Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2020

Accounting Policies [Abstract]

Basis of Accounting, Policy [Policy Text Block]

Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (GAAP) for interim financial information and with the instructions to Form

10

-Q and Article

10

of Regulation S-

X.

Accordingly, they do

not

include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments, consisting only of normal, recurring adjustments considered necessary for a fair presentation of the results of these interim periods have been included. Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. Actual results

may

differ from these estimates. Our estimates and assumptions, including those related to bad debts, inventories, intangible assets, sales returns and discounts, share-based compensation, and income taxes are updated as appropriate. The results for the

three

months ended

March 31, 2020

are

not

necessarily indicative of results to be expected for the entire year. The information contained in these interim financial statements should be read in conjunction with our audited consolidated financial statements as of and for the year ended

December 

31,

2019,

including the notes thereto, included in our Form

10

-K filed with the Securities and Exchange Commission (SEC) on

March 

11,

2020.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the unaudited consolidated financial statements and accompanying notes to unaudited consolidated financial statements. While the Company has

not

experienced a material adverse impact on its financial condition and results of operations from the COVID-

19

pandemic to date, there is heightened volatility and uncertainty in customer demand and the worldwide economy in general, and the Company is anticipating decreased revenues for its products in the near future.  However, the magnitude and duration of the impact on our revenues and operations from COVID-

19

is uncertain and cannot currently be reasonably estimated at this time. The Company is

not

aware of any specific event or circumstance that would require an update to its accounting estimates or adjustments to the carrying value of its assets and liabilities as of

May 8, 2020,

the issuance date of this Quarterly Report on Form

10

-Q. Actual results could differ from those estimates, particularly if the Company experiences material impacts from COVID-

19.

Consolidation, Policy [Policy Text Block]

Consolidation

Our consolidated financial statements include the accounts of LeMaitre Vascular and the accounts of our wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation.

Revenue from Contract with Customer [Policy Text Block]

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.

We recognize revenue under the provisions of ASU

2014

-

09,

Revenue from Contracts with Customers (Topic

606

)

. 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 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):  

	Three months ended March 31,
	2020		2019
	($ in thousands)
Americas	$	18,336	$	16,375
Europe, Middle East and Africa		10,350		10,013
Asia/Pacific Rim		1,865		2,091
Total	$	30,551	$	28,479

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.

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 returns experience, which requires judgment. Our cost of replacing defective products has

not

been material and is accounted for at the time of replacement.

New Accounting Pronouncements, Policy [Policy Text Block]

Recent Accounting Pronouncements

In

June 2016,

the FASB issued ASU

No.

2016

-

13,

Financial Instruments – Credit Losses (Topic

326

): Measurement of Credit Losses on Financial Instruments (“ASU

2016

-

13”

), which modifies the measurement of expected credit losses of certain financial instruments, including accounts receivable. The new standard was effective for us beginning

January 

1,

2020.

The adoption of this standard did

not

have a material impact on our financial statements.

In

January 2017,

the FASB issued ASU

2017

-

04,

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 was effective for us beginning

January 

1,

2020.

The adoption of this standard did

not

have a material impact on our financial statements.

 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 was effective for us beginning

January 

1,

2020.

The adoption of this standard did

not

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.