current credit information.
We continuously monitor aging reports, collections, and payments from customers, and maintain a provision for estimated credit
losses based upon historical experience and any specific customer collection issues we identify.

We closely monitor outstanding receivables for potential collection risks, including those that may arise from economic

conditions, in both the U.S. and international economies. Our European sales to government-owned or supported customers such
as hospitals, distributors and agents in Italy and Spain may be subject to significant payment delays due to government austerity
measures impacting funding and payment practices. As of December 31, 2019 our receivables in Italy and Spain totaled $1.0
million and $0.8 million, respectively. Receivables balances with certain publicly-owned hospitals and government supported
customers in these countries can accumulate over a period of time and then subsequently be settled as large lump sum payments.
While we believe our allowance for doubtful accounts in these countries is adequate as of December 31, 2019, if significant
changes were to occur in Italy’s or Spain’s payment practices or if government funding becomes unavailable, we may not be able
to collect on receivables due to us from these customers and our write offs of uncollectible amounts may increase.

We write off accounts receivable when they become uncollectible. While such credit losses have historically been within

our expectations and allowances, we cannot guarantee the same credit loss rates will be experienced in the future. The allowance
for doubtful accounts is our best estimate of the amount of probable credit losses in our existing accounts receivable. We review
our allowance for doubtful accounts on a monthly basis and all past due balances are reviewed individually for collectability. The
provision for the allowance for doubtful accounts is recorded in general and administrative expenses.

Inventory and Other Deferred Costs

Inventory consists of finished products, work-in-process, and raw materials. We value inventory at the lower of cost or
market value. Cost includes materials, labor, and manufacturing overhead and is determined using the first-in, first-out (FIFO)
method. On a quarterly basis, we review inventory quantities on hand and analyze the provision for excess and obsolete inventory
based primarily on product expiration dating and our estimated sales forecast, which is based on sales history and anticipated
future demand. Our estimates of future product demand may not be accurate, and we may understate or overstate the provision
required for excess and obsolete inventory. Accordingly, any significant unanticipated changes in demand could have a significant
impact on the value of our inventory and results of operations.

In connection with our RestoreFlow allograft business, other deferred costs include costs incurred for the preservation of

human vascular tissues available for shipment, tissues currently in active processing, and tissues held in quarantine pending
release to implantable status. By federal law human tissues cannot be bought or sold. Therefore, the tissues we preserve are not
held as inventory, and the costs we incur to procure and process human vascular tissues are instead accumulated and deferred.

Stock-based Compensation

We recognize, as expense, the estimated fair value of stock options to employees which is determined using the Black-

Scholes option pricing model. We have elected to recognize the compensation cost of all share-based awards on a straight-line
basis over the vesting period of the award. In periods that we grant stock options, fair value assumptions are based on volatility,
interest rates, dividend yield, and expected term over which the stock options will be outstanding. The computation of expected
volatility is based on the historical volatility of the company’s stock. The interest rate for periods within the contractual life of the
award is based on the U.S. Treasury risk-free interest rate in effect at the time of grant. Historical data on exercise patterns is the
basis for estimating the expected life of an option. The expected annual dividend rate was calculated by dividing our annual
dividend, based on the most recent quarterly dividend rate, by the closing stock price on the grant date.

We also issue restricted stock units (RSUs) as an additional form of equity compensation to our employees, officers, and

directors, pursuant to our stockholder-approved Second Amended and Restated 2006 Stock Option and Incentive Plan. RSUs
entitle the grantee to an issuance of stock at no cost and generally vest over a period of time determined by our Board of Directors
at the time of grant based upon the continued service to the company. The fair market value of the award is determined based on
the number of RSUs granted and the market value of our common stock on the grant date and is amortized to expense over the
period of vesting. Unvested RSUs are forfeited and canceled as of the date that employment or service to the company terminates.
RSUs are settled in shares of our common stock upon vesting. We may repurchase common stock upon our employees’ vesting in
RSUs in order to cover any minimum tax withholding liability as a result of the RSUs having vested.

As disclosed more fully in the notes to our consolidated financial statements, we recorded expense of approximately $2.6

million in connection with share-based payment awards for the year ended December 31, 2019. The future expense of non-vested
share-based awards of approximately $10.4 million is to be recognized over a weighted-average period of 3.8 years. During 2019,
we granted stock options at a weighted average fair value of $12.51 and RSUs with weighted average fair value of $35.11. Share-
based compensation charges are recorded across the consolidated statement of operations based upon the grantee’s primary
function.

Valuation of Goodwill, and Other Intangibles

Goodwill represents the amount of consideration paid in connection with business acquisitions in excess of the fair value of

assets acquired and liabilities assumed. Goodwill is evaluated for impairment annually or more frequently if indicators of
impairment are present or changes in circumstances suggest that an impairment may exist. Our assessment is performed as of
December 31 each year based on a single reporting unit. We first perform an assessment of qualitative factors to determine if it is
“more likely than not” that the fair value of our reporting unit is less than its carrying value as a basis for determining whether it is
necessary to perform the two-step goodwill impairment test. The “more likely than not” threshold is defined as having a
likelihood of more than 50 percent. If required, the next step of the goodwill impairment test is to determine the fair value of the
reporting unit. The implied fair value of goodwill is determined on the same basis as the amount of goodwill recognized in
connection with a business combination. Specifically, the fair value of a reporting unit is allocated to all of the assets and
liabilities (including any unrecognized intangible assets) as if the reporting unit had been acquired in a business combination as of
the date of the impairment review and as if the fair value of the reporting unit was the price paid to acquire the reporting unit. The
excess of the fair value of a reporting unit over the amounts assigned to its assets and liabilities is the implied fair value of
goodwill. If the carrying amount of the reporting unit goodwill exceeds the implied fair value of that goodwill, an impairment loss

shall be recognized in an amount equal to that excess. Goodwill was $40.0 million and $29.9 million as of December 31, 2019 and
2018, respectively. Our annual impairment testing indicated no significant risk of impairment based upon changes in value that
are reasonably likely to occur. However, changes in these estimates and assumptions could materially affect the estimated fair
value of our reporting unit.

Other intangible assets consist primarily of purchased developed technology, patents, customer relationships and

trademarks, and are amortized over their estimated useful lives, ranging from 2 to 16 years. We review intangible assets quarterly
to determine if any adverse conditions exist for a change in circumstances has occurred that would indicate impairment.
Conditions that may indicate impairment include, but are not limited to, a significant adverse change in legal factors or business
climate that could affect the value of the asset, a change in the operating cash flows associated with the asset, or adverse action or
assessment by a regulator. If an impairment indicator exists we test the intangible asset for recoverability. If the carrying value of
the intangible asset exceeds the undiscounted cash flows expected to result from the use and eventual disposition of the intangible
asset, we will write the carrying value down to the fair value in the period in which it is identified. We generally calculate the fair
value of our intangible assets as the present value of estimated future cash flows we expect to generate from the asset using a risk-
adjusted discount rate. In determining our estimated future cash flows associated with our intangible assets, we use estimates and
assumptions about future revenue contributions, cost structures, and remaining useful lives of the asset. These estimates and
assumptions require significant judgment and actual results may differ from assumed or estimated amounts. Other intangible
assets, net of accumulated amortization, were $24.9 million as of December 31, 2019 and $13.7 million as of December 31, 2018.

Contingencies

In the normal course of business, we are subject to proceedings, lawsuits, and other claims and assessments for matters
related to, among other things, business acquisitions, employment, commercial matters, intellectual property matters, product
liability and product recalls. We assess the likelihood of any adverse judgments or outcomes to these matters as well as potential
ranges of probable losses. A determination of the amount of reserves required, if any, for these contingencies is made after careful
analysis of each individual issue. The required reserves may change in the future due to new developments in each matter or
changes in approach such as a change in settlement strategy in dealing with these matters. We record charges for the costs we
anticipate incurring in connection with litigation and claims against us when we determine a loss is probable and we can
reasonably estimate these costs. During the years ended December 31, 2019, 2018, and 2017, we were not subject to any material
litigation, claims or assessments.

Income Taxes

We account for income taxes under the asset and liability method of accounting for income taxes. Under the asset and
liability method, deferred taxes are determined based on the difference between the financial reporting and tax bases of assets and
liabilities using enacted tax rates in effect in the years in which the differences are expected to reverse. The provision for income
taxes includes taxes currently payable and deferred taxes resulting from the tax effects of temporary differences between the
financial statement and tax bases of assets and liabilities. We maintain valuation allowances where it is more likely than not that
all or a portion of a deferred tax asset will not be realized. Changes in the valuation allowances are included in our tax provision in
the period of change. In determining whether a valuation allowance is warranted, we evaluate factors such as prior earnings
history, expected future earnings, carry-back and carry-forward periods and tax strategies that could potentially enhance the
likelihood of the realization of a deferred tax asset.

We recognize, measure, present and disclose in our financial statements, uncertain tax positions that we have taken or

expect to take on a tax return. We recognize in our financial statements the impact of tax positions that meet a “more likely than
not” threshold, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a
position are measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate
settlement.

Our policy is to classify interest and penalties related to unrecognized tax benefits as income tax expense.

Recent Accounting Pronouncements

On January 1, 2019 we adopted the provisions of ASU No. 2016-02, Leases (Topic 842), subsequently amended by ASU

2018-11, Leases (Topic 842): Targeted Improvements. Under the new guidance, we are required to recognize the following for all
leases (with the exception of short-term leases) at the commencement date: a lease liability, which is a lessee’s obligation to make
lease payments arising from a lease, measured on a discounted basis; and a right-of-use asset, which is an asset that represents the
lessee’s right to use, or control the use of, a specified asset for the lease term. As allowed by the standard, we elected to use the
transition option not to apply the new lease standard to comparative periods but instead to recognize a cumulative-effect
adjustment to retained earnings as of the date of adoption, January 1, 2019. Upon adoption of this standard, we recognized lease
liabilities of $7.0 million and right-of-use assets in the amount of $6.5 million (net of the reversal of a previously recorded
deferred rent liability of $0.5 million). There was no cumulative-effect adjustment to retained earnings required. Additional
disclosures required under the new standard are included in Note 6 to these financial statements.

In June 2016, the FASB issued ASU 2016-13 Financial Instruments – Credit Losses (Topic 326), which requires a financial

asset (or group of financial assets) measured at amortized cost to be presented at the net amount expected to be collected. The
allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial asset(s) to present
the net carrying value at the amount expected to be collected on the financial asset. The measurement of expected credit losses is
based on relevant information about past events, including historical experience, current conditions and reasonable, supportable
forecasts that affect the collectability of the reported amount, and requires judgment in determining relevant information and
estimation methods. The new standard is effective for us beginning January 1, 2020. The adoption of this standard is not expected
to have a material impact on our financial statements, as the only financial assets we have that are affected by the standard are
trade receivables for which we have historically employed a collectability estimation technique.

In August 2018, the FASB issued ASU 2018-13 Fair Value Measurement (Topic 820), which modifies the disclosure

requirements for fair value measurements. The new standard is effective for us beginning January 1, 2020, with early adoption
permitted. The adoption of this standard is not expected to have a material impact on our financial statements.

In January 2017, the FASB issued ASU 2017-04 Intangibles – Goodwill and Other (Topic 350), which, among other
provisions, eliminates “step 2” from the goodwill impairment test. The annual, or interim, goodwill impairment test will be
performed by comparing the fair value of a reporting unit with its carrying amount. An impairment charge should be recognized
for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not
exceed the total amount of goodwill allocated to that reporting unit. The new standard is effective for us beginning January 1,
2020, with early adoption permitted. The adoption of this standard is not expected to have a material impact on our financial
statements.

In December 2019, the FASB issued ASU 2019-12 Income Taxes (Topic 740), which simplifies the accounting for income

taxes by removing certain exceptions to the general principles in Topic 740 as well as clarifying and amending other areas of
existing GAAP under Topic 740. The new standard is effective for us beginning January 1, 2021, with early adoption permitted.
The adoption of this standard is not expected to have a material impact on our financial statements.

Off-Balance Sheet Arrangements

We did not have any off-balance sheet arrangements as of December 31, 2019. We do not currently have, nor have we ever
had, any relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance
or special purpose entities, which would have been established for the purpose of facilitating off-balance sheet arrangements or
other contractually narrow or limited purposes. In addition, we do not engage in trading activities involving non-exchange traded
contracts. As a result, we are not materially exposed to any financing, liquidity, market or credit risk that could arise if we had
engaged in these relationships.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

In the ordinary course of conducting business, we are exposed to certain risks associated with potential changes in market
conditions. These market risks include changes in currency exchange rates and interest rates which could affect operating results,
financial position and cash flows.

Foreign Currency Risk

During fiscal 2019 and 2018, 46% and 44%, respectively, of our total revenue was from customers outside of the United
States. In addition, a significant portion of our operating costs incurred outside the United States are denominated in currencies
other than the U.S. dollar. We conduct business on a worldwide basis and as a result, a portion of our revenue, earnings, net
assets, and net investments in foreign affiliates is exposed to changes in foreign currency exchange rates. We measure our net
exposure for cash balance positions and for cash inflows and outflows in order to evaluate the need to mitigate our foreign
exchange risk. We may enter into foreign currency forward contracts to minimize the impact related to unfavorable exchange rate
movements, although we have not done so during fiscal 2019 and fiscal 2018. Our largest exposures to foreign currency exchange
rates exist primarily with the Euro, British pound, Canadian dollar, Australian dollar and Japanese yen.

During the years ended December 31, 2019 and 2018, we recorded $0.2 million and $0.4 million of net foreign currency
exchange losses, respectively, related to the settlement and remeasurement of transactions denominated in currencies other than
the functional currency of our operating subsidiaries. Our analysis of operating results transacted in various foreign currencies
indicated that a hypothetical 10% change in the foreign currency exchange rates could have increased or decreased the
consolidated results of operations by approximately $1.2 million for 2019.

Interest Rate Risk

At December 31, 2019, we held $11.8 million in cash and cash equivalents and $20.9 million in a short-term managed

income mutual fund investment. Due to the short maturities on any instruments held, a hypothetical 10% increase or decrease in
interest rates would not have a material impact on our financial position, results of operations or cash flows.

Item 8.

Financial Statements and Supplementary Data

See the consolidated financial statements filed as part of this Annual Report on Form 10-K as listed under Item 15 below,

which are incorporated by reference herein.

Item 9.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Not Applicable.

Item 9A.

Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our management, with the participation and supervision of our Chief Executive Officer and Chief Financial Officer, is

responsible for our disclosure controls and procedures pursuant to Rules 13a-15(e) and 15d-15(e) under the Exchange Act.
Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be
disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the
time periods specified under SEC rules and forms. Disclosure controls and procedures include controls and procedures designed
to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated
to our principal executive officer and our principal financial officer, as appropriate, to allow timely decisions regarding required
disclosure. We design our disclosure controls and procedures to ensure, at reasonable assurance levels, that such information is
timely recorded, processed, summarized and reported, and then accumulated and communicated appropriately.

Based on an evaluation of our disclosure controls and procedures as of December 31, 2019, our Chief Executive Officer
and Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were effective at reasonable
assurance levels.

Management’s Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as
defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) to provide reasonable assurance regarding the reliability of our
financial reporting and the preparation of financial statements for external purposes in accordance with GAAP.

Management assessed the effectiveness of our internal controls over financial reporting as of December 31, 2019.
Management based its assessment on criteria established in the Internal Control — Integrated Framework issued by the
Committee of Sponsoring Organizations of the Treadway Commission (2013 Framework). Management’s assessment included
evaluation of elements such as the design and operating effectiveness of key financial reporting controls, process documentation,
accounting policies, and our overall control environment.

Based on this assessment under the criteria set forth in the Internal Control — Integrated Framework, management has

concluded that our internal control over financial reporting was effective as of December 31, 2019.

Our internal control over financial reporting as of December 31, 2019 has been audited by Grant Thornton LLP, an

independent registered public accounting firm, as stated in their respective report which is included herein.

Changes in Internal Control over Financial Reporting

There was no change in our internal control over financial reporting that occurred during the fiscal quarter ended
December 31, 2019 that has materially affected, or is reasonably likely to materially affect our internal control over financial
reporting.

Inherent Limitations of Internal Controls

Notwithstanding the foregoing, our management, including our Chief Executive Officer and Chief Financial Officer, does

not expect that our disclosure controls and procedures or our internal controls will prevent all error and all fraud. A control
system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the
control system are met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute
assurance that all control issues and instances of fraud, if any, within the company have been detected. These inherent limitations
include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or
mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people,
or by management override of the control. The design of any system of controls also is based in part upon certain assumptions
about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under
all potential future conditions. Over time, control may become inadequate because of changes in conditions, or the degree of
compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system,
misstatements due to error or fraud may occur and not be detected.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Stockholders
LeMaitre Vascular, Inc.

Opinion on internal control over financial reporting
We have audited the internal control over financial reporting of LeMaitre Vascular, Inc. (a Delaware corporation) and subsidiaries
(the “Company”) as of December 31, 2019, based on criteria established in the 2013 Internal Control—Integrated Framework
issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). In our opinion, the Company
maintained, in all material respects, effective internal control over financial reporting as of December 31, 2019, based on criteria
established in the 2013 Internal Control—Integrated Framework issued by COSO.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)
(“PCAOB”), the consolidated financial statements of the Company as of and for the year ended December 31, 2019, and our
report dated March 11, 2020 expressed an unqualified opinion on those financial statements.

Basis for opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its
assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report
on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over
financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be
independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and
regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all
material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that
a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed
risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a
reasonable basis for our opinion.

Definition and limitations of internal control over financial reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that
(1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of
the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of
financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the
company are being made only in accordance with authorizations of management and directors of the company; and (3) provide
reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s
assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ GRANT THORNTON LLP

Boston, Massachusetts
March 11, 2020

Item 9B. Other Information

Not Applicable.

PART III

Item 10.

Directors, Executive Officers and Corporate Governance

The information responsive to this item is incorporated by reference herein from the information to be contained in the

sections entitled “Directors, Executive Officers and Key Employees,” “Corporate Governance,” and “Meetings and Committees
of the Board of Directors” in our 2020 definitive proxy statement (2020 Definitive Proxy Statement) for the 2020 annual meeting
of stockholders to be filed with the Securities and Exchange Commission within 120 days after the fiscal year ended
December 31, 2019.

The information required by this item concerning compliance with Section 16(a) of the Exchange Act is incorporated herein

by reference from the information contained in the section entitled “Delinquent Section 16(a) Reports” in our 2020 Definitive
Proxy Statement, to the extent required to be included.

Code of Ethics

Certain documents relating to our corporate governance, including our Code of Business Conduct and Ethics, which is
applicable to our directors, officers, and employees, and the charters of the Audit Committee, Compensation Committee, and
Corporate Governance and Nominating Committee of our Board of Directors, are available on our website at
http://www.lemaitre.com. We intend to disclose substantive amendments to or waivers (including implicit waivers) of any
provision of the Code of Business Conduct and Ethics that apply to our principal executive officer, principal financial officer,
principal accounting officer, or controller, or persons performing similar functions, by posting such information on our website
available at http://www.lemaitre.com.

Item 11.

Executive Compensation

The information responsive to this item is incorporated herein by reference from the information to be contained in the

section entitled “Compensation of Executive Officers and Directors” in our 2020 Definitive Proxy Statement.

Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The information responsive to this item is incorporated herein by reference from the information to be contained in the

section entitled “Security Ownership of Certain Beneficial Owners and Management” in our 2020 Definitive Proxy Statement.

Equity Compensation Plan Information

The following table sets forth information regarding our equity compensation plans in effect as of December 31, 2019. Each

of our equity compensation plans is an “employee benefit plan” as defined by Rule 405 of Regulation C of the Securities Act of
1933, as amended.

Number of securities
to be issued upon
exercise of
outstanding options,
warrants and rights

Weighted-average
exercise price of
outstanding options,
warrants and rights

Number of securities
remaining available
for future issuance
under equity
compensation plans,
excluding securities
reflected in column
(a)

Plan category

Equity compensation plans approved by security

holders ...........................................................................

1,235,775 $

23.64

1,089,749

(a)

(b)

(c)

Equity compensation plans not approved by security

holders ...........................................................................

Total .........................................

1,235,775 $

23.64

1,089,749

Item 13.

Certain Relationships and Related Transactions, and Director Independence

The information required responsive to this item is incorporated herein by reference from the information to be contained in
the sections entitled “Certain Relationships and Related Transactions” and “Corporate Governance” in our 2020 Definitive Proxy
Statement.

Item 14.

Principal Accounting Fees and Services

The information responsive to this item is incorporated herein by reference from the information to be contained in the

sections entitled “Ratification of Independent Registered Public Accounting Firm” and “Additional Information Regarding Our
Independent Registered Public Accounting Firm” in our 2020 Definitive Proxy Statement.

Item 15.

Exhibits and Financial Statement Schedules

Documents filed as part of this Report.

PART IV

(1) The following consolidated financial statements are filed herewith in Item 8 of Part II above.

(i)

Report of Independent Registered Public Accounting Firm

(ii) Consolidated Balance Sheets

(iii) Consolidated Statements of Operations

(iv) Consolidated Statements of Changes in Stockholders’ Equity

(v) Consolidated Statements of Comprehensive Income

(vi) Consolidated Statements of Cash Flows

(vii) Notes to Consolidated Financial Statements

(2) All financial statement schedules are omitted because they are not applicable or the required information is shown in

the financial statements or notes thereto.

(3) Exhibits

Exhibit
Number Exhibit Description

Incorporated By Reference

Form

Date

SEC File
Number

Filed
Herewith

2.1

2.2

Asset Purchase Agreement dated November 10, 2016 between the
Registrant, Restore Flow Allografts, LLC and certain individuals
named therein.

10-K

3/9/18

001-33092

Asset Purchase Agreement dated September 20, 2018 between the
Registrant and Applied Medical Resources Corporation

10-Q

11/28/2018

001-
33092

2.3^

Asset Purchase Agreement dated October 11, 2019 between the

Registrant and Admedus Ltd and certain of its subsidiaries

3.1

Amended and Restated By-laws of the Registrant

S-1/A

5/26/06 333-133532

3.2

Second Amended and Restated Certificate of Incorporation of the

Registrant

10-K

3/29/10 001-33092

3.3

Amendment to Second Amended and Restated Certificate of

Incorporation of the Registrant

8-K

6/15/12 001-33092

4.1

Specimen Certificate evidencing shares of common stock

S-1/A

6/22/06 333-133532

Exhibit
Number

Exhibit Description

4.2

Description of Securities Registered pursuant to Section 12 of the

Securities Exchange Act of 1934, as amended

10.1

Northwest Park Lease dated March 31, 2003, by and between the
Registrant and Roger P. Nordblom and Peter C. Nordblom, as
Trustees of Northwest Associates, as amended

Incorporated By Reference

Form

Date

SEC File
Number

Filed
Herewith

S-1

4/25/06 333-133532

10.2

Director Compensation Policy

10-K

3/27/12 001-33092

10.3†

Executive Retention and Severance Agreement dated October 10,

2005, by and between the Registrant and George W. LeMaitre

S-1/A

5/26/06 333-133532

10.4†

Employment Agreement dated June 20, 2006, by and between the

Registrant and David Roberts

S-1/A

6/22/06 333-133532

10.5†

Employment Agreement dated April 20, 2006, by and between the

Registrant and Joseph P. Pellegrino

S-1/A

6/22/06 333-133532

10.6†

Form of Indemnification Agreement between the Registrant and its

directors and executive officers

S-1/A

5/26/06 333-133532

10.7

Second Amendment of Lease dated May 21, 2007, by and between

Rodger P. Nordblom and Peter C. Nordblom, as Trustees of
Northwest Associates, and Registrant

8-K

6/15/07 001-33092

10.8

Third Amendment of Lease dated February 26, 2008, by and

between Rodger P. Nordblom and Peter C. Nordblom, as Trustees of
Northwest Associates, and Registrant

8-K

4/10/08 001-33092

10.9

Fourth Amendment of Lease dated October 31, 2008, by and

between Rodger P. Nordblom and Peter C. Nordblom, as Trustees of
Northwest Associates, and Registrant

10-K

3/31/09 001-33092

10.10† First Amendment to Executive Retention and Severance Agreement

dated December 23, 2008, by and between the Registrant and
George W. LeMaitre

10-K

3/31/09 001-33092

10.11† First Amendment to Employment Agreement dated December 19,
2008, by and between the Registrant and David Roberts

10-K

3/31/09 001-33092

10.12† First Amendment to Employment Agreement dated December 19,

2008, by and between the Registrant and Joseph P. Pellegrino

10-K

3/31/09 001-33092

10.13

Fifth Amendment of Lease dated March 23, 2010, by and between

Rodger P. Nordblom and Peter C. Nordblom, as Trustees of
Northwest Associates, and Registrant

10-K

3/29/10 001-33092

10.14

Northwest Park Lease dated March 23, 2010, by and between
Rodger P. Nordblom and Peter C. Nordblom, as Trustees of
Northwest Associates, and Registrant

10-K

3/29/10 001-33092

Exhibit
Number

Exhibit Description

Incorporated By Reference

Form

Date

SEC File
Number

Filed
Herewith

10.15

First Amendment to Northwest Park Lease dated September 14,

2010, by and between Rodger P. Nordblom and Peter C. Nordblom,
as Trustees of Northwest Associates, and Registrant

10-K

3/27/12 001-33092

10.16

Second Amendment to Northwest Park Lease dated October 31,

2011, by and between NWP Building 4 LLC, as successor-in-interest
to Trustees of Northwest Associates, and Registrant

10-K

3/27/12 001-33092

10.17

Third Amendment of Northwest Park Lease dated August 31, 2012,
by and between NWP Building 4 LLC, as successor-in-interest to
Trustees of Northwest Associates, and Registrant

10-K

3/27/13 001-33092

10.18

Lease dated December 20, 2013, by and between N.W. Building 3

Trust and Registrant

8-K

12/23/13 001-33092

10.19

Fourth Amendment of Lease dated December 20, 2013, by and
between NWP Building 4 LLC, as successor-in-interest to the
Trustees of Northwest Associates, and Registrant

10.20

Sixth Amendment of Lease dated December 20, 2013, by and
between NWP Building 5 LLC, as successor-in-interest to the
Trustees of Northwest Associates, and Registrant

8-K

12/23/13 001-33092

8-K

12/23/13 001-33092

10.21† Amended and Restated Management Incentive Compensation Plan

8-K

2/25/14 001-33092

10.22† Third Amended and Restated 2006 Stock Option and Incentive Plan 8-K

6/8/15 001-33092

10.23† Separation Agreement dated June 7, 2017 between Peter R. Gebauer

and LeMaitre Vascular GmbH

10-Q

8/3/2017 001-33092

10.24† Transition and Employment Agreement dated June 7, 2017 between

Peter R. Gebauer and the Registrant

10-Q

8/3/2017 001-33092

10.25† Form of Restricted Stock Unit Award Agreement under the

LeMaitre Vascular, Inc. 2006 Stock Option And Incentive Plan

10-K

3/9/18 001-33092

10.26† Form of Incentive Stock Option Agreement under the LeMaitre
Vascular, Inc. 2006 Stock Option And Incentive Plan

10-K

3/9/18 001-33092

10.27† Form of Non-Qualified Stock Option Agreement (Employees) under

the LeMaitre Vascular, Inc. 2006 Stock Option And Incentive Plan

10-K

3/9/18

001-33092

10.28

Form of Non-Qualified Stock Option Agreement (Non-Employee

Directors) under the LeMaitre Vascular, Inc. 2006 Stock Option And
Incentive Plan

10-K

3/9/18

001-33092

10.29

Asset Purchase Agreement between the Registrant and Specialty

Surgical Instrumentation, Inc. dated April 5, 2018.

10-Q

5/4/2018 001-33092

10.30^ License Agreement dated October 11, 2019 between the Registrant

and Admedus Ltd and certain of its subsidiaries

10.31

First Amendment of Lease dated October 29, 2019 between NWP

BUILDING 3 LLC and the Registrant

8-K

11/1/2019 001-33092

10.32

Fifth Amendment of Lease dated October 29, 2019 between NWP

BUILDING 4 LLC and the Registrant

8-K

11/1/2019 001-33092

Exhibit
Number

Exhibit Description

Incorporated By Reference

Form

Date

SEC File
Number

Filed
Herewith

10.33

Seventh Amendment of Lease dated October 29, 2019 between

NWP BUILDING 5 LLC and the Registrant

8-K

11/1/2019 001-33092

10.34

Lease dated November 26, 2019 between NWP Retail 18 LLC and

the Registrant.

21.1

List of Subsidiaries

23.1

Consent of Grant Thornton LLP

8-K

12/3/2019 001-33092

24.1

31.1

Power of Attorney (included on the Signatures page of this Annual
Report on Form 10-K)

Certification of Chief Executive Officer, as required by Rule 13a-
14(a) or Rule 15d-14(a)

31.2

Certification of Chief Financial Officer, as required by Rule 13a-

14(a) or Rule 15d-14(a)

32.1*

Certification of Chief Executive Officer, as required by Rule 13a-

14(b) or Rule 15d-14(b) and Section 1350 of Chapter 36 of Title 18
of the United States Code (18 U.S.C. §1350)

32.2*

Certification of Chief Financial Officer, as required by Rule 13a-

14(b) or Rule 15d-14(b) and Section 1350 of Chapter 36 of Title 18
of the United States Code (18 U.S.C. §1350)

101.INS Inline XBRL Instance Document.

101.SCH Inline XBRL Taxonomy Extension Schema Document.

101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document.

101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document.

101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document.

101.PRE Inline XRBL Taxonomy Extension Presentation Linkbase

Document.

†
*

Indicates a management contract or any compensatory plan, contract, or arrangement.
The certifications attached as Exhibit 32.1 and 32.2 that accompany this Annual Report on Form 10-K, are not deemed filed
with the Securities and Exchange Commission and are not to be incorporated by reference into any filing of LeMaitre
Vascular, Inc. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether
made before or after the date of this Form 10-K, irrespective of any general incorporation language contained in such filing.
Portions of the exhibit (indicated by “[***]”) have been omitted because they are not material and would likely cause
competitive harm to the Registrant if disclosed.

Item 16.

Form 10-K Summary.

Not applicable.

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused

this report to be signed on its behalf by the undersigned, thereunto duly authorized, on March 11, 2020.

SIGNATURES

LEMAITRE VASCULAR, INC.

By:

/S/ GEORGE W. LEMAITRE
George W. LeMaitre,
Chief Executive Officer and
Chairman of the Board

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints

George W. LeMaitre and Joseph P. Pellegrino, Jr., and each of them, his true and lawful attorneys-in-fact and agents, with full
power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any and all
amendments (including post-effective amendments) to this report, and to file the same, with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be
done in connection therewith, as fully to all intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or either of them, or their or his substitutes or substitute, may lawfully do or
cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following

persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature

Title

/s/ GEORGE W. LEMAITRE
George W. LeMaitre

Chief Executive Officer and
Chairman of the Board

(Principal Executive Officer)

Chief Financial Officer (Principal
Financial and Accounting
Officer) and Director

Director

/s/ JOSEPH P. PELLEGRINO, JR.
Joseph P. Pellegrino, Jr.

/s/ LAWRENCE J. JASINSKI
Lawrence J. Jasinski

/s/ JOHN J. O’CONNOR
John J. O’Connor

/s/ DAVID B. ROBERTS
David B. Roberts

Date

March 11, 2020

President and Director

March 11, 2020

/s/ JOHN A. ROUSH
John A. Roush

Director

March 11, 2020

INDEX TO FINANCIAL STATEMENTS

LeMaitre Vascular, Inc.
Consolidated Financial Statements
Report of Independent Registered Public Accounting Firm ..................................................................................................
Consolidated Balance Sheets as of December 31, 2019 and 2018 ........................................................................................
Consolidated Statements of Operations for the Years Ended December 31, 2019, 2018 and 2017 ......................................
Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2019, 2018 and 2017 ..................
Consolidated Statements of Stockholders’ Equity for the Years Ended December 31, 2019, 2018 and 2017 ......................
Consolidated Statements of Cash Flows for the Years Ended December 31, 2019, 2018 and 2017 .....................................
Notes to Consolidated Financial Statements .........................................................................................................................

Page

F-2
F-3
F-4
F-5
F-6
F-7
F-8

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Stockholders
LeMaitre Vascular, Inc.

Opinion on the financial statements
We have audited the accompanying consolidated balance sheets of LeMaitre Vascular, Inc. (a Delaware corporation) and
subsidiaries (the “Company”) as of December 31, 2019 and 2018, the related consolidated statements of operations,
comprehensive income, changes in stockholders’ equity, and cash flows for each of the three years in the period ended December
31, 2019, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements
present fairly, in all material respects, the financial position of the Company as of December 31, 2019 and 2018, and the results of
its operations and its cash flows for each of the three years in the period ended December 31, 2019, in conformity with accounting
principles generally accepted in the United States of America.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)
(“PCAOB”), the Company’s internal control over financial reporting as of December 31, 2019, based on criteria established in the
2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway
Commission (“COSO”), and our report dated March 11, 2020 expressed an unqualified opinion.

Change in accounting principle
As discussed in Note 1 to the consolidated financial statements, the Company has changed its method of accounting for leases as
of January 1, 2019 due to the adoption of Accounting Standards Codification (ASC) Topic 842, Leases.

Basis for opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the
Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required
to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and
regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error
or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements,
whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a
test basis, evidence supporting the amounts and disclosures in the financial statements. Our audits also included evaluating the
accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the
financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ GRANT THORNTON LLP
We have served as the Company’s auditor since 2015.

Boston, Massachusetts
March 11, 2020

F-2

LeMaitre Vascular, Inc.
Consolidated Balance Sheets

December 31, December 31,

2019

2018

(in thousands, except share data)

Assets
Current assets:

Cash and cash equivalents .................................................................................................. $
Short-term marketable securities ........................................................................................
Accounts receivable, net of allowances of $522 at December 31, 2019, and $399 at

December 31, 2018 .........................................................................................................
Inventory and other deferred costs .....................................................................................
Prepaid expenses and other current assets ..........................................................................
Total current assets .................................................................................................................

Property and equipment, net ...................................................................................................
Right-of-use leased assets ......................................................................................................
Goodwill .................................................................................................................................
Other intangibles, net .............................................................................................................
Deferred tax assets .................................................................................................................
Other assets ............................................................................................................................
Total assets ............................................................................................................................. $

Liabilities and stockholders’ equity
Current liabilities:

Accounts payable................................................................................................................ $
Accrued expenses ...............................................................................................................
Acquisition-related obligations ...........................................................................................
Lease liabilities - short-term ...............................................................................................
Total current liabilities ...........................................................................................................
Lease liabilities - long-term ....................................................................................................
Deferred tax liabilities ............................................................................................................
Other long-term liabilities ......................................................................................................
Total liabilities .......................................................................................................................

11,786 $
20,895

16,572
39,527
3,312
92,092

14,854
15,208
39,951
24,893
1,084
259
188,341 $

2,604 $
14,014
2,476
1,757
20,851
13,955
1,179
4,215
40,200

26,318
21,668

15,721
27,388
2,922
94,017

14,102
-
29,868
13,692
1,215
194
153,088

1,732
15,847
2,179
-
19,758
-
484
2,611
22,853

Stockholders’ equity:

Preferred stock, $0.01 par value; authorized 3,000,000 shares; none outstanding .............
Common stock, $0.01 par value; authorized 37,000,000 shares; issued 21,678,927 shares

at December 31, 2019, and 21,110,224 shares at December 31, 2018 ............................
Additional paid-in capital ...................................................................................................
Retained earnings ...............................................................................................................
Accumulated other comprehensive loss .............................................................................
Treasury stock, at cost; 1,522,035 shares at December 31, 2019 and 1,501,511 shares at

December 31, 2018 .........................................................................................................
Total stockholders’ equity ......................................................................................................
Total liabilities and stockholders’ equity................................................................................ $

217
105,934
57,029
(4,007 )

(11,032 )
148,141
188,341 $

211
98,442
45,831
(3,900)

(10,349)
130,235
153,088

See accompanying notes to consolidated financial statements.

F-3

LeMaitre Vascular, Inc.
Consolidated Statements of Operations

2019

Year ended December 31,
2018
(in thousands, except per share data)

2017

Net sales .................................................................................................. $
Cost of sales ............................................................................................

117,232 $
37,379

105,568 $
31,629

100,867
30,170

Gross profit .............................................................................................

79,853

73,939

70,697

Sales and marketing ................................................................................
General and administrative ......................................................................
Research and development ......................................................................
Gain on divestitures and acquisitions ......................................................
Total operating expenses .........................................................................

30,339
19,055
9,276
-
58,670

27,318
17,689
8,197
(7,474)
45,730

25,948
17,010
6,636
-
49,594

Income from operations ..........................................................................

21,183

28,209

21,103

Other income (expense):

Interest income ....................................................................................
Interest expense ...................................................................................
Foreign currency loss ..........................................................................

698
-
(202)

631
(2)
(394)

179
(21)
(155)

Income before income taxes ....................................................................
Provision for income taxes ......................................................................

21,679
3,745

28,444
5,501

21,106
3,929

Net income .............................................................................................. $

17,934 $

22,943 $

17,177

Earnings per share of common stock:

Basic .................................................................................................... $
Diluted ................................................................................................. $

0.91 $
0.88 $

1.18 $
1.13 $

0.91
0.86

Weighted-average shares outstanding:

Basic ....................................................................................................
Diluted .................................................................................................

19,813
20,326

19,426
20,242

18,961
20,033

Cash dividends declared per common share ............................................ $

0.34 $

0.28 $

0.22

See accompanying notes to consolidated financial statements.

F-4

LeMaitre Vascular, Inc.
Consolidated Statements of Comprehensive Income

Net income .............................................................................................. $
Other comprehensive income (loss):

Foreign currency translation adjustment, net .......................................
Unrealized gain (loss) on short-term marketable securities .................
Total other comprehensive income (loss) ................................................

2019

Year ended December 31,
2018
2018

2017

17,934 $

22,943 $

17,177

(234)
127
(107)

(1,626)
15
(1,611)

2,294
-
2,294

Comprehensive income ........................................................................... $

17,827 $

21,332 $

19,471

See accompanying notes to consolidated financial statements.

F-5

LeMaitre Vascular, Inc.
Consolidated Statements of Stockholders’ Equity

(in thousands, except share data)

Common Stock

Additional
Paid-in
Amount Capital

Retained Comprehensive
Income (Loss)
Earnings

Treasury Stock

Amount

Total
Stockholders’
Equity

Accumulated

Other

Balance at December 31,

2016 .............................. 20,040,348 $

200 $

85,378 $

15,335 $

(4,583) 1,452,810 $

(8,830) $

87,500

Net income ......................
Other comprehensive

income ..........................

Issuance of common

stock for stock options
exercised .......................

Vested restricted stock

635,503

units ..............................

69,190

Stock-based

compensation expense ..

Repurchase of common

stock at cost ..................

Common stock cash

dividend paid ................

Balance at December 31,

5,493

2,256

17,177

2,294

(4,179)

27,291

(778)

17,177

2,294

5,500

2,256

(778)

(4,179)

2017 .............................. 20,745,041 $

207 $

93,127 $

28,333 $

(2,289) 1,480,101 $

(9,608) $

109,770

Net income ......................
Other comprehensive

income ..........................

Issuance of common

stock for stock options
exercised .......................

Vested restricted stock

303,379

units ..............................

61,804

Stock-based

compensation expense ..

Repurchase of common

stock at cost ..................

Common stock cash

dividend paid ................

Balance at December 31,

2,966

2,349

22,943

(1,611)

(5,445)

21,410

(741)

22,943

(1,611)

2,970

2,349

(741)

(5,445)

2018 .............................. 21,110,224

211

98,442

45,831

(3,900) 1,501,511

(10,349)

130,235

Net income ......................
Other comprehensive

income ..........................

Issuance of common

stock for stock options
exercised .......................

Vested restricted stock

509,693

units ..............................

59,010

Stock-based

compensation expense ..

Repurchase of common

stock at cost ..................

Common stock cash

dividend paid ................

Balance at December 31,

4,850

2,642

17,934

(107)

(6,736)

20,524

(683)

17,934

(107)

4,856

2,642

(683)

(6,736)

2019 .............................. 21,678,927

217

105,934

57,029

(4,007) 1,522,035

(11,032)

148,141

See accompanying notes to consolidated financial statements.

F-6

LeMaitre Vascular, Inc.
Consolidated Statements of Cash Flows

Operating activities
Net income .......................................................................................................... $
Adjustments to reconcile net income to net cash provided by operating

activities:

Depreciation and amortization .................................................................
Stock-based compensation .......................................................................
Fair value adjustments to contingent consideration obligations ...............
Provision for doubtful accounts and allowances ......................................
Provision for inventory write-downs ........................................................
Provision (benefit) for deferred income taxes ..........................................
Gain on acquisitions and divestitures .......................................................
Foreign currency transaction gain ............................................................
Changes in operating assets and liabilities:

Accounts receivable ..........................................................................
Inventory and other deferred costs ...................................................
Prepaid expenses and other assets ....................................................
Accounts payable and other liabilities ..............................................
Net cash provided by operating activities ............................................................
Investing activities
Purchases of property and equipment ..................................................................
Payments related to acquisitions .........................................................................
Purchases of short-term marketable securities ....................................................
Proceeds from sales of marketable securities ......................................................
Proceeds from divestitures ..................................................................................
Net cash used in investing activities ....................................................................
Financing activities
Payment of deferred acquisition consideration ....................................................
Proceeds from issuance of common stock ...........................................................
Purchase of treasury stock ...................................................................................
Common stock cash dividend paid ......................................................................
Net cash provided by (used in) financing activities .............................................
Effect of exchange rate changes on cash and cash equivalents ...........................
Net increase (decrease) in cash and cash equivalents ..........................................
Cash and cash equivalents at beginning of year ..................................................
Cash and cash equivalents at end of year ............................................................ $
Supplemental disclosures of cash flow information (see Note 12).

2019

Year ended December 31,
2018
(in thousands)

2017

17,934 $

22,943 $

17,177

5,416
2,642
171
388
747
824
-
(57 )

(1,301 )
(11,335 )
(654 )
(596 )
14,179

(3,761 )
(21,240 )
(22,699 )
23,600
-
(24,100 )

(2,059 )
4,856
(683 )
(6,736 )
(4,622 )
11
(14,532 )
26,318
11,786 $

4,324
2,349
(29)
264
671
(2,152)
(7,474)
259

(1,283)
(4,262)
(418)
4,314
19,506

(3,054)
(12,282)
(19,619)
20,500
7,400
(7,055)

(1,199)
2,969
(741)
(5,445)
(4,416)
(813)
7,222
19,096
26,318 $

4,055
2,256
106
230
396
300
-
(29)

(1,507)
(1,352)
(288)
1,524
22,868

(6,417)
-
(22,541)
-
-
(28,958)

(463)
5,500
(778)
(4,179)
80
818
(5,192)
24,288
19,096

See accompanying notes to consolidated financial statements.

F-7

LeMaitre Vascular, Inc.

Notes to Consolidated Financial Statements
December 31, 2019

1. Significant Accounting Policies and Related Matters

Description of Business

Unless the context requires otherwise, references to LeMaitre Vascular, we, our, and us refer to LeMaitre Vascular, Inc. and

our subsidiaries. We develop, manufacture, and market medical devices and implants used primarily in the field of vascular
surgery. We also derive revenues from the processing and cryopreservation of human tissues for implantation in patients. We
operate in a single segment in which our principal product lines include the following: anastomotic clips, angioscopes, balloon
catheters, biologic vascular grafts, biologic vascular patches, carotid shunts, polyester vascular grafts, powered phlebectomy
devices, radiopaque marking tape, remote endarterectomy devices, surgical glue and valvulotomes. Our offices are located in
Burlington, Massachusetts; Chandler, Arizona; Fox River Grove, Illinois; Vaughan, Canada; Hereford, England; Sulzbach,
Germany; Milan, Italy; Madrid, Spain; Saint-Etienne, France; North Melbourne, Australia; Tokyo, Japan; Shanghai, China and
Singapore.

Consolidation and Basis of Presentation

Our consolidated financial statements include the accounts of LeMaitre Vascular and the accounts of our wholly-owned

subsidiaries, LeMaitre Vascular GmbH, LeMaitre Vascular GK, Vascutech Acquisition LLC, LeMaitre Acquisition LLC,
LeMaitre Vascular SAS, LeMaitre Vascular S.r.l., LeMaitre Vascular Spain SL, LeMaitre Vascular Switzerland GmbH, LeMaitre
Vascular ULC, LeMaitre Vascular AS, LeMaitre Vascular Pty Ltd, Bio Nova International Pty Ltd, LeMaitre Vascular, Ltd.,
LeMaitre Medical Technology (Shanghai) Co. Ltd, LeMaitre Cardial SAS and LeMaitre Vascular Singapore Pte Ltd. All
significant intercompany accounts and transactions have been eliminated in consolidation.

Foreign Currency Translation

Balance sheet accounts of foreign subsidiaries are translated into U.S. dollars at year-end exchange rates. Operating
accounts are translated at average exchange rates for each year. Net translation gains or losses are adjusted directly to a separate
component of other comprehensive income (loss) within stockholders’ equity. Foreign exchange transaction gains (losses),
substantially all of which relate to intercompany activity between us and our foreign subsidiaries, are included in other income
(expense) in the accompanying consolidated statements of operations.

Estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles (GAAP) requires
us to make estimates and assumptions that affect the amounts reported in our consolidated financial statements and accompanying
notes. Our estimates and assumptions, including those related to bad debts, inventory and other deferred costs, intangible assets,
sales returns and discounts, and income taxes are reviewed on an ongoing basis and updated as appropriate. Actual results could
differ from those estimates.

Revenue Recognition

Our revenue is derived primarily from the sale of disposable or implantable devices used during vascular surgery. We sell
primarily directly to hospitals and to a lesser extent to distributors, as described below, and, during the periods presented in our
consolidated financial statements, entered into consigned inventory arrangements with either hospitals or distributors on a limited
basis. With the acquisition of the RestoreFlow allograft business, we also derive revenues from the processing and
cryopreservation of human tissues for implantation in patients. These revenues are recognized when services have been provided
and the tissue has been shipped to the customer, provided all other revenue recognition criteria discussed in the succeeding
paragraph have been met.

F-8

Step 1: Identify the contract with a customer

Step 2: Identify the performance obligations in the contract

Step 3: Determine the transaction price

Step 4: Allocate the transaction price

Step 5: Recognize revenue when or as the entity satisfies a performance obligation

Revenue is recognized when or as a company satisfies a performance obligation by transferring a promised good or service

We generally reference customer purchase orders to determine the existence of a contract. Orders that are not accompanied
by a purchase order are confirmed with the customer either in writing or verbally. The purchase orders or similar correspondence,
once accepted, identify the performance obligations as well as the transaction price, and otherwise outline the rights and
obligations of each party. We allocate the transaction price of each contract among the performance obligations in accordance
with the pricing of each item specified on the purchase order, which is in turn based on standalone selling prices per our published
price lists. In cases where we discount products or provide certain items free of charge, we allocate the discount proportionately to
all performance obligations, unless it can be demonstrated that the discount should be allocated entirely to one or more, but not
all, of the performance obligations.

We recognize revenue, net of allowances for returns and discounts, fees paid to group purchasing organizations, and any
sales and value added taxes required to be invoiced, which we have elected to exclude from the measurement of the transaction
price as allowed by the standard, at the time of shipment (taking into consideration contractual shipping terms), or in the case of
consigned inventory, when it is consumed. Shipment is the point at which control of the product and title passes to our customers,
and at which LeMaitre Vascular has a present right to receive payment for the goods.

Below is a disaggregation of our revenue by major geographic area, which is among the primary categorizations used by

management in evaluating financial performance, for the periods indicated (in thousands):

Americas ...................................................................... $
Europe, Middle East and Africa ................................... $
Asia/Pacific Rim .......................................................... $
Total ......................................................................... $

69,359 $
39,480
8,393
117,232 $

63,649
35,319
6,600
105,568

Year ended December 31,
2018
2019

Except as discussed in Note 6, we do not carry any contract assets or contract liabilities, as there are generally no unbilled
amounts due from customers under contracts for which we have partially satisfied performance obligations, or amounts received
from customers for which we have not satisfied performance obligations. We satisfy our performance obligations under revenue
contracts within a very short time period from receipt of the orders, and payments from customers are typically received within 30
to 60 days of fulfillment of the orders, except in certain geographies such as Spain and Italy where the payment cycle is
customarily longer. Accordingly, there is no significant financing component to our revenue contracts. Additionally, we have
elected as a policy that incremental costs (such as commissions) incurred to obtain contracts are expensed as incurred, due to the
short-term nature of the contracts.

Research and Development Expense

Research and development costs, principally salaries, laboratory testing, and supplies, are expensed as incurred and also

include royalty payments associated with licensed and acquired intellectual property.

F-9

Shipping and Handling Costs

Shipping and handling fees paid by customers are recorded within net sales, with the related expense recorded in cost of

sales.

Advertising Costs

Advertising costs are expensed as incurred and are included as a component of sales and marketing expense in the

accompanying consolidated statements of operations. Advertising costs are as follows:

2019

Year ended December 31,
2018
(in thousands)

2017

Advertising expense ............................... $

286 $

299 $

305

Cash and Cash Equivalents

We consider all highly liquid instruments purchased with maturity dates of 90 days or less to be cash equivalents. Cash and

cash equivalents are primarily invested in money market funds. These amounts are stated at cost, which approximates fair value.

Short-term Marketable Securities

Our short-term marketable securities are available-for-sale securities carried at fair value, with unrealized gains and losses

recorded in other comprehensive income.

Concentrations of Credit Risk

Our financial instruments that are exposed to concentrations of credit risk consist primarily of cash and cash equivalents

and accounts receivable. Cash equivalents represent highly liquid investments with maturities of 90 days or less at the date of
purchase. Credit risk related to cash and cash equivalents are limited based on the creditworthiness of the financial institutions at
which these funds are held. We maintain cash balances in several banks. Accounts located in the United States are insured by the
Federal Deposit Insurance Corporation (FDIC) up to $250,000. Certain of our account balances exceed the FDIC limit. Cash
balances held outside the United States totaled approximately $9.0 million as of December 31, 2019.

We closely monitor outstanding receivables for potential collection risks, including those that may arise from economic

conditions, in both the U.S. and international economies. Our European sales to government-owned or supported customers such
as hospitals, distributors and agents, in Southern Europe, specifically Italy and Spain may be subject to significant payment delays
due to government austerity measures impacting funding and payment practices. As of December 31, 2019 our receivables in Italy
and Spain totaled $1.0 million and $0.8 million, respectively. Receivables balances with certain publicly-owned hospitals and
government supported customers in these countries can accumulate over a period of time and then subsequently be settled as large
lump sum payments. While we believe our allowance for doubtful accounts in these countries is adequate as of December 31,
2019, if significant changes were to occur in the payment practices of these European governments or if government funding
becomes unavailable, we may not be able to collect on receivables due to us from these customers and our write offs of
uncollectible amounts may increase.

F-10

We write off accounts receivable when they become uncollectible. Such credit losses have historically been within our

expectations and allowances. The allowance for doubtful accounts is our best estimate of the amount of probable credit losses in
our existing accounts receivable. We review our allowance for doubtful accounts on a monthly basis and all past due balances are
reviewed individually for collectability. The provision for the allowance for doubtful accounts is recorded in general and
administrative expenses. The following is a summary of our allowance for doubtful accounts and sales returns:

Balance at
Beginning (recoveries) charged
of Period

to Income

Additions

Deductions Balance at

from

Reserves

End of
Period

Allowance for doubtful accounts and sales returns:

Year ended December 31, 2019 ........................................... $
Year ended December 31, 2018 ...........................................
Year ended December 31, 2017 ...........................................

399 $
349
258

Fair Value of Financial Instruments

(in thousands)

388 $
264
230

265
214
139

522
399
349

Our financial instruments include cash and cash equivalents, short-term marketable securities, accounts receivable and trade

payables. The fair value of these instruments approximates their carrying value based upon their short-term nature or variable
rates of interest. Unrealized gains and losses on our short-term marketable securities are recorded in other comprehensive income
and were not material to our consolidated financial statements for the year ended December 31, 2019.

Inventory and Other Deferred Costs

Inventory and Other Deferred Costs consists of finished products, work-in-process, raw materials and costs deferred in
connection with human tissue cryopreservation services of our RestoreFlow allograft business. We value inventory and other
deferred costs at the lower of cost or market value. Cost includes materials, labor and manufacturing overhead and is determined
using the first-in, first-out (FIFO) method. On a quarterly basis, we review inventory quantities on hand and analyze the provision
for excess and obsolete inventory based primarily on product expiration dating and our estimated sales forecast, which is based on
sales history and anticipated future demand. Our estimates of future product demand may not be accurate, and we may understate
or overstate the provision required for excess and obsolete inventory. Accordingly, any significant unanticipated changes in
demand could have a significant impact on the value of our inventory and results of operations.

Property and Equipment

Property and equipment are recorded at cost. Depreciation is provided over the estimated useful lives of the related assets

using straight-line method as follows:

Description
Computers and equipment
Machinery and equipment
Leasehold improvements

Useful Life
(Years)
3 – 5
3 – 10

The shorter of its useful life or lease term

Expenditures for maintenance and repairs are charged to operations when incurred, while additions and betterments are
capitalized. When assets are retired or disposed, the asset’s original cost and related accumulated depreciation are eliminated from
the accounts and any gain or loss is reflected in the statement of operations.

Valuation of Business Combinations

We assign the value of the consideration transferred to acquire a business to the tangible assets and identifiable intangible

assets acquired and liabilities assumed on the basis of their fair values at the date of acquisition. We assess the fair value of assets,
including intangible assets, using a variety of methods and are usually performed by an independent appraiser who measures fair
value from the perspective of a market participant.

Acquisitions have been accounted for using the acquisition method, and the acquired companies’ results have been included

in the accompanying consolidated financial statements from their respective dates of acquisition. Acquisition transaction costs
have been recorded in general and administrative expenses, and are expensed as incurred. Allocation of the purchase price for
acquisitions is based on estimates of the fair value of the net assets acquired and, for acquisitions completed within the past year,
is subject to adjustment upon finalization of the purchase price allocation.

Our acquisitions have historically been made at prices above the fair value of the acquired assets, resulting in goodwill, due
to expectations of synergies of combining the businesses. These synergies include use of our existing commercial infrastructure to

F-11

expand sales of the acquired businesses’ products, use of the commercial infrastructure of the acquired businesses to cost-
effectively expand sales of our products, and the elimination of redundant facilities, functions and staffing.

Contingent Consideration

Contingent consideration for acquisitions is recognized at the date of acquisition, based on the fair value at that date, and

then re-measured periodically through adjustments to net income.

Impairment of Long-lived Assets

We review our long-lived assets (primarily property and equipment and intangible assets) subject to amortization quarterly
to determine if any adverse conditions exist or a change in circumstances has occurred that would indicate impairment or a change
in the remaining useful life. Conditions that may indicate impairment include, but are not limited to, a significant adverse change
in legal factors or business climate that could affect the value of an asset, a product recall, or an adverse action or assessment by a
regulator. If an impairment indicator exists, we test the intangible asset for recoverability. We record impairment losses on long-
lived assets used in operations when events and circumstances indicate that the assets might be impaired and the undiscounted
cash flows estimated to be generated by those assets are less than the carrying amount of those assets. Impairment is measured
based on the fair market value of the affected asset using discounted cash flows.

Goodwill

Goodwill represents the amount of consideration paid in connection with business acquisitions in excess of the fair value of

assets acquired and liabilities assumed. Goodwill is evaluated for impairment annually or more frequently if indicators of
impairment are present or changes in circumstances suggest that an impairment may exist. We evaluate the December 31 balance
of the carrying value of goodwill based on a single reporting unit annually. We perform an assessment of qualitative factors to
determine if it is “more likely than not” that the fair value of our reporting unit is less than its carrying value as a basis for
determining whether it is necessary to perform the two-step goodwill impairment test. The “more likely than not” threshold is
defined as having a likelihood of more than 50 percent. If required, the next step of the goodwill impairment test is to determine
the fair value of the reporting unit. The implied fair value of goodwill is determined on the same basis as the amount of goodwill
recognized in connection with a business combination. Specifically, the fair value of a reporting unit is allocated to all of the
assets and liabilities (including any unrecognized intangible assets) as if the reporting unit had been acquired in a business
combination as of the date of the impairment review and as if the fair value of the reporting unit was the price paid to acquire the
reporting unit. The excess of the fair value of a reporting unit over the amounts assigned to its assets and liabilities is the implied
fair value of goodwill. If the carrying amount of the reporting unit goodwill exceeds the implied fair value of that goodwill, an
impairment loss shall be recognized in an amount equal to that excess. We have determined that no goodwill impairment charges
were required for the years ended December 31, 2019, 2018 or 2017.

Other Intangible Assets

Other intangible assets consist primarily of patents, trademarks, technology licenses, and customer relationships acquired in
connection with business acquisitions and asset acquisitions and are amortized over their estimated useful lives, ranging from 2 to
16 years.

Stock-based Compensation

We recognize, as expense, the estimated fair value of stock options to employees which is determined using the Black-

Scholes option pricing model. Share-based compensation charges are recorded across the consolidated statement of operations
based upon the grantee’s primary function. We have elected to recognize the compensation cost of all share-based awards on a
straight-line basis over the vesting period of the award. In periods that we grant stock options, fair value assumptions are based on
volatility, interest, dividend yield, and expected term over which the stock options will be outstanding. The computation of
expected volatility is based on the historical volatility of the company’s stock. The interest rate for periods within the contractual
life of the award is based on the U.S. Treasury risk-free interest rate in effect at the time of grant. Historical data on exercise
patterns is the basis for estimating the expected life of an option. The expected annual dividend rate was calculated by dividing
our annual dividend, based on the most recent quarterly dividend rate, by the closing stock price on the grant date.

We also issue restricted stock units (RSUs) as an additional form of equity compensation to our employees, officers, and

directors, pursuant to our stockholder-approved 2006 Plan. RSUs entitle the grantee to an issuance of stock at no cost and
generally vest over a period of time determined by our Board of Directors at the time of grant based upon the continued service to
the company. The fair market value of the award is determined based on the number of RSUs granted and the market value of our
common stock on the grant date and is amortized to expense over the period of vesting. Unvested RSUs are forfeited and canceled
as of the date that employment or service to the company terminates. RSUs are settled in shares of our common stock upon
vesting. We typically repurchase common stock upon our employees’ vesting in RSUs in order to cover any minimum tax
withholding liability as a result of the RSUs having vested.

F-12

Commitments and Contingencies

In the normal course of business, we are subject to proceedings, lawsuits, and other claims and assessments for matters

related to, among other things, patent infringement, business acquisitions, employment, commercial matters and product recalls.
We assess the likelihood of any adverse judgments or outcomes to these matters as well as potential ranges of probable losses. A
determination of the amount of reserves required, if any, for these contingencies is made after careful analysis of each individual
issue. The required reserves may change in the future due to new developments in each matter or changes in approach such as a
change in settlement strategy in dealing with these matters. We record charges for the losses we anticipate incurring in connection
with litigation and claims against us when we conclude a loss is probable and we can reasonably estimate these losses. During the
years ended December 31, 2019, 2018 and 2017, we were not subject to any material litigation or claims and assessments.

Income Taxes

We recognize, measure, present and disclose in our financial statements, uncertain tax positions that we have taken or

Our policy is to classify interest and penalties related to unrecognized tax benefits as income tax expense.

Comprehensive Income

Comprehensive income is defined as the change in equity of a business enterprise during a period from transactions and

other events and circumstances from non-owner sources. Other than reported net income, comprehensive income includes foreign
currency translation adjustments, which are disclosed in the accompanying consolidated statements of comprehensive income.
There were no reclassifications out of comprehensive income for the years ended December 31, 2019, 2018 or 2017.

Accumulated other comprehensive loss consisted primarily of foreign currency translation adjustment losses of $4.0 million

and $3.9 million as of December 31, 2019 and 2018, respectively.

Restructuring

We record restructuring charges incurred in connection with consolidation or relocation of operations, exited business lines,
reductions in force, or distributor terminations. These restructuring charges, which reflect our commitment to a termination or exit
plan that will begin within twelve months, are based on estimates of the expected costs associated with site closure, legal matters,
contract terminations, severance payments, or other costs directly related to the restructuring. If the actual cost incurred exceeds
the estimated cost, an additional charge to earnings will result. If the actual cost is less than the estimated cost, a credit to earnings
will be recognized.

Earnings per Share

We compute basic earnings per share by dividing net income available for common stockholders by the weighted average

number of shares outstanding during the year. Except where the result would be anti-dilutive to net income per share, diluted
earnings per share has been computed using the treasury stock method and reflects the potential vesting of restricted common
stock and the potential exercise of stock options, as well as their related income tax effects.

F-13

The computation of basic and diluted net income per share is as follows:

Year ended December 31,
2019
2017
2018
(in thousands, except per share data)

Basic:

Net income available for common stockholders ................................................. $

17,934 $

22,943 $

17,177

Weighted average shares outstanding .................................................................

19,813

19,426

18,961

Basic earnings per share ......................................................................................... $

0.91 $

1.18 $

0.91

Diluted:

Net income available for common stockholders ................................................. $

17,934 $

22,943 $

17,177

Weighted-average shares outstanding ................................................................
Common stock equivalents, if dilutive ...............................................................

19,813
513

19,426
816

18,961
1,072

Shares used in computing diluted earnings per common share ..........................

20,326

20,242

20,033

Diluted earnings per share ...................................................................................... $

0.88 $

1.13 $

0.86

Shares excluded in computing diluted earnings per share as those shares would

be anti-dilutive ....................................................................................................

468

230

Recent Accounting Pronouncements

On January 1, 2019 we adopted the provisions of ASU No. 2016-02, Leases (Topic 842), subsequently amended by ASU

In June 2016, the FASB issued ASU 2016-13 Financial Instruments – Credit Losses (Topic 326), which requires a financial

In August 2018, the FASB issued ASU 2018-13 Fair Value Measurement (Topic 820), which modifies the disclosure

F-14

In December 2019, the FASB issued ASU 2019-12 Income Taxes (Topic 740), which simplifies the accounting for income

2. Acquisitions and Divestitures

Acquisitions are accounted for using the acquisition method and the acquired businesses’ results have been included in the

accompanying consolidated financial statements from their respective dates of acquisition. In each case for the acquisitions
disclosed below, pro forma information assuming the acquisition had occurred at the beginning of the earliest period presented is
not included as the impact is immaterial.

Our acquisitions have historically been made at prices above the fair value of the acquired identifiable assets, resulting in
goodwill, due to expectations of synergies that will be realized by combining businesses. These synergies include the use of our
existing sales channel to expand sales of the acquired businesses’ products, consolidation of manufacturing facilities, and the
leveraging of our existing administrative infrastructure.

The fair market valuations associated with these transactions fall within Level 3 (see Note 13) of the fair value hierarchy,

due to the use of significant unobservable inputs to determine fair value. The fair value measurements were calculated using
unobservable inputs, primarily using the income approach, specifically the discounted cash flow method. The amount and timing
of future cash flows within our analysis was based on our due diligence models, most recent operational budgets, long range
strategic plans and other estimates.

CardioCel and VascuCel Biologic Patches

On October 11, 2019 (the Closing Date), we entered into an Asset Purchase Agreement (APA) to acquire the biologic patch
business assets and a related technology license from Admedus Ltd and various of its subsidiaries (Admedus). The biologic patch
business consists of the CardioCel and VascuCel product lines, which are manufactured in a manner intended to reduce the risk of
calcification. The products are sold worldwide. On the same date, the parties entered into a Transition Services Agreement (TSA)
under which Admedus will manufacture and supply LeMaitre with inventory for a period of up to three years, unless extended in
writing by both parties. Revenues from the acquisition date through December 31, 2019 were $1.4 million.

Under the APA we agreed to pay Admedus a total of up to $15.3 million for the purchase of substantially all of its biologic

patch business assets, other than specifically identified Excluded Assets, plus $8.0 million for the technology licenses. The
acquired assets (in combination with the license) included inventory, intellectual property, permits and approvals, data and
records, and customer and supplier information, as well as a small amount of machinery and equipment. At closing, $14.2 million
of the purchase price was paid to Admedus. Shortly thereafter another $0.3 million was paid in connection with delivery of
audited financial statements of the acquired business to LeMaitre. Additional consideration may be payable as follows:

●
●
●
●

●

$0.7 million (the First Holdback) within 15 days following the first anniversary of the Closing Date;
$0.7 million (the Second Holdback) within 15 days following the third anniversary of the Closing Date;
$2.0 million (the Third Holdback) within 15 days following LMAT’s receipt of a CE mark on all acquired products;
$2.5 million if revenues in the first 12-month period following the Closing Date exceed $20 million, OR, $1.2
million if revenues in the first 12-month period following the Closing Date exceed $15 million;
$2.5 million if revenues in the second 12-month period following the Closing Date exceed $30 million, OR, $1.2
million if revenues in the first 12-month period following the Closing Date exceed $22.5 million; and
$0.5 million if by the first anniversary of the Closing Date Admedus extends the shelf life of the products from 36
months to at least 60 months

F-15

The following table summarizes the preliminary purchase price allocation:

Inventory and other ............................................................................... $
Intangible assets ....................................................................................
Goodwill ...............................................................................................

1,343
8,725
7,344

Purchase price ................................................................ $

17,412

Allocated
Fair Value
(in thousands)

The goodwill results from expected synergies of combining the acquired products and customer information to our existing

operations, and is deductible for tax purposes over 15 years.

The following table reflects the allocation of purchase consideration to the acquired intangible assets and related estimated

useful lives:

Customer relationships ............................................... $
Intellectual property ....................................................
Non-compete agreement .............................................
Tradenames .................................................................

Weighted
Average

Allocated
Fair Value Useful Life (years)
(in thousands)
5,562
2,335
361
467

12.0
8.0
5.0
8.0

Total intangible assets ............................................. $

8,725

The weighted-average amortization period of the acquired intangible assets was 10.4 years.

Tru-Incise Valve Cutter

On July 12, 2019, we entered into an agreement with UreSil, LLC, an Illinois limited liability company, to purchase the

remaining assets of their Tru-Incise valve cutter business, including distribution rights in the United States. We also entered into a
transition services agreement under which UreSil, LLC will continue to manufacture the acquired products for us for a specified
time, until we transition the full manufacturing process to our Burlington, Massachusetts facilities. Revenues from the acquisition
date through December 31, 2019 were $0.8 million.

The purchase price for the acquired assets, which included inventory, machinery and equipment, intellectual property, and

customer and supplier information, was $8.0 million. Of this amount, $6.8 million was paid at closing, with three follow-on
payments $0.4 million each due on the first, second and third anniversaries of the closing date. The deferred amounts totaling
$1.2 million were recorded at an acquisition-date fair value of $1.1 million using a discount rate of 4.19% to reflect the time value
of money between the acquisition date and the payment due dates. There are no contingencies associated with these holdback
payments, although they may be reduced for certain post-closing claims.

F-16

The following table summarizes the preliminary purchase price allocation:

Inventory ............................................................................................... $
Equipmentand supplies .........................................................................
Intangible assets ....................................................................................
Goodwill ...............................................................................................

Purchase price ................................................................ $

Allocated
Fair Value
(in thousands)

276
70
4,844
2,748

7,938

The goodwill results from expected synergies of combining the acquired products and customer information to our existing

operations, and is deductible for tax purposes over 15 years.

The following table reflects the allocation of purchase consideration to the acquired intangible assets and related estimated

useful lives:

Weighted
Average

Allocated
Fair Value Useful Life (years)
(in thousands)
3,945
563
233
103

13.0
7.0
5.0
7.0

Total intangible assets ............................................. $

4,844

The weighted-average amortization period of the acquired intangible assets was 11.8 years.

Cardial

On October 22, 2018, through a newly created subsidiary LeMaitre Cardial SAS, we entered into an agreement to acquire

the business assets of Cardial, a company located in Saint-Etienne, France and formerly owned by Becton, Dickinson and
Company. The Cardial business consists of the manufacturing of polyester vascular grafts, valvulotomes and surgical glue. On the
same date, the parties entered into a separate agreement notarial deed under which LeMaitre Cardial SAS purchased the building
and land previously owned by Cardial.

The purchase price for the acquired assets, including the land and building, inventory, machinery and equipment,
intellectual property, permits and approvals, data and records, and customer and supplier information, was €2.0 million ($2.3
million). At closing, €1.1 million ($1.3 million) was paid in cash, and €0.5 million ($0.5 million) of liabilities were assumed by
LeMaitre Cardial SAS. Another €0.4 million ($0.4 million) is due in two installments, half to be paid twelve months after the
closing date, and half eighteen months after the closing date. There are no contingencies associated with these holdback payments,
although they may be reduced depending upon the final results of a reconciliation of the value of inventory transferred, as outlined
in the agreement.

F-17

The following table summarizes the purchase price allocation:

Inventory ......................................................................................................... €
Land and building ...........................................................................................
Equipment and supplies ..................................................................................
Intangible assets ..............................................................................................
Bargain purchase gain .....................................................................................

Allocated
Fair Value
(in thousands)
2,419
750
94
623
(1,946)

Purchase price ................................................................................................. €

1,940

The bargain purchase gain was recorded to reflect the excess of the net assets acquired over the purchase price. We recorded
deferred taxes on this gain of €0.5 million ($0.6 million), resulting in a net gain of €1.4 million ($1.6 million).

The following table reflects the allocation of purchase consideration to the acquired intangible assets and related estimated

useful lives:

Customer relationships ............................................... €
Intellectual property ....................................................
Non-compete agreement .............................................
Tradenames .................................................................

Weighted
Average

Allocated
Fair Value Useful Life (years)
(in thousands)
250
237
46
90

16.0
5.0
5.0
5.0

Total intangible assets ............................................. €

623

The weighted-average amortization period of the acquired intangible assets was 9.4 years.

Applied Medical

On September 20, 2018, we entered into an agreement to acquire the assets of the embolectomy catheter business of

Applied Medical Resources Corporation (Applied). The clot management business consists of several embolectomy and
thrombectomy catheter product lines which are sold worldwide (approximately 60% in the U.S. and 40% outside the U.S.). On the
same date, we entered into a transition services agreement under which Applied will manufacture and supply us with inventory for
a period of twelve months, unless extended in writing by both parties.

The purchase price for the acquired assets, which included inventory, machinery and equipment, intellectual property,

permits and approvals, data and records, and customer and supplier information, was $14.2 million. Of this amount, $11 million
was paid at closing, another $2 million was paid 12 months following the closing date, and the final $1.2 million is due 24 months
following the closing date. The deferred amounts totaling $3.2 million were recorded at an acquisition-date fair value of $3.043
million using a discount rate of 3.75% to reflect the time value of money between the acquisition date and the payment due dates.

F-18

The following table summarizes the purchase price allocation. The purchase accounting is complete:

Allocated
Fair Value
(in thousands)

Inventory ............................................................................................... $
Equipment and supplies ........................................................................
Intangible assets ....................................................................................
Goodwill ...............................................................................................

739
416
6,527
6,361

Purchase price ................................................................ $

14,043

The goodwill results from expected synergies of combining the acquired products and customer information to our existing

operations, and is deductible for tax purposes over 15 years.

The following table reflects the allocation of purchase consideration to the acquired intangible assets and related estimated

useful lives:

Weighted
Average

Allocated
Fair Value Useful Life (years)
(in thousands)
4,475
1,316
530
206

16.0
7.0
5.0
7.0

Total intangible assets ............................................. $

6,527

The weighted-average amortization period of the acquired intangible assets was 13.0 years.

Reddick Divestiture

On April 5, 2018, we entered into an asset purchase agreement with Specialty Surgical Instrumentation, Inc. to sell the
inventory, intellectual property and other assets associated exclusively with our Reddick cholangiogram catheter and Reddick-
Saye screw product lines for $7.4 million. Concurrent with this divestiture we entered into a transition services agreement under
which we will continue to manufacture and supply these products to the buyer for a period of up to two years unless extended by
both parties, as well as a balloon supply agreement under which we will supply balloons, a component of the cholangiogram
catheters, to the buyer for a period of up to six years unless extended by both parties. We recorded a gain in connection with these
agreements of $5.9 million. The following table summarizes the allocation of consideration received:

Inventory ............................................................................................... $
Deferred revenue - transition services agreement .................................
Goodwill ...............................................................................................
Gain on divestiture ................................................................................

Consideration received ................................................... $

Allocated
Fair Value
(in thousands)

308
1,081
135
5,876

7,400

F-19

Under the terms of the transition services agreement, we agreed to manufacture the Reddick products for the buyer at prices
at or in some cases below our cost. We allocated a portion of the consideration received to this agreement to reflect it at fair value
and recorded it as deferred revenue. As the products were sold to the buyer, we amortized a portion of the deferred revenue to
adjust the gross margin on the sale to fair value on a specific identification basis. Additionally, as the Reddick product lines that
were divested constituted a business, we allocated a portion of our goodwill to this divestiture based on the fair value of the
business sold in relation to the fair value of the business that will be retained.

3. Inventory and Other Deferred Costs

Inventory and other deferred costs consists of the following:

December 31, 2019

December 31, 2018

Raw materials .......................................................... $
Work-in-process ......................................................
Finished products .....................................................
Other deferred costs .................................................

(in thousands)
5,359 $
6,238
23,032
4,898

Total inventory and other deferred costs .................. $

39,527 $

4,085
5,095
16,391
1,817

27,388

We had inventory on consignment at customer sites of $1.9 million and $1.7 million as of December 31, 2019 and 2018,

respectively.

In connection with our RestoreFlow allograft business, other deferred costs include costs incurred for the preservation of

human vascular tissues available for shipment, tissues currently in active processing, and tissues held in quarantine pending
release to implantable status. By federal law, human tissues cannot be bought or sold. Therefore, the tissues we preserve are not
held as inventory, and the costs we incur to procure and process vascular tissues are instead accumulated and deferred. These
costs include fixed and variable overhead costs associated with the cryopreservation process, including primarily direct labor
costs, tissue recovery fees, inbound freight charges, indirect materials and facilities costs. General and administrative expenses
and selling expenses associated with the provision of these services are expensed as incurred.

4. Property and Equipment

Property and equipment consists of the following:

Computers and equipment ................................................ $
Machinery and equipment ................................................
Building and leasehold improvements ..............................

As of December 31,

2019

2018

(in thousands)
4,623 $
16,245
11,758

Gross property and equipment ..........................................
Less accumulated depreciation .........................................

32,626
(17,772)

4,077
13,718
11,651

29,446
(15,344)

Property and equipment, net ............................................. $

14,854 $

14,102

During the years ended December 31, 2019, 2018 and 2017 we wrote off fully depreciated assets with gross values of $0.5

million, $1.0 million and $0.2 million, respectively.

F-20

Depreciation expense is as follows:

2019

Year ended December 31,
2018
(in thousands)

2017

Depreciation expense ............................. $

2,979 $

2,564 $

2,266

5. Goodwill and Other Intangibles

Goodwill consists of the following:

As of December 31,
2018
2019

Balance at beginning of year............................................... $
Additions for acquisitions ...............................................
Divestiture adjustment ....................................................
Effects of currency exchange ..........................................

29,868 $
10,092
-
(9)

23,844
6,361
(135)
(202)

Balance at end of year ......................................................... $

39,951 $

29,868

Other intangibles consist of the following:

December 31, 2019

December 31, 2018

Gross
Carrying Accumulated Carrying Carrying Accumulated Carrying
Value

Amortization Value

Gross

Value

Net

Product technology and intellectual

property ....................................... $

13,502 $

5,722 $

7,780 $

11,728 $

5,726 $

6,002

Trademarks, tradenames and

licenses ........................................
Customer relationships ....................
Other intangible assets ....................

1,807
18,215
1,725

702
3,364
568

1,105
14,851
1,157

2,246
10,065
2,145

1,561
3,806
1,399

685
6,259
746

(in thousands)

Total identifiable intangible assets .. $

35,249 $

10,356 $

24,893 $

26,184 $

12,492 $

13,692

These assets are being amortized over useful lives ranging from 2 to 16 years. The weighted-average amortization period

for these intangibles as of December 31, 2019, is 10.1 years. Amortization expense is included in general and administrative
expense and is as follows:

2019

Year ended December 31,
2018
(in thousands)

2017

Amortization expense ............................ $

2,437 $

1,760 $

1,790

During the year ended December 31, 2019 we wrote off fully amortized intangible assets with a gross values of $4.5
million. Estimated amortization expense for each of the next five fiscal years, based upon the intangible assets at December 31,
2019, is as follows:

2020

2021

Year ended December 31,
2022
(in thousands)

2023

2024

Amortization expense ..... $

3,224 $

2,956 $

2,751 $

2,677 $

2,477

F-21

6. Accrued Expenses and Other Long-term Liabilities

Accrued expenses consist of the following:

December 31, 2019

December 31, 2018

Compensation and related taxes ................................ $
Income and other taxes ..............................................
Professional fees ........................................................
Deferred revenue .......................................................
Other ..........................................................................

(in thousands)
8,550 $
1,003
40
-
4,421

7,973
2,927
43
552
4,352

Total ....................................................................... $

14,014 $

15,847

As discussed in Note 2 above, deferred revenue relates to our divestiture of the Reddick product line and an associated
transition services agreement that we entered into contemporaneously with the divestiture, under which we agreed to manufacture
and sell product to the buyer at prices at or below our cost. We allocated a portion of the consideration received from the
divestiture to this transition services agreement to reflect it at fair value and recorded it as deferred revenue. As the products were
sold to the buyer, we amortized a portion of the deferred revenue to adjust the gross margin on the sale to fair value on a specific
identification basis. This arrangement is now complete. The following table summarizes the changes in the deferred revenue
balance during the arrangement:

As of December 31,
2018
2019

Beginning contract liability balance ................................................................................................... $
Deferred revenue recorded .............................................................................................................
Revenue recognized upon satisfaction of performace obligations in the period .............................

552 $
-
(552)

-
1,081
(529)

Ending balance ................................................................................................................................... $

- $

552

Other long-term liabilities consist of the following:

December 31, 2019

December 31, 2018

Acquisition-related liabilities ................. $
Deferred rent ..........................................
Income taxes...........................................
Other.......................................................

(in thousands)
3,268 $
-
781
166

Total ................................................... $

4,215 $

1,326
530
559
196

2,611

F-22

7. Commitments and Contingencies

Leases

We conduct the majority of our operations in leased facilities, all of which are accounted for as operating leases, as they do
not meet the criteria for finance leases. Our principal worldwide executive, distribution, and manufacturing operations are located
at three adjacent 27,098 square foot, 27,289 square foot and 15,642 square foot leased facilities, as well as a fourth nearby 12,878
square foot leased facility, in Burlington, Massachusetts. In October 2019 we leased an additional 26,447 square foot building in
the same area from the same landlord from whom we lease the other four buildings, and also extended the lease terms on the other
four buildings. All five Burlington leases now expire in December 2030. In October 2019 we also leased a 2,258 square foot
facility in Hereford, England to house our United Kingdom sales and distribution business. In addition, our international
operations are headquartered at a 16,470 square foot leased facility located in Sulzbach, Germany, including approximately 3,630
square feet added in 2019, under a lease which expires in August 2023. This lease contains two five-year renewal options. We
also have smaller long-term leased sales, marketing and other facilities located in Arizona, Japan, Canada, Australia, Singapore
and China, and short-term leases in Italy, Spain and Illinois. Our lease in Canada contains a five-year renewal option exercisable
in February 2023. Our leases in Germany and Australia are subject to periodic rent increases based on increases in the consumer
price index as measured each September and May, respectively, with such increases applicable to the subsequent twelve months
of lease payments. None of our noncancelable lease payments include non-lease components such as maintenance contracts; we
generally reimburse the landlord for direct operating costs associated with the leased space. We have no subleases, and there are
no residual value guarantees associated with, or restrictive covenants imposed by, any of our leases. There were no assets held
under capital leases at December 31, 2019.

We also lease automobiles under operating leases in the U.S. as well as certain of our international subsidiaries. The terms

of these leases are generally three years, with older vehicles replaced by newer vehicles from time to time.

As discussed above under Recent Accounting Pronouncements, on January 1, 2019 we adopted the provisions of ASU

No. 2016-02, Leases (Topic 842), subsequently amended by ASU 2018-11, Leases (Topic 842): Targeted Improvements. Under
the new guidance, we are required to recognize the following for all leases (with the exception of short-term leases) at the
commencement date: a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a
discounted basis; and a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a
specified asset for the lease term.

Our most significant judgment involved in determining the amounts to initially record as lease liabilities and right-of-use

assets was the selection of a discount rate; because we have no debt we have no incremental borrowing rate to reference. We
therefore estimated an incremental borrowing rate using quotes from potential lenders as the primary inputs, augmented by other
available information. The resulting rate selected was 5.25%. We determined that it was appropriate to apply this single rate to our
portfolio of leases worldwide, as the lease terms and conditions are substantially similar, and because we believe our subsidiaries
would be unable to obtain borrowings on their own without a commitment of parent company support.

F-23

Additional information with respect to our leases is as follows:

Year ended
December 31,

2019
(in thousands)

Lease cost

Operating lease cost ....................................................................................................................................... $
Short-term lease cost .....................................................................................................................................
Total lease cost .............................................................................................................................................. $

1,756
291
2,047

Other information

Cash paid for amounts included in the measurement of operating lease liabilities ........................................ $

1,858

Right-of-use assets obtained in exchange for new operating lease liabilities ................................................ $

10,571

Weighted average remaining lease term - operating leases (years) ...............................................................

Weighted average discount rate - operating leases ........................................................................................

8.3

5.25 %

At December 31, 2019, the minimum noncancelable operating lease rental commitments with initial or remaining terms of

more than one year are as follows:

Year ending December 31,

2020 ................................................................................................ $
2021 ................................................................................................
2022 ................................................................................................
2023 ................................................................................................
2024 ................................................................................................
Thereafter ..................................................................................................
Adjustment to net present value as of December 31, 2019 ............................

2,419
2,351
1,942
1,686
1,573
10,301
(4,560 )

Minimum noncancelable lease liability ......................................................... $

15,712

Purchase Commitments

As part of our normal course of business, we have commitments to purchase $1.5 million of inventory through 2019. The
purchase commitments for inventory are to be used in operations over the normal course of business and do not represent excess
commitments or loss contracts.

F-24

8. Income Taxes

Income (loss) before income taxes is as follows:

2019

Year ended December 31,
2018
(in thousands)

2017

United States ...................................... $
Foreign ...............................................

17,989 $
3,690

22,256 $
6,188

17,778
3,328

Total ................................................... $

21,679 $

28,444 $

21,106

Certain of our foreign subsidiaries are included in the U.S. tax return as branches but are included as foreign for purposes of

the table above.

The provision (benefit) for income taxes is as follows:

Current:
Federal ........................................................ $
State ............................................................
Foreign ........................................................

Deferred:
Federal ........................................................
State ............................................................
Foreign ........................................................

2019

Year ended December 31,
2018
(in thousands)

2017

1,501 $
304
1,116

4,262 $
673
2,718

2,451
292
886

2,921

7,653

3,629

538
144
142

(1,512)
(145)
(495)

824

(2,152)

(268)
390
178

300

Provision for income taxes ......................... $

3,745 $

5,501 $

3,929

We have reviewed the tax positions taken, or to be taken, in our tax returns for all tax years currently open to examination
by a taxing authority. As of December 31, 2019, the gross amount of unrecognized tax benefits exclusive of interest and penalties
was $0.8 million, which may increase within the twelve months ending December 31, 2020. We remain subject to examination
until the statute of limitations expires for each respective tax jurisdiction. The statute of limitations will be open with respect to
these tax positions through 2027. A reconciliation of beginning and ending amount of our unrecognized tax benefits is as follows:

Unrecognized tax benefits at the beginning of year .......................... $
Additions for tax positions of current year ........................................
Additions for tax positions of prior years ..........................................
Reductions for settlements with taxing authorities. ...........................
Reductions for lapses of the applicable statutes of limitations ..........
Unrecognized tax benefits at the end of the year ............................... $

711 $
74
63
-
-
848 $

525 $
73
113
-
-
711 $

390
83
57
-
(5)
525

2019

2018
(in thousands)

2017

F-25

Deferred taxes are attributable to the following temporary differences:

Deferred tax assets:
Inventory ................................................................................... $
Net operating loss carryforwards ..............................................
Tax credit carryforwards ...........................................................
Capital loss carryforwards ........................................................
Reserves and accruals ...............................................................
Operating lease liabilities ..........................................................
Intangible assets ........................................................................
Stock options ............................................................................
Other .........................................................................................

As of December 31,
2018
2019

(in thousands)

840 $
1,289
944
277
787
3,343
2,764
342
20

976
1,421
828
279
802
-
2,737
373
91

Total deferred tax assets ...........................................................

10,606

7,507

Deferred tax liabilities:
Property and equipment ............................................................
Goodwill ...................................................................................
Operating lease right-of-use assets ...........................................
Foreign branch deferred offset ..................................................
Other .........................................................................................

(1,520)
(3,459)
(3,224)
(923)
(187)

(1,416)
(3,023)
-
(1,032)
(50)

Total deferred tax liabilities ......................................................

(9,313)

(5,521)

Net deferred tax assets before valuation allowance ..................

1,293

1,986

Valuation allowance .................................................................

(1,388)

(1,255)

Net deferred tax liabiltity .................................................. $

(95) $

731

Deferred tax classification

Long-term deferred tax asset ............................................. $
Long-term deferred tax liability ........................................

1,084 $
(1,179)

1,215
(484)

Net long-term deferred tax liability ................................... $

(95) $

731

In 2017, we increased our valuation by a net $0.2 million mainly attributable to Massachusetts credit carryforwards. In

2018, we decreased our valuation allowance by a net $0.7 million mainly attributable to Australian net operating loss and capital
loss carry forwards that are now expected to be realized. In 2019, we increased our valuation allowance by $0.1 million mainly
attributable to Australian net operating loss carry forwards and Massachusetts credit carryforwards.

As of December 31, 2019, we have provided a valuation allowance of $1.4 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. The valuation allowance against our deferred tax assets may require adjustment in the future based on changes in
the mix of temporary differences, changes in tax laws, and operating performance.

Realization of our deferred tax assets is dependent on our generating sufficient taxable income in future periods. Although

we believe it is more likely than not that future taxable income will be sufficient to allow us to recover substantially all of the
value of our deferred tax assets remaining after we apply the valuation allowances, realization is not assured and future events
could cause us to change our judgment. In the event that actual results differ from our estimates, or we adjust these estimates in
the future periods, further adjustments to our valuation allowance may be recorded, which could materially impact our financial
position and net income (loss) in the period of the adjustment.

F-26

As of December 31, 2019, we have net operating loss carryforwards in Australia of $1.2 million that do not expire, in

France of $2.5 million that do not expire, in Spain of $0.9 million that do not expire, and in Norway of $0.1 million that do not
expire. We have a capital loss carryforward in Australia of $0.9 million that does not expire. We also have state tax credit
carryforwards of approximately $1.5 million that are available to reduce future tax liabilities, which begin to expire in 2021, or
can be carried forward indefinitely.

In December 2018, we reevaluated our international operations and as a result, are no longer indefinitely reinvested with

respect to undistributed earnings from our German and Australian subsidiaries. There was no material deferred tax expense
recorded for foreign and state tax costs associated with the future remittance of these undistributed earnings. We remain
permanently reinvested with respect to undistributed earnings from our other foreign subsidiaries. It is not practicable to estimate
the amount of deferred tax liability, if any, with respect to these permanently reinvested undistributed earnings.

A reconciliation of the federal statutory rate to our effective tax rate is as follows:

2019

2018

2017

Federal statutory rate .................................
State tax, net of federal benefit ..................
Effect of foreign taxes................................
Federal tax on foreign income ...................
Valuation allowance ..................................
Foreign deferred tax liability offset ...........
Manufacturing deduction ...........................
Research & development tax credits ..........
Stock options .............................................
Uncertain tax positions ..............................
Other permanent differences ......................
Change in tax laws .....................................
Deferred tax remeasurement ......................
Other ..........................................................

21.0%
1.9%
2.1%
0.8%
0.6%
(0.4%)
0.0%
(1.2%)
(8.8%)
1.0%
0.5%
0.0%
0.0%
(0.2%)

21.0%
1.4%
3.8%
1.4%
(3.2%)
(0.3%)
0.0%
(0.7%)
(3.3%)
0.8%
(0.7%)
0.0%
0.0%
(0.9%)

35.0%
1.7%
(0.6%)
1.7%
0.1%
(0.2%)
(1.5%)
(0.6%)
(15.8%)
0.6%
1.0%
2.9%
(5.0%)
(0.7%)

Effective tax rate ........................................

17.3%

19.3%

18.6%

In August 2018, the German tax authority commenced an audit of our German subsidiary for the tax years 2013 through

2016. We expect to conclude this audit in early 2020 and pay an immaterial amount of additional German tax. We are not
currently under audit in any other tax jurisdictions.

As of December 31, 2019, a summary of the tax years that remain subject to examination in our most significant tax

jurisdictions are:

United States .....................................................
Foreign ..............................................................

2016 and forward
2012 and forward

9. Stockholders’ Equity

Authorized Shares

Our certificate of incorporation, as amended and restated from time to time, authorizes the issuance of up to 37,000,000

shares of common stock and up to 3,000,000 shares of undesignated preferred stock.

Under the terms of our certificate of incorporation, our board of directors is authorized to issue shares of the preferred stock
in one or more series without stockholder approval. Our board of directors has the discretion to determine the rights, preferences,
privileges and restrictions, including voting rights, dividend rights, conversion rights, redemption privileges and liquidation
preferences, of each series of preferred stock. Currently, we have no shares of preferred stock outstanding.

F-27

Stock Award Plans

In May 2006 we approved a 2006 Stock Option and Incentive Plan (as subsequently amended, the 2006 Plan), which
became effective upon our initial public offering. The 2006 Plan allows for the granting of an aggregate 5,500,000 shares of
incentive stock options, non-qualified stock options, stock appreciation rights, RSUs, unrestricted stock awards, and deferred
stock awards to our officers, employees, directors, and consultants. Incentive stock options are required to be issued at not less
than fair market value at the date of the grant and generally vest over four or five years. The term of the options is determined by
our Board of Directors but in no event will exceed ten years from date of grant. In connection with the adoption of the 2006 Plan,
no further option grants were permitted under any previous stock option plans and any expirations, cancellations, or terminations
under the previous plans are available for issuance under the 2006 Plan. We may satisfy awards upon exercise of stock options or
RSUs with either newly issued shares or treasury shares. The total number of shares currently authorized for the 2006 Plan is
7,118,003 shares, of which 1,089,749 remain available for grant as of December 31, 2019.

We have computed the fair value of employee stock options granted each year using the following weighted average

assumptions:

Dividend yield ..................................................................................
Volatility ..........................................................................................
Risk-free interest rate .......................................................................
Weighted average expected option term (in years) ..........................
Weighted average fair value per share of options granted ................ $

0.96%
42.8%
1.7%
4.7
12.51 $

1.20%
41.3%
2.7%
4.8
8.28 $

0.70%
39.1%
2.2%
4.6
10.37

2019

2018

2017

A summary of option activity as of December 31, 2019 and the year then ended is presented below:

Weighted
Number Average
of Shares Exercise Price Contractual Term Value

Weighted Average Aggregate

Intrinsic

Remaining

Balance outstanding at December 31, 2018 (1) ..................... 1,462,575 $

16.41

(in years)
4.54

$ 12,214,422

Granted .................................................................................. 195,379 $
Exercised (2) ......................................................................... (509,693 ) $
Canceled / Expired ................................................................ (101,167 ) $
Balance outstanding at December 31, 2019 (3) ..................... 1,047,094 $

Vested and exercisable at December 31, 2019 (4) ................ 309,501 $
Expected to vest at December 31, 2019 ................................ 737,593 $
Total ...................................................................................... 1,047,094

35.53
9.53
17.90
23.19

19.64
24.68

4.31

3.50
4.65

$ 11,488,292

$ 13,366,595

$ 5,046,733

(1) The aggregate intrinsic value represents the difference between the exercise price and $23.64, the closing price of our stock

on December 31, 2018, for all in-the-money options outstanding.

(2) The aggregate intrinsic value of shares exercised represents the difference between the exercise price and the closing price

of our stock on the date of exercise.

(3) The aggregate intrinsic value represents the difference between the exercise price and $35.95, the closing price of our stock

on December 31, 2019, for all in-the-money options outstanding.

(4) The aggregate intrinsic value represents the difference between the exercise price and $35.95, the closing price of our stock

on December 31, 2019, for all in-the-money options vested and exercisable as of that date.

F-28

Restricted Stock Units

A summary of our RSU activity is as follows:

Weighted
Average
Grant Date
Fair Value

Balance outstanding at December 31, 2018 ..............................

217,895 $

21.21

Granted .....................................................................................
Vested (1) .................................................................................
Canceled ...................................................................................

56,567 $
(61,058) $
(24,723) $

35.41
18.46
22.19

Balance outstanding at December 31, 2019 ..............................

188,681 $

26.14

(1) The number of RSUs vested includes the shares that we withheld on behalf of employees

to satisfy minimum statutory tax withholding requirements.

The fair values of the RSUs that vested during 2019, 2018, and 2017 were $2.1 million, $1.9 million, and $1.9 million,

respectively.

We repurchase shares of our common stock in order to cover any minimum tax withholding liability associated with RSU

vestings. A summary of our repurchases is as follows:

Shares of common stock repurchased .......................................
Average per share repurchase price .......................................... $
Aggregage purchase price (in thousands) ................................. $

20,524
33.28 $
683 $

21,410
34.62
741

2019

2018

Stock-based Compensation

The components of stock-based compensation expense included in the consolidated statements of operations are as follows:

Stock option awards ............................................... $
Restricted stock units .............................................

1,580 $
1,062

1,457 $
892

1,612
644

Total stock-based compensation ..................... $

2,642 $

2,349 $

2,256

2019

2018
(in thousands)

2017

Stock-based compensation is included in our statements of operations as follows:

2019

2018
(in thousands)

2017

Cost of sales ........................................................... $
Sales and marketing ...............................................
General and administrative .....................................
Research and development .....................................

310 $
544
1,509
279

272 $
529
1,293
255

188
403
1,484
181

Total stock-based compensation ..................... $

2,642 $

2,349 $

2,256

We expect to record the unamortized portion of share-based compensation expense of $10.4 million for existing stock

options and RSUs outstanding at December 31, 2019, over a weighted-average period of 3.8 years.

F-29

Stock Repurchase Plans

On February 14, 2019, our Board of Directors authorized the repurchase of up to $10.0 million of the Company’s common

stock through transactions on the open market, in privately negotiated purchases or otherwise until February 14, 2020. On
February 13, 2020, the Board extended the term of the repurchase program to February 14, 2021. The repurchase program may be
suspended or discontinued at any time. To date we have not made any repurchases under this program.

Dividends

In February 2011, our Board of Directors approved a policy for the payment of quarterly cash dividends on our common

stock. Future declarations of quarterly dividends and the establishment of future record and payment dates are subject to approval
by our Board of Directors on a quarterly basis. The dividend activity for the periods presented is as follows:

Record Date

Payment Date

Fiscal Year 2019

March 22, 2019
May 22, 2019
August 21, 2019
November 20, 2019

April 5, 2019 $
June 6, 2019 $
September 5, 2019 $
December 5, 2019 $

Fiscal Year 2018

March 22, 2018
May 22, 2018
August 22, 2018
November 20, 2018

April 5, 2018 $
June 7, 2018 $
September 6, 2018 $
December 6, 2018 $

Per Share
Amount

Dividend
Payment
(in thousands)

0.085 $
0.085 $
0.085 $
0.085 $

0.070 $
0.070 $
0.070 $
0.070 $

1,672
1,672
1,691
1,701

1,351
1,353
1,369
1,372

On February 13, 2020, our Board of Directors approved a quarterly cash dividend on our common stock of $0.095 per share

payable on March 19, 2020, to stockholders of record at the close of business on March 3, 2020, which will total approximately
$1.9 million.

10. Profit-Sharing Plan

We offer a 401(k) profit-sharing plan (the Plan) covering eligible U.S. employees to make tax deferred contributions, a
portion of which are matched by us. We may make discretionary profit sharing contributions to the Plan in an amount determined
by our Board of Directors. Our contributions vest ratably over six years of employment and amounted to approximately $0.4
million, $0.3 million and $0.2 million for 2019, 2018 and 2017, respectively.

11. Segment and Enterprise-wide Disclosures

The FASB establishes standards for reporting information regarding operating segments in financial statements. Operating

segments are identified as components of an enterprise that engage in business activities for which separate, discrete financial
information is available and is regularly reviewed by the chief operating decision-maker in making decisions on how to allocate
resources and assess performance. We view our operations and manage our business as one operating segment. No discrete
operating information is prepared by us except for sales by product line and operations by legal entity for local reporting purposes.

F-30

Most of our revenues are generated in the United States, Germany, and other European countries, Canada, the United

Kingdom and Japan, and substantially all of our assets are located in the United States, Australia and France. Net sales to
unaffiliated customers by country were as follows:

2019

Year ended December 31,
2018
(in thousands)

2017

United States .......................................................... $
Germany .................................................................
Other countries .......................................................

63,130 $
12,400
41,702

59,078 $
12,445
34,045

58,470
11,576
30,821

Net sales ................................................................. $

117,232 $

105,568 $

100,867

Total long-term assets by country, including property and equipment, net and right-of-use leased assets were as follows:

As of December 31,
2018
2019

(in thousands)

United States ....................................................................... $
Australia..............................................................................
France .................................................................................
Germany .............................................................................
Other countries....................................................................

24,885 $
1,499
1,089
1,405
1,184

11,006
1,460
1,071
430
135

Total long-term assets ......................................................... $

30,062 $

14,102

12. Supplemental Cash Flow Information

Supplemental disclosures of cash flow information are as follows:

Cash paid for income taxes, net ......................... $

4,817 $

5,521 $

3,146

2019

Year ended December 31,
2018
(in thousands)

2017

13. Fair Value Measurements

The fair value accounting guidance requires that assets and liabilities carried at fair value be classified and disclosed in one

of the following three categories:

•
•

•

Level 1 — Quoted prices in active markets for identical assets or liabilities.
Level 2 — Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets
and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not
active; or other inputs that are observable or can be corroborated by observable market data.
Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair
value of the assets or liabilities. This includes certain pricing models, discounted cash flow methodologies and
similar techniques that use significant unobservable inputs.

Level 1 assets being measured at fair value on a recurring basis as of December 31, 2019 included our short-term

investment mutual fund account.

We had no Level 2 assets being measured at fair value on a recurring basis as of December 31, 2019.

F-31

As discussed in Notes 1 and 2, several of our acquisition-related assets and liabilities have been measured using Level 3

techniques. During 2019, we recorded contingent liabilities associated with our acquisition of the CardioCel and VascuCel patch
business from Admedus. The agreement includes the potential for us to pay up to $7.8 million of additional consideration beyond
payments made to date, with $0.3 million contingent upon the delivery of audited financial statement of the acquired business to
us; $2.0 million contingent on LeMaitre Vascular’s success in obtaining CE marks on the acquired products, $0.5 million
contingent upon Admedus’ success in extending the shelf life of the acquired products as specified in the agreement, and another
$5.0 million contingent on the achievement of specified levels of revenues in the first 12 and 24 months following the acquisition
date. This additional contingent consideration was initially valued in total at $2.0 million and will being re-measured each
reporting period until the payment requirement ends, with any adjustments reported in income from operations. The following
table provides a rollforward of the fair value of these liabilities, as determined by Level 3 unobservable inputs including
management’s forecast of future revenues for the acquired business, as well as, management’s estimates of the likelihood of
Obtaining CE marks on the acquired products, as well as of Admedus’ ability to extend the shelf life of the acquired products. The
contingent payment related to the delivery of audited financial statements of the business was paid in November 2019 upon
satisfaction of the deliverable.

2019

Year ended December 31,
2018
(in thousands)

2017

Beginning balance .................................................. $
Additions ................................................................
Payments ................................................................
Change in fair value included in earnings ..............

72 $
1,989
(309)
12

1,300 $
-
(1,199)
(29)

1,320
-
(126)
106

Ending balance ....................................................... $

1,764 $

72 $

1,300

14. Quarterly Financial Data (unaudited)

Three months ended

2019

March 31

June 30

September 30 December 31

(in thousands, except per share data)

Total net sales ................................................ $
Gross profit ....................................................
Income (loss) from operations .......................
Net income ....................................................
Earnings per share

Basic .......................................................... $
Diluted ....................................................... $

28,479 $
19,464
4,435
3,513

0.18 $
0.17 $

29,483 $
20,315
5,915
4,624

0.23 $
0.23 $

29,100 $
20,166
5,905
5,184

0.26 $
0.25 $

30,170
19,908
4,928
4,613

0.23
0.23

Three months ended

2018

March 31

June 30

September 30 December 31

(in thousands, except per share data)

Basic .......................................................... $
Diluted ....................................................... $

25,994 $
18,474
4,862
3,853

0.20 $
0.19 $

27,020 $
18,992
11,541
8,751

0.45 $
0.43 $

24,165 $
17,255
4,613
4,314

0.22 $
0.21 $

28,389
19,218
7,193
6,025

0.31
0.30

F-32

15. Accumulated Other Comprehensive Income (Loss)

2019

Year ended December 31,
2018
(in thousands)

2017

Beginning balance ............................................................................. $

(3,900) $

(2,289) $

(4,583)

Other comprehensive income (loss) before reclassifications ............
Amounts reclassified from accumulated other comprehensive loss ..

(107)
-

(1,611)
-

2,294
-

Ending Balance ................................................................................. $

(4,007) $

(3,900) $

(2,289)

Changes to our accumulated other comprehensive loss consisted primarily of foreign currency translation for the years

ended December 31, 2019, 2018 and 2017.

F-33

This page intentionally left blank

Board of Directors

Lawrence J. Jasinski 1, 2, 3
Chief Executive Officer
ReWalk Robotics Ltd.

Director since 2003

George W. LeMaitre
Chairman & Chief Executive Officer
LeMaitre Vascular, Inc.

Director since 1992

John J. O’Connor1
Retired Vice Chairman of Services
PricewaterhouseCoopers LLP

Director since 2008

Stockholder Information

Price Range of Common Stock
Our common stock trades on the Nasdaq Global
Market under the symbol “LMAT”. The following
table sets forth the high and low closing sale
prices of our common stock for the periods
indicated.

Price Range

2018 High Low

First Quarter $37.13

$30.50

Second Quarter $41.02

$31.45

Third Quarter $38.74

$34.02

Fourth Quarter $37.23

$22.01

2019 High Low

First Quarter $31.55

$22.45

Second Quarter $30.79

$25.55

Third Quarter $35.78

$27.91

Fourth Quarter $36.21

$31.27

Joseph P. Pellegrino, Jr.
Chief Financial Officer & Secretary
LeMaitre Vascular, Inc.

Director since 2016

John A. Roush1, 2
Operating Executive Advisor
ACON Investments, LLC

Director since 2014

1 Member of the Audit Committee
2 Member of the Compensation Committee
3 Member of the Nominating and Corporate

Governance Committee

David B. Roberts
President
LeMaitre Vascular, Inc.

Director since 2001

Bridget A. Ross3
Chief Executive Officer
ChroniSense Medical, Ltd.

Director since 2020

Transfer Agent
Inquiries concerning the transfer or exchange of
shares, lost stock certificates, duplicate mailings
or changes of address should be directed to our
transfer agent at:

Investor Information Requests
Investors, stockholders and security analysts
seeking information about us should refer to our
investor relations website at ir.lemaitre.com or call
Investor Relations at 781-221-2266.

Computershare Investor Services
250 Royall Street
Canton, MA 02021

Independent Auditors
Grant Thornton LLP
Boston, MA
Auditors since 2015

Annual Meeting
The annual meeting of stockholders will take
place on Thursday, July 30, 2020, beginning at
10:00 a.m. at our offices at 53 Second Avenue,
Burlington, Massachusetts.

Other Information
Reports on Form 10-K and Form 10-Q, Current
Reports on Form 8-K and amendments to those
reports are available free of charge through
the investor relations section of our website at
ir.lemaitre.com. Copies of these reports are also
available by writing us at:

Investor Relations
LeMaitre Vascular, Inc.
63 Second Avenue
Burlington, MA 01803 USA

Executive Committee

George W. LeMaitre
Chairman & Chief Executive Officer

David B. Roberts
President

Ryan H. Connelly
Vice President, Research & Development

StÉphane Maier
Vice President, EMEA Operations

Giovannella Deiure
Vice President, Sales - Southern Europe

Jonathan W. Ngau
Vice President, Information Technology

Joseph P. Pellegrino, Jr.
Chief Financial Officer

Helen Goulding
Director, Sales - Northern Europe

Trent G. Kamke
Senior Vice President, Operations

Laurie A. Churchill
Senior Vice President & General Counsel

Kimberly L. Cieslak
Vice President, Marketing

Andrew Hodgkinson
Senior Vice President, Clinical Regulatory & Quality
Affairs

Chance Kriesel
Vice President, Sales, The Americas

Roli Kumar-Choudhury
Vice President, Quality Affairs

Jacob Petersen
Vice President, Asia-Pac

James Russell
Director, Operations

Xiang Zhang
Vice President, Regulatory Affairs

Corporate
Headquarters
LeMaitre Vascular, Inc.
63 Second Avenue
Burlington, MA 01803
USA

Tel: +1-781-221-2266
Fax: +1-781-425-5049

International
Headquarters
LeMaitre Vascular GmbH
Otto-Volger-Str. 5a/b
65843 Sulzbach/Ts.
Germany

Tel: +49-(0)6196-659230
Fax: +49-(0)6196-527072

Asia-Pacific
Headquarters
LeMaitre Vascular Sinagapore, Pte. Ltd.
9 Straits View
Marina One West Tower #05-07
018937, Singapore

Tel: +65 6813 0281