Merit Medical Systems, Inc. (NASDAQ:MMSI), a leading manufacturer
and marketer of proprietary disposable devices used in
interventional, diagnostic and therapeutic procedures, particularly
in cardiology, radiology and endoscopy, today announced sales of
$157.0 million for the quarter ended September 30, 2016, an
increase of 15.3% over sales of $136.1 million for the quarter
ended September 30, 2015. On a constant currency basis, sales
for the quarter ended September 30, 2016 would have been up 16.1%
over sales for the comparable quarter of 2015. For the nine months
ended September 30, 2016, Merit’s sales were $446.1 million, an
increase of 10.5% over sales of $403.7 million, for the nine months
ended September 30, 2015. On a constant currency basis, sales
for the nine months ended September 30, 2016 would have been up
11.4% over sales for the comparable period of 2015.
Merit’s GAAP net income for the third quarter of
2016 was $1.0 million, or $0.02 per share, compared to $4.8
million, or $0.11 per share, for the third quarter of 2015, down
primarily as a result of restructuring costs related to the
acquisition of DFINE, Inc. (“DFINE”) in July 2016. Merit’s non-GAAP
net income for the quarter ended September 30, 2016 was $11.5
million, or $0.26 per share, up 28.8% compared to $8.9 million, or
$0.20 per share, for the quarter ended September 30,
2015.
Merit’s GAAP net income for the nine months
ended September 30, 2016 was $12.6 million, or $0.28 per share,
compared to $17.4 million, or $0.39 per share, for the comparable
period of 2015, down primarily as a result of restructuring costs
related to the acquisition of DFINE in July 2016. Merit’s
non-GAAP net income for the nine months ended September 30, 2016
was $31.4 million, or $0.70 per share, up 13.0% compared to $27.8
million, or $0.62 per share, for the nine months ended September
30, 2015.
Merit’s sales by category for the three and
nine-month periods ended September 30, 2016, compared to the
corresponding periods in 2015, were as follows:
|
|
|
Three Months Ended |
|
|
|
Nine Months Ended |
|
|
|
September 30, |
|
|
|
September 30, |
|
% Change |
|
|
2016 |
|
|
|
2015 |
|
|
% Change |
|
|
2016 |
|
|
|
2015 |
|
Cardiovascular |
|
|
|
|
|
|
|
|
|
|
|
Stand-alone
devices |
|
35.0 |
% |
|
$ |
51,901 |
|
|
$ |
38,451 |
|
|
|
23.0 |
% |
|
$ |
141,627 |
|
|
$ |
115,125 |
|
Custom kits and
procedure trays |
|
0.8 |
% |
|
|
30,230 |
|
|
|
29,986 |
|
|
|
1.6 |
% |
|
|
89,174 |
|
|
|
87,738 |
|
Inflation devices* |
|
2.6 |
% |
|
|
18,364 |
|
|
|
17,894 |
|
|
|
-0.9 |
% |
|
|
54,768 |
|
|
|
55,284 |
|
Catheters |
|
20.1 |
% |
|
|
29,529 |
|
|
|
24,587 |
|
|
|
14.0 |
% |
|
|
82,274 |
|
|
|
72,183 |
|
Embolization
devices |
|
-1.1 |
% |
|
|
11,207 |
|
|
|
11,328 |
|
|
|
1.8 |
% |
|
|
33,937 |
|
|
|
33,323 |
|
CRM/EP |
|
7.5 |
% |
|
|
9,368 |
|
|
|
8,711 |
|
|
|
8.2 |
% |
|
|
26,888 |
|
|
|
24,854 |
|
Total |
|
15.0 |
% |
|
|
150,599 |
|
|
|
130,957 |
|
|
|
10.3 |
% |
|
|
428,668 |
|
|
|
388,507 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Endoscopy |
|
|
|
|
|
|
|
|
|
|
|
Endoscopy devices |
|
24.3 |
% |
|
|
6,376 |
|
|
|
5,129 |
|
|
|
14.5 |
% |
|
|
17,455 |
|
|
|
15,238 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
15.3 |
% |
|
$ |
156,975 |
|
|
$ |
136,086 |
|
|
|
10.5 |
% |
|
$ |
446,123 |
|
|
$ |
403,745 |
|
|
|
|
|
|
|
|
|
|
|
|
|
*The
year-over-year sales decrease in inflation devices for the nine
months ended September 30, 2016 can be |
attributed primarily to reduced sales to a large OEM customer
and two large distributors. |
“The results of the third quarter were
outstanding,” said Fred P. Lampropoulos, Merit’s Chairman and Chief
Executive Officer. “Despite a historically slow summer sales
cycle and the integration and training required as a result of the
DFINE acquisition, our sales and operations staff executed with
precision and professionalism.”
Lampropoulos also reported that Merit received a
subpoena from the U.S. Department of Justice requesting documents
and other information regarding certain marketing and promotional
practices relating to the Company's products. “We are in the
process of responding to the subpoena and intend to cooperate,”
Lampropoulos said. “As we deem appropriate, we intend to
provide updates regarding the matter in the future.”
2016 GUIDANCEBased upon information currently
available to Merit's management, Merit estimates that for the year
ending December 31, 2016, Merit's GAAP net income per share for
2016 will be in the range of $0.45-$0.51. This estimate
reflects the intangible amortization and one-time reorganization
costs related to the acquisition of DFINE. Merit’s non-GAAP
net income per share estimate remains at $0.97-$1.03.
CONFERENCE CALLMerit will hold its investor
conference call (conference ID 86894191) today, Wednesday, October
26, 2016, at 5:00 p.m. Eastern (4:00 p.m. Central, 3:00 p.m.
Mountain, and 2:00 p.m. Pacific). The domestic telephone
number is (844) 578-9672, and the international number is (508)
637-5656. A live webcast will also be available for the
conference call at merit.com.
|
|
|
|
|
BALANCE SHEET |
|
|
|
|
(In
thousands) |
|
|
|
|
|
September 30, |
|
December 31, |
|
|
|
2016 |
|
|
|
2015 |
|
|
|
(Unaudited) |
|
|
|
ASSETS |
|
|
|
|
Current Assets |
|
|
|
|
Cash and cash
equivalents |
$ |
17,318 |
|
|
$ |
4,177 |
|
|
Trade
receivables, net |
|
79,697 |
|
|
|
70,292 |
|
|
Employee
receivables |
|
176 |
|
|
|
217 |
|
|
Other
receivables |
|
3,350 |
|
|
|
6,799 |
|
|
Inventories |
|
116,908 |
|
|
|
105,999 |
|
|
Prepaid
expenses |
|
7,005 |
|
|
|
5,634 |
|
|
Prepaid income
taxes |
|
3,059 |
|
|
|
2,955 |
|
|
Deferred income
tax assets |
|
6,408 |
|
|
|
7,025 |
|
|
Income tax
refunds receivable |
|
373 |
|
|
|
905 |
|
|
Total
Current Assets |
|
234,294 |
|
|
|
204,003 |
|
|
|
|
|
|
|
|
|
|
|
Property and
equipment, net |
|
278,626 |
|
|
|
267,778 |
|
|
Intangibles,
net |
|
186,714 |
|
|
|
109,354 |
|
|
Goodwill |
|
212,825 |
|
|
|
184,472 |
|
|
Other assets |
|
16,296 |
|
|
|
13,121 |
|
|
Total Assets |
$ |
928,755 |
|
|
$ |
778,728 |
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
Current
Liabilities |
|
|
|
|
|
|
|
|
Trade
payables |
|
30,192 |
|
|
|
37,977 |
|
|
Accrued
expenses |
|
44,927 |
|
|
|
37,846 |
|
|
Current portion
of long-term debt |
|
10,000 |
|
|
|
10,000 |
|
|
Advances from
employees |
|
544 |
|
|
|
589 |
|
|
Income taxes
payable |
|
809 |
|
|
|
1,498 |
|
|
Total Current Liabilities |
|
86,472 |
|
|
|
87,910 |
|
|
|
|
|
|
|
|
|
|
|
|
Deferred income tax
liabilities |
|
22,042 |
|
|
|
10,985 |
|
|
Liabilities related to
unrecognized tax benefits |
|
402 |
|
|
|
768 |
|
|
Deferred compensation
payable |
|
9,000 |
|
|
|
8,500 |
|
|
Deferred credits |
|
2,593 |
|
|
|
2,721 |
|
|
Long-term debt |
|
317,760 |
|
|
|
197,593 |
|
|
Other long-term
obligations |
|
4,546 |
|
|
|
4,148 |
|
|
Total
Liabilities |
|
442,815 |
|
|
|
312,625 |
|
|
|
|
|
|
|
Stockholders'
Equity |
|
|
|
|
Common
stock |
|
204,601 |
|
|
|
197,826 |
|
|
Retained
earnings |
|
286,378 |
|
|
|
273,764 |
|
|
Accumulated
other comprehensive loss |
|
(5,039 |
) |
|
|
(5,487 |
) |
|
Total
stockholders' equity |
|
485,940 |
|
|
|
466,103 |
|
|
Total Liabilities and
Stockholders' Equity |
$ |
928,755 |
|
|
$ |
778,728 |
|
|
|
INCOME
STATEMENT |
|
|
|
|
|
|
|
(Unaudited, in thousands except per share
amounts) |
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
September
30, |
|
September 30, |
|
|
2016 |
|
|
|
2015 |
|
|
|
2016 |
|
|
|
2015 |
|
|
|
|
|
|
|
|
|
SALES |
$ |
156,975 |
|
|
$ |
136,086 |
|
|
$ |
446,123 |
|
|
$ |
403,745 |
|
|
|
|
|
|
|
|
|
COST OF SALES |
|
89,160 |
|
|
|
76,881 |
|
|
|
251,354 |
|
|
|
228,271 |
|
|
|
|
|
|
|
|
|
GROSS PROFIT |
|
67,815 |
|
|
|
59,205 |
|
|
|
194,769 |
|
|
|
175,474 |
|
|
|
|
|
|
|
|
|
OPERATING EXPENSES |
|
|
|
|
|
|
|
Selling, general
and administrative |
|
53,198 |
|
|
|
39,201 |
|
|
|
138,556 |
|
|
|
115,407 |
|
Research and
development |
|
11,424 |
|
|
|
10,515 |
|
|
|
33,440 |
|
|
|
29,389 |
|
Contingent
consideration expense (benefit) |
|
(94 |
) |
|
|
(58 |
) |
|
|
99 |
|
|
|
185 |
|
Acquired
in-process research and development |
|
300 |
|
|
|
1,000 |
|
|
|
400 |
|
|
|
1,000 |
|
Total |
|
64,828 |
|
|
|
50,658 |
|
|
|
172,495 |
|
|
|
145,981 |
|
|
|
|
|
|
|
|
|
INCOME FROM
OPERATIONS |
|
2,987 |
|
|
|
8,547 |
|
|
|
22,274 |
|
|
|
29,493 |
|
|
|
|
|
|
|
|
|
OTHER INCOME
(EXPENSE) |
|
|
|
|
|
|
|
Interest
income |
|
29 |
|
|
|
78 |
|
|
|
55 |
|
|
|
210 |
|
Interest
(expense) |
|
(3,022 |
) |
|
|
(1,489 |
) |
|
|
(6,120 |
) |
|
|
(4,776 |
) |
Other income
(expense) |
|
1 |
|
|
|
(476 |
) |
|
|
(445 |
) |
|
|
(281 |
) |
Total
other (expense) - net |
|
(2,992 |
) |
|
|
(1,887 |
) |
|
|
(6,510 |
) |
|
|
(4,847 |
) |
|
|
|
|
|
|
|
|
INCOME BEFORE INCOME
TAXES |
|
(5 |
) |
|
|
6,660 |
|
|
|
15,764 |
|
|
|
24,646 |
|
|
|
|
|
|
|
|
|
INCOME TAX EXPENSE
(BENEFIT) |
|
(978 |
) |
|
|
1,842 |
|
|
|
3,149 |
|
|
|
7,253 |
|
|
|
|
|
|
|
|
|
NET INCOME |
$ |
973 |
|
|
$ |
4,818 |
|
|
$ |
12,615 |
|
|
$ |
17,393 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EARNINGS PER COMMON
SHARE- |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
0.02 |
|
|
$ |
0.11 |
|
|
$ |
0.28 |
|
|
$ |
0.40 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted |
$ |
0.02 |
|
|
$ |
0.11 |
|
|
$ |
0.28 |
|
|
$ |
0.39 |
|
|
|
|
|
|
|
|
|
AVERAGE COMMON
SHARES- |
|
|
|
|
|
|
|
Basic |
|
44,447 |
|
|
|
44,165 |
|
|
|
44,346 |
|
|
|
43,976 |
|
|
|
|
|
|
|
|
|
Diluted |
|
45,000 |
|
|
|
44,734 |
|
|
|
44,763 |
|
|
|
44,467 |
|
|
|
|
|
|
|
|
|
Although Merit’s financial statements are
prepared in accordance with accounting principles which are
generally accepted in the United States of America (“GAAP”),
Merit’s management believes that certain non-GAAP financial
measures provide investors with useful information regarding the
underlying business trends and performance of Merit’s ongoing
operations and can be useful for period-over-period comparisons of
such operations. The following table sets forth supplemental
financial data and corresponding reconciliations to Merit’s GAAP
financial statements for the three and nine-month periods ended
September 30, 2016 and 2015. Readers should consider these
non-GAAP measures in addition to, not as a substitute for,
financial reporting measures prepared in accordance with GAAP.
These non-GAAP financial measures exclude some, but not all,
items that may affect Merit's net income. Additionally, these
calculations may not be comparable with similarly titled measures
of other companies. The constant currency revenue adjustments
of $1.1 million and $3.6 million for the three and nine-month
periods ended September 30, 2016, respectively, were calculated
using the average foreign exchange rates for the three and
nine-month periods ended September 30, 2015. The non-GAAP income
adjustments referenced in the following table do not reflect
stock-based compensation expense of approximately $503,000 and
approximately $558,000 for the three-month periods ended September
30, 2016 and 2015, respectively, and approximately $1.9 million and
approximately $1.6 million for the nine-month periods ended
September 30, 2016 and 2015, respectively.
MERIT MEDICAL SYSTEMS,
INC. AND SUBSIDIARIES |
|
|
|
|
|
CONSOLIDATED STATEMENTS OF OPERATIONS - NON-GAAP |
|
|
|
|
FOR THE
THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2016 AND 2015
(Unaudited) |
|
|
In thousands, except
per share data |
|
|
|
|
|
|
Three Months Ended |
|
|
September 30, 2016 |
|
|
Pre-Tax |
Tax Impact (a) |
After-Tax |
Per Share Impact |
|
GAAP net
income |
$ |
(5 |
) |
$ |
978 |
|
$ |
973 |
|
$ |
0.02 |
|
|
|
|
|
|
|
|
Non-GAAP
adjustments: |
|
|
|
|
|
Cost of
Sales |
|
|
|
|
|
Amortization of intangibles |
|
4,446 |
|
|
(1,653 |
) |
|
2,793 |
|
|
0.06 |
|
|
Inventory mark-up related to acquisition |
|
1,202 |
|
|
(468 |
) |
|
734 |
|
|
0.02 |
|
|
Severance |
|
56 |
|
|
(22 |
) |
|
34 |
|
|
0.00 |
|
|
Selling, General
& Administrative |
|
|
|
|
|
Severance |
|
7,644 |
|
|
(2,840 |
) |
|
4,804 |
|
|
0.11 |
|
|
Acquisition-related (c) |
|
1,377 |
|
|
(231 |
) |
|
1,146 |
|
|
0.03 |
|
|
Fair value adjustment to contingent consideration (d) |
|
(94 |
) |
|
37 |
|
|
(57 |
) |
|
(0.00 |
) |
|
Acquired in-process research & development |
|
300 |
|
|
(117 |
) |
|
183 |
|
|
0.00 |
|
|
Amortization of intangibles |
|
1,224 |
|
|
(469 |
) |
|
755 |
|
|
0.02 |
|
|
Other
Income |
|
|
|
|
|
Amortization of long-term debt issuance costs |
|
258 |
|
|
(101 |
) |
|
157 |
|
|
0.00 |
|
|
|
|
|
|
|
|
Adjusted net
income |
$ |
16,408 |
|
$ |
(4,886 |
) |
$ |
11,522 |
|
$ |
0.26 |
|
|
|
|
|
|
|
|
Diluted shares |
|
|
|
|
45,000 |
|
|
|
Three Months Ended |
|
|
September 30, 2015 |
|
|
Pre-Tax |
Tax Impact (a) |
After-Tax |
Per Share Impact |
|
GAAP net
income |
$ |
6,660 |
|
$ |
(1,842 |
) |
$ |
4,818 |
|
$ |
0.11 |
|
|
|
|
|
|
|
|
Non-GAAP
adjustments: |
|
|
|
|
|
Cost of
Sales |
|
|
|
|
|
Amortization of intangibles |
|
2,830 |
|
|
(1,039 |
) |
|
1,791 |
|
|
0.04 |
|
|
Selling, General
& Administrative |
|
|
|
|
|
Severance |
|
602 |
|
|
(234 |
) |
|
368 |
|
|
0.01 |
|
|
Acquisition-related (c) |
|
400 |
|
|
(156 |
) |
|
244 |
|
|
0.01 |
|
|
Fair value adjustment to contingent consideration (d) |
|
(58 |
) |
|
23 |
|
|
(35 |
) |
|
(0.00 |
) |
|
Long-term asset impairment charge (b) |
|
85 |
|
|
(32 |
) |
|
53 |
|
|
0.00 |
|
|
Acquired in-process research & development |
|
1,000 |
|
|
- |
|
|
1,000 |
|
|
0.02 |
|
|
Amortization of intangibles |
|
897 |
|
|
(342 |
) |
|
555 |
|
|
0.01 |
|
|
Other
Income |
|
|
|
|
|
Amortization of long-term debt issuance costs |
|
247 |
|
|
(96 |
) |
|
151 |
|
|
0.00 |
|
|
|
|
|
|
|
|
Adjusted net
income |
$ |
12,663 |
|
$ |
(3,718 |
) |
$ |
8,945 |
|
$ |
0.20 |
|
|
|
|
|
|
|
|
Diluted shares |
|
|
|
|
44,734 |
|
|
|
|
|
|
|
|
In thousands, except
per share data |
|
|
|
|
|
|
Nine Months Ended |
|
|
September 30, 2016 |
|
|
Pre-Tax |
Tax Impact (a) |
After-Tax |
Per Share Impact |
|
GAAP net
income |
$ |
15,764 |
|
$ |
(3,149 |
) |
$ |
12,615 |
|
$ |
0.28 |
|
|
|
|
|
|
|
|
Non-GAAP
adjustments: |
|
|
|
|
|
Cost of
Sales |
|
|
|
|
|
Amortization of intangibles |
|
10,688 |
|
|
(3,939 |
) |
|
6,749 |
|
|
0.15 |
|
|
Inventory mark-up related to acquisition |
|
1,409 |
|
|
(548 |
) |
|
861 |
|
|
0.02 |
|
|
Severance |
|
56 |
|
|
(22 |
) |
|
34 |
|
|
0.00 |
|
|
Selling, General
& Administrative |
|
|
|
|
|
Severance |
|
9,422 |
|
|
(3,532 |
) |
|
5,890 |
|
|
0.13 |
|
|
Acquisition-related (c) |
|
3,750 |
|
|
(1,154 |
) |
|
2,596 |
|
|
0.06 |
|
|
Fair value adjustment to contingent consideration (d) |
|
99 |
|
|
(38 |
) |
|
61 |
|
|
0.00 |
|
|
Long-term asset impairment charge (b) |
|
88 |
|
|
(34 |
) |
|
54 |
|
|
0.00 |
|
|
Acquired in-process research & development |
|
400 |
|
|
(156 |
) |
|
244 |
|
|
0.01 |
|
|
Amortization of intangibles |
|
2,869 |
|
|
(1,096 |
) |
|
1,773 |
|
|
0.04 |
|
|
Other
Income |
|
|
|
|
|
Amortization of long-term debt issuance costs |
|
779 |
|
|
(303 |
) |
|
476 |
|
|
0.01 |
|
|
|
|
|
|
|
|
Adjusted net
income |
$ |
45,324 |
|
$ |
(13,971 |
) |
$ |
31,353 |
|
$ |
0.70 |
|
|
|
|
|
|
|
|
Diluted shares |
|
|
|
|
44,763 |
|
|
|
|
|
|
|
|
|
Nine Months Ended |
|
|
September 30, 2015 |
|
|
Pre-Tax |
Tax Impact (a) |
After-Tax |
Per Share Impact |
|
GAAP net
income |
$ |
24,646 |
|
$ |
(7,253 |
) |
$ |
17,393 |
|
$ |
0.39 |
|
|
|
|
|
|
|
|
Non-GAAP
adjustments: |
|
|
|
|
|
Cost of
Sales |
|
|
|
|
|
Amortization of intangibles |
|
8,398 |
|
|
(2,980 |
) |
|
5,418 |
|
|
0.12 |
|
|
Selling, General
& Administrative |
|
|
|
|
|
Severance |
|
1,717 |
|
|
(609 |
) |
|
1,108 |
|
|
0.02 |
|
|
Acquisition-related (c) |
|
464 |
|
|
(165 |
) |
|
299 |
|
|
0.01 |
|
|
Fair value adjustment to contingent consideration (d) |
|
185 |
|
|
(66 |
) |
|
119 |
|
|
0.00 |
|
|
Long-term asset impairment charge (b) |
|
99 |
|
|
(35 |
) |
|
64 |
|
|
0.00 |
|
|
Acquired in-process research & development |
|
1,000 |
|
|
(355 |
) |
|
645 |
|
|
0.01 |
|
|
Amortization of intangibles |
|
2,653 |
|
|
(941 |
) |
|
1,712 |
|
|
0.04 |
|
|
Termination fee (e) |
|
800 |
|
|
(284 |
) |
|
516 |
|
|
0.01 |
|
|
Other
Income |
|
|
|
|
|
Amortization of long-term debt issuance costs |
|
741 |
|
|
(263 |
) |
|
478 |
|
|
0.01 |
|
|
|
|
|
|
|
|
Adjusted net
income |
$ |
40,703 |
|
$ |
(12,950 |
) |
$ |
27,753 |
|
$ |
0.62 |
|
|
|
|
|
|
|
|
Diluted shares |
|
|
|
|
44,467 |
|
|
|
|
|
|
|
|
(a)
Reflects the tax effect of the non-GAAP adjustments |
|
(b)
Represents abandoned patents |
|
(c) Represents non-recurring costs related to
acquisitions |
|
(d)
Represents changes in the fair value of contingent consideration
liabilities and contingent receivables as a result of
acquisitions |
|
(e) Costs
associated with the termination of our agreement with a third-party
contract manufacturer in Tijuana, Mexico |
|
|
|
ABOUT MERITFounded in 1987, Merit Medical
Systems, Inc. is engaged in the development, manufacture and
distribution of proprietary disposable medical devices used in
interventional, diagnostic and therapeutic procedures, particularly
in cardiology, radiology and endoscopy. Merit serves client
hospitals worldwide with a domestic and international sales force
totaling approximately 200 individuals. Merit employs
approximately 4,100 people worldwide with facilities in South
Jordan, Utah; Pearland, Texas; Richmond, Virginia; Malvern,
Pennsylvania; Rockland, Massachusetts; San Jose, California;
Maastricht and Venlo, The Netherlands; Paris, France; Galway,
Ireland; Beijing, China; Tijuana, Mexico; Joinville, Brazil;
Markham, Ontario, Canada, and Melbourne, Australia.
Statements contained in this release which are
not purely historical, including, without limitation, statements
regarding Merit's forecasted plans, revenues, net income, financial
results or anticipated or completed acquisitions, are
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995 and are subject to risks
and uncertainties such as those described in Merit's Annual Report
on Form 10-K for the year ended December 31, 2015. Such risks
and uncertainties include risks relating to Merit's potential
inability to successfully manage growth through acquisitions,
including the inability to commercialize technology acquired
through completed, proposed or future transactions (including the
recently completed acquisition of DFINE); product recalls and
product liability claims; expenditures relating to research,
development, testing and regulatory approval or clearance of
Merit's products and risks that such products may not be developed
successfully or approved for commercial use; governmental scrutiny
and regulation of the medical device industry, including
governmental inquiries, investigations and proceedings involving
Merit; reforms to the 510(k) process administered by the U.S. Food
and Drug Administration; restrictions on Merit's liquidity or
business operations resulting from its current debt agreements;
infringement of Merit's technology or the assertion that Merit's
technology infringes the rights of other parties; the potential of
fines, penalties or other adverse consequences if Merit's employees
or agents violate the U.S. Foreign Corrupt Practices Act or other
laws or regulations; laws and regulations targeting fraud and abuse
in the healthcare industry; potential for significant adverse
changes in governing regulations; changes in tax laws and
regulations in the United States or other countries; increases in
the prices of commodity components; negative changes in economic
and industry conditions in the United States or other countries;
termination or interruption of relationships with Merit's
suppliers, or failure of such suppliers to perform; fluctuations in
exchange rates; concentration of a substantial portion of
Merit's revenues among a few products and procedures; development
of new products and technology that could render Merit's existing
products obsolete; market acceptance of new products; volatility in
the market price of Merit's common stock; modification or
limitation of governmental or private insurance reimbursement
policies; changes in healthcare policies or markets related to
healthcare reform initiatives; failure to comply with applicable
environmental laws; changes in key personnel; work stoppage or
transportation risks; introduction of products in a timely
fashion; price and product competition; availability of labor and
materials; fluctuations in and obsolescence of inventory; and other
factors referred to in Merit's Annual Report on Form 10-K for the
year ended December 31, 2015 and other materials filed with the
Securities and Exchange Commission. All subsequent forward-looking
statements attributable to Merit or persons acting on its behalf
are expressly qualified in their entirety by these cautionary
statements. Actual results will likely differ, and may differ
materially, from anticipated results. Financial estimates are
subject to change and are not intended to be relied upon as
predictions of future operating results, and Merit assumes no
obligation to update or disclose revisions to those estimates.
Contact: Anne-Marie Wright, Vice President, Corporate Communications
Phone: (801) 208-4167 e-mail: awright@merit.com Fax: (801) 253-1688
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