- Q4 worldwide revenue of $157.7 million ($159.0 million on a
comparable, constant currency* basis), up 14.0% as reported (up
14.9% on a comparable, constant currency* basis) over Q4 2015
- FY16 worldwide revenue of $603.8 million ($608.8 million on a
comparable, constant currency* basis), up 11.4% as reported (up
12.3% on a comparable, constant currency* basis)
- Q4 core revenue* up 7.9% over Q4 2015; FY16 core revenue* up
7.6% over FY15
- Q4 GAAP EPS was $0.17; Q4 non-GAAP EPS* was $0.31
- FY16 GAAP EPS was $0.45; FY16 non-GAAP EPS* was $1.01
- Q4 2016 GAAP gross margin was 44.5%, compared to 43.6% in Q4
2015; Q4 2016 non-GAAP gross margin* was 48.4%, compared to 45.6%
for Q4 2015
* Constant currency revenue, core revenue,
non-GAAP EPS, non-GAAP gross margin and non-GAAP net income
(referenced on the following page) are non-GAAP financial measures.
A reconciliation of these and other non-GAAP financial measures
used in this release to their most directly comparable GAAP
financial measure is included under the heading “Non-GAAP Financial
Measures” below.
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
$157.7 million for the quarter ended December 31, 2016, an increase
of 14.0% over sales of $138.4 million for the quarter ended
December 31, 2015. On a constant currency basis, sales for
the fourth quarter of 2016 would have been up 14.9% over sales for
the comparable quarter of 2015. For the year ended December 31,
2016, Merit’s sales were $603.8 million, an increase of 11.4% over
sales of $542.1 million, for the year ended December 31,
2015. On a constant currency basis, sales for the year ended
December 31, 2016 would have been up 12.3% over sales for 2015.
Merit’s GAAP net income for the fourth quarter
of 2016 was $7.5 million, or $0.17 per share, compared to $6.4
million, or $0.14 per share, for the fourth quarter of 2015, up
primarily due to decreases in SG&A and R&D expenses as a
percentage of sales, partially offset by increased interest expense
due to higher debt balances, primarily as a result of Merit’s
acquisition of DFINE, Inc. in July 2016. Merit’s non-GAAP net
income* for the quarter ended December 31, 2016 was $13.8 million,
or $0.31 per share, up 28.2% compared to $10.8 million, or $0.24
per share, for the quarter ended December 31, 2015.
Merit’s GAAP net income for the year ended
December 31, 2016 was $20.1 million, or $0.45 per share, compared
to $23.8 million, or $0.53 per share, for the year ended December
31, 2015, down primarily as a result of restructuring costs related
to the acquisition of DFINE, Inc. in July 2016. Merit’s
non-GAAP net income* for the year ended December 31, 2016 was $45.1
million, or $1.01 per share, up 17.1% compared to $38.5 million, or
$0.87 per share, for 2015.
Merit’s sales by category for the three and
twelve months ended December 31, 2016, compared to the
corresponding periods in 2015, were as follows:
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
Twelve Months Ended |
|
|
|
December 31, |
|
|
|
December 31, |
|
% Change |
|
|
2016 |
|
|
2015 |
|
% Change |
|
|
2016 |
|
|
2015 |
Cardiovascular |
|
|
|
|
|
|
|
|
|
|
|
Stand-alone
devices |
28.8 |
% |
|
$ |
51,902 |
|
$ |
40,289 |
|
24.5 |
% |
|
$ |
193,517 |
|
$ |
155,414 |
Custom kits and
procedure trays |
5.5 |
% |
|
|
30,219 |
|
|
28,631 |
|
2.6 |
% |
|
|
119,392 |
|
|
116,368 |
Inflation devices |
5.8 |
% |
|
|
19,145 |
|
|
18,088 |
|
0.7 |
% |
|
|
73,919 |
|
|
73,373 |
Catheters |
16.3 |
% |
|
|
28,659 |
|
|
24,650 |
|
14.6 |
% |
|
|
110,939 |
|
|
96,833 |
Embolization
devices |
3.4 |
% |
|
|
12,098 |
|
|
11,702 |
|
2.2 |
% |
|
|
46,035 |
|
|
45,025 |
CRM/EP |
5.6 |
% |
|
|
9,558 |
|
|
9,048 |
|
7.5 |
% |
|
|
36,446 |
|
|
33,902 |
Total |
14.5 |
% |
|
|
151,581 |
|
|
132,408 |
|
11.4 |
% |
|
|
580,248 |
|
|
520,915 |
|
|
|
|
|
|
|
|
|
|
|
|
Endoscopy |
|
|
|
|
|
|
|
|
|
|
|
Endoscopy devices |
2.3 |
% |
|
|
6,134 |
|
|
5,996 |
|
11.1 |
% |
|
|
23,590 |
|
|
21,234 |
|
|
|
|
|
|
|
|
|
|
|
|
Total |
14.0 |
% |
|
$ |
157,715 |
|
$ |
138,404 |
|
11.4 |
% |
|
$ |
603,838 |
|
$ |
542,149 |
|
|
|
|
|
|
|
|
|
|
|
|
“We are pleased to complete year two of our three-year plan,”
said Fred P. Lampropoulos, Merit’s Chairman and Chief Executive
Officer. “With the introduction of a number of new products
in the beginning of 2017, we look forward to continued growth
accompanied by continued expansion of gross margins and
profits.”
“We believe the recently announced acquisitions
of an Argon Medical Devices business unit and Catheter Connections
serve both tactical and strategic objectives,” Lampropoulos said.
“We believe the Argon transaction will enable us to
participate in tenders which previously were not available due to
vacancies in our product line, especially reusable
transducers. Additionally, we recently came to a preliminary
agreement with our longstanding Japanese distributor to transfer
licenses and customers to us. Almost 50% of the Argon
business we acquired is sold in Japan and other parts of
Asia. We intend to combine the acquired Argon business and
the Merit-branded products into one business. When completed,
we believe the new combined business unit will substantially
improve our growth prospects in Japan.”
“We believe the Catheter Connections products
complement the Argon products and provide a substantial value
proposition to both domestic hospitals as well as international
opportunities,” Lampropoulos continued. “We expect that this
product line, which has had substantial distribution gaps globally,
will enhance company growth and profits as we integrate the
injection molding and a portion of manufacturing. We have
already initiated new product development in both of the acquired
businesses.”
2017 GUIDANCEBased upon information currently
available to Merit's management, Merit estimates that for the year
ending December 31, 2017, absent material acquisitions or
non-recurring transactions, Merit's revenues will be in the range
of $713-$723 million, an increase of approximately 18-20%, compared
to revenues of $603.8 million for the year ended December 31,
2016. Also, based on information currently available to
Merit's management, Merit estimates that, absent material
acquisitions or non-recurring transactions, Merit's GAAP earnings
per share for 2017 will be in the range of $0.54-$0.60 and
non-GAAP* earnings per share will be in the range of $1.15-$1.20.
Merit’s financial guidance for the year ending December 31,
2017 is subject to risks and uncertainties, including, but not
limited to, potential accounting adjustments attributable to
Merit’s ongoing valuation of intangibles and other financial assets
acquired from Argon Medical Devices, Inc. and Catheter Connections,
Inc., as well as risks and uncertainties identified in Merit’s
public filings.
CONFERENCE CALLMerit will hold its investor
conference call (conference ID 62632957) today, Tuesday, February
21, 2017, 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) |
|
|
|
|
December 31, |
|
December 31, |
|
|
2016 |
|
|
|
2015 |
|
|
(Unaudited) |
|
|
ASSETS |
|
|
|
Current Assets |
|
|
|
Cash and cash
equivalents |
$ |
19,171 |
|
|
$ |
4,177 |
|
Trade
receivables, net |
|
80,521 |
|
|
|
70,292 |
|
Employee
receivables |
|
198 |
|
|
|
217 |
|
Other
receivables |
|
5,445 |
|
|
|
6,799 |
|
Inventories |
|
120,695 |
|
|
|
105,999 |
|
Prepaid expenses
and other assets |
|
6,226 |
|
|
|
5,634 |
|
Prepaid income
taxes |
|
2,525 |
|
|
|
2,955 |
|
Deferred income
tax assets |
|
8,219 |
|
|
|
7,025 |
|
Income tax
refunds receivable |
|
423 |
|
|
|
905 |
|
Total
Current Assets |
|
243,423 |
|
|
|
204,003 |
|
|
|
|
|
Property and
equipment, net |
|
276,573 |
|
|
|
267,778 |
|
Intangibles,
net |
|
181,697 |
|
|
|
109,354 |
|
Goodwill |
|
211,927 |
|
|
|
184,472 |
|
Deferred income
tax assets |
|
171 |
|
|
|
Other assets |
|
29,012 |
|
|
|
13,121 |
|
Total Assets |
$ |
942,803 |
|
|
$ |
778,728 |
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY |
|
|
|
Current
Liabilities |
|
|
|
Trade
payables |
|
30,619 |
|
|
|
37,977 |
|
Accrued
expenses |
|
44,947 |
|
|
|
37,846 |
|
Current portion
of long-term debt |
|
10,000 |
|
|
|
10,000 |
|
Advances from
employees |
|
572 |
|
|
|
589 |
|
Income taxes
payable |
|
2,193 |
|
|
|
1,498 |
|
Total
Current Liabilities |
|
88,331 |
|
|
|
87,910 |
|
|
|
|
|
Deferred income tax
liabilities |
|
25,981 |
|
|
|
10,985 |
|
Liabilities related to
unrecognized tax benefits |
|
438 |
|
|
|
768 |
|
Deferred compensation
payable |
|
9,211 |
|
|
|
8,500 |
|
Deferred credits |
|
2,550 |
|
|
|
2,721 |
|
Long-term debt |
|
314,373 |
|
|
|
197,593 |
|
Other long-term
obligations |
|
3,730 |
|
|
|
4,148 |
|
Total
Liabilities |
|
444,614 |
|
|
|
312,625 |
|
|
|
|
|
Stockholders'
Equity |
|
|
|
Common
stock |
|
206,186 |
|
|
|
197,826 |
|
Retained
earnings |
|
293,885 |
|
|
|
273,764 |
|
Accumulated
other comprehensive loss |
|
(1,882 |
) |
|
|
(5,487 |
) |
Total
stockholders' equity |
|
498,189 |
|
|
|
466,103 |
|
Total Liabilities and
Stockholders' Equity |
$ |
942,803 |
|
|
$ |
778,728 |
|
|
|
|
|
INCOME
STATEMENT |
|
|
|
|
|
|
|
(Unaudited, in
thousands except per share amounts) |
|
|
|
|
|
|
|
|
Three Months Ended |
|
Year Ended |
|
December 31, |
|
December 31, |
|
|
2016 |
|
|
|
2015 |
|
|
|
2016 |
|
|
|
2015 |
|
|
|
|
|
|
|
|
|
SALES |
$ |
157,715 |
|
|
$ |
138,404 |
|
|
$ |
603,838 |
|
|
$ |
542,149 |
|
|
|
|
|
|
|
|
|
COST OF SALES |
|
87,460 |
|
|
|
78,097 |
|
|
|
338,813 |
|
|
|
306,368 |
|
|
|
|
|
|
|
|
|
GROSS PROFIT |
|
70,255 |
|
|
|
60,307 |
|
|
|
265,025 |
|
|
|
235,781 |
|
|
|
|
|
|
|
|
|
OPERATING EXPENSES |
|
|
|
|
|
|
|
Selling, general
and administrative |
|
45,839 |
|
|
|
40,941 |
|
|
|
184,398 |
|
|
|
156,348 |
|
Research and
development |
|
11,792 |
|
|
|
11,421 |
|
|
|
45,229 |
|
|
|
40,810 |
|
Contingent
consideration expense (benefit) |
|
(38 |
) |
|
|
(105 |
) |
|
|
61 |
|
|
|
80 |
|
Acquired
in-process research and development |
|
61 |
|
|
|
- |
|
|
|
461 |
|
|
|
1,000 |
|
Total |
|
57,654 |
|
|
|
52,257 |
|
|
|
230,149 |
|
|
|
198,238 |
|
|
|
|
|
|
|
|
|
INCOME FROM
OPERATIONS |
|
12,601 |
|
|
|
8,050 |
|
|
|
34,876 |
|
|
|
37,543 |
|
|
|
|
|
|
|
|
|
OTHER INCOME
(EXPENSE) |
|
|
|
|
|
|
|
Interest
income |
|
26 |
|
|
|
62 |
|
|
|
81 |
|
|
|
272 |
|
Interest
(expense) |
|
(2,678 |
) |
|
|
(1,453 |
) |
|
|
(8,798 |
) |
|
|
(6,229 |
) |
Other income
(expense) |
|
(327 |
) |
|
|
(105 |
) |
|
|
(773 |
) |
|
|
(386 |
) |
Total
other (expense) - net |
|
(2,979 |
) |
|
|
(1,496 |
) |
|
|
(9,490 |
) |
|
|
(6,343 |
) |
|
|
|
|
|
|
|
|
INCOME BEFORE INCOME
TAXES |
|
9,622 |
|
|
|
6,554 |
|
|
|
25,386 |
|
|
|
31,200 |
|
|
|
|
|
|
|
|
|
INCOME TAX EXPENSE |
|
2,116 |
|
|
|
145 |
|
|
|
5,265 |
|
|
|
7,398 |
|
|
|
|
|
|
|
|
|
NET INCOME |
$ |
7,506 |
|
|
$ |
6,409 |
|
|
$ |
20,121 |
|
|
$ |
23,802 |
|
|
|
|
|
|
|
|
|
EARNINGS PER COMMON
SHARE- |
|
|
|
|
|
|
|
Basic |
$ |
0.17 |
|
|
$ |
0.14 |
|
|
$ |
0.45 |
|
|
$ |
0.54 |
|
|
|
|
|
|
|
|
|
Diluted |
$ |
0.17 |
|
|
$ |
0.14 |
|
|
$ |
0.45 |
|
|
$ |
0.53 |
|
|
|
|
|
|
|
|
|
AVERAGE COMMON
SHARES- |
|
|
|
|
|
|
|
Basic |
|
44,601 |
|
|
|
44,216 |
|
|
|
44,408 |
|
|
|
44,036 |
|
|
|
|
|
|
|
|
|
Diluted |
|
45,165 |
|
|
|
44,642 |
|
|
|
44,862 |
|
|
|
44,511 |
|
|
|
|
|
|
|
|
|
NON-GAAP FINANCIAL MEASURES
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 referred to in this release 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. Non-GAAP
financial measures used in this release include:
- constant currency revenue;
- core revenue;
- non-GAAP net income;
- non-GAAP earnings per share; and
- non-GAAP gross margin.
Merit’s management team uses these non-GAAP
financial measures to evaluate Merit’s profitability and
efficiency, to compare operating results to prior periods, to
evaluate changes in the operating results of each segment, and to
measure and allocate financial resources internally. However,
Merit’s management does not consider such non-GAAP measures in
isolation or as an alternative to such measures determined in
accordance with GAAP.
Readers should consider non-GAAP measures used
in this release 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. In addition, they are subject to
inherent limitations as they reflect the exercise of judgment by
management about which items are excluded. Merit believes it is
useful to exclude such expenses in the calculation of non-GAAP net
income, non-GAAP gross margin and non-GAAP earnings per share (in
each case, as further illustrated in the reconciliation table
below) because such amounts in any specific period may not directly
correlate to the underlying performance of Merit’s business
operations and can vary significantly between periods as a result
of factors such as new acquisitions, non-cash expense related to
amortization of previously acquired tangible and intangible assets,
unusual compensation expenses or expense resulting from litigation
or governmental proceedings. Merit may incur similar types of
expenses in the future, and the non-GAAP financial information
included in this release should not be viewed as a statement or
indication that these types of expenses will not recur.
Additionally, the non-GAAP financial measures used in this release
may not be comparable with similarly titled measures of other
companies. Merit urges investors and potential investors to
review the reconciliations of its non-GAAP financial measures to
the comparable GAAP financial measures, and not to rely on any
single financial measure to evaluate Merit’s business or results of
operations.
Constant Currency ReconciliationMerit’s revenue
on a constant currency basis is prepared by translating the
current-period reported sales of subsidiaries whose functional
currency is other than the U.S. dollar at the applicable foreign
exchange rates in effect during the comparable prior-year period.
The constant currency revenue adjustments of $1.3 million and
$4.9 million for the three and twelve-month periods ended December
31, 2016, respectively, were calculated using the applicable
average foreign exchange rates for the three and twelve-month
periods ended December 31, 2015.
Core RevenueMerit’s core revenue is defined as
reported revenue excluding revenues from the acquisitions of the
HeRO® Graft and DFINE, Inc. in 2016.
Other Non-GAAP Financial Measure
ReconciliationThe following table sets forth supplemental financial
data and corresponding reconciliations of non-GAAP net income and
non-GAAP earnings per share to Merit’s net income and earnings per
share prepared in accordance with GAAP, in each case, for the three
and twelve-month periods ended December 31, 2016 and 2015.
Non-GAAP gross margin is calculated by reducing GAAP cost of
sales by amounts recorded for amortization of intangible assets,
inventory mark-up and severance expense related to acquisitions.
The non-GAAP income adjustments referenced in the following
table do not reflect stock-based compensation expense of
approximately $593,000 and $600,000 for the three-month periods
ended December 31, 2016 and 2015, respectively, and approximately
$2.5 million and $2.2 million for the twelve-month periods ended
December 31, 2016 and 2015, respectively.
|
|
|
|
|
CONSOLIDATED STATEMENTS
OF OPERATIONS - NON-GAAP |
|
|
|
|
FOR THE
THREE AND TWELVE MONTHS ENDED December 31, 2016 AND 2015
(Unaudited) |
|
|
|
In thousands, except
per share data |
|
|
|
|
|
Three Months Ended |
|
December 31, 2016 |
|
Pre-Tax |
Tax Impact (a) |
After-Tax |
Per Share Impact |
GAAP net
income |
$ |
9,622 |
|
$ |
(2,116 |
) |
$ |
7,506 |
|
$ |
0.17 |
|
|
|
|
|
|
Non-GAAP
adjustments: |
|
|
|
|
Cost of
Sales |
|
|
|
|
Amortization of intangibles |
|
4,434 |
|
|
(1,653 |
) |
|
2,781 |
|
|
0.06 |
|
Inventory mark-up related to acquisition |
|
1,581 |
|
|
(615 |
) |
|
966 |
|
|
0.02 |
|
Selling, General
& Administrative |
|
|
|
|
- |
|
Severance |
|
848 |
|
|
(330 |
) |
|
518 |
|
|
0.01 |
|
Acquisition-related (c) |
|
1,673 |
|
|
(624 |
) |
|
1,049 |
|
|
0.02 |
|
Fair value adjustment to contingent consideration (d) |
|
(38 |
) |
|
15 |
|
|
(23 |
) |
|
(0.00 |
) |
Long-term asset impairment charge (b) |
|
13 |
|
|
(5 |
) |
|
8 |
|
|
0.00 |
|
Acquired in-process research & development |
|
61 |
|
|
(24 |
) |
|
37 |
|
|
0.00 |
|
Amortization of intangibles |
|
1,298 |
|
|
(499 |
) |
|
799 |
|
|
0.02 |
|
Special legal expense (f) |
|
96 |
|
|
(37 |
) |
|
59 |
|
|
0.00 |
|
Other
Income |
|
|
|
|
- |
|
Amortization of long-term debt issuance costs |
|
172 |
|
|
(67 |
) |
|
105 |
|
|
0.00 |
|
|
|
|
|
|
Adjusted net
income |
$ |
19,760 |
|
$ |
(5,955 |
) |
$ |
13,805 |
|
$ |
0.31 |
|
|
|
|
|
|
Diluted shares |
|
|
|
|
45,165 |
|
|
|
|
|
|
|
Three Months Ended |
|
December 31, 2015 |
|
Pre-Tax |
Tax Impact (a) |
After-Tax |
Per Share Impact |
GAAP net
income |
$ |
6,554 |
|
$ |
(145 |
) |
$ |
6,409 |
|
$ |
0.14 |
|
|
|
|
|
|
Non-GAAP
adjustments: |
|
|
|
|
Cost of
Sales |
|
|
|
|
Amortization of intangibles |
|
2,857 |
|
|
(1,041 |
) |
|
1,816 |
|
|
0.04 |
|
Selling, General
& Administrative |
|
|
|
|
Severance |
|
1,217 |
|
|
(473 |
) |
|
744 |
|
|
0.02 |
|
Acquisition-related (c) |
|
1,841 |
|
|
(716 |
) |
|
1,125 |
|
|
0.03 |
|
Fair value adjustment to contingent consideration (d) |
|
(105 |
) |
|
41 |
|
|
(64 |
) |
|
(0.00 |
) |
Long-term asset impairment charge (b) |
|
42 |
|
|
(16 |
) |
|
26 |
|
|
0.00 |
|
Acquired in-process research & development |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
Amortization of intangibles |
|
910 |
|
|
(347 |
) |
|
563 |
|
|
0.01 |
|
Other
Income |
|
|
|
|
Amortization of long-term debt issuance costs |
|
246 |
|
|
(96 |
) |
|
150 |
|
|
0.00 |
|
|
|
|
|
|
Adjusted net
income |
$ |
13,562 |
|
$ |
(2,794 |
) |
$ |
10,768 |
|
$ |
0.24 |
|
|
|
|
|
|
Diluted shares |
|
|
|
|
44,642 |
|
|
|
|
|
|
(continued) |
|
In thousands, except
per share data |
|
|
|
|
|
Year Ended |
|
December 31, 2016 |
|
Pre-Tax |
Tax Impact (a) |
After-Tax |
Per Share Impact |
GAAP net
income |
$ |
25,386 |
$ |
(5,265 |
) |
$ |
20,121 |
$ |
0.45 |
|
|
|
|
|
Non-GAAP
adjustments: |
|
|
|
|
Cost of
Sales |
|
|
|
|
Amortization of intangibles |
|
15,122 |
|
(5,592 |
) |
|
9,530 |
|
0.21 |
Inventory mark-up related to acquisition |
|
2,990 |
|
(1,163 |
) |
|
1,827 |
|
0.04 |
Severance |
|
56 |
|
(22 |
) |
|
34 |
|
0.00 |
Selling, General
& Administrative |
|
|
|
|
Severance |
|
10,271 |
|
(3,878 |
) |
|
6,393 |
|
0.14 |
Acquisition-related (c) |
|
5,423 |
|
(1,805 |
) |
|
3,618 |
|
0.08 |
Fair value adjustment to contingent consideration (d) |
|
61 |
|
(24 |
) |
|
37 |
|
0.00 |
Long-term asset impairment charge (b) |
|
100 |
|
(38 |
) |
|
62 |
|
0.00 |
Acquired in-process research & development |
|
461 |
|
(179 |
) |
|
282 |
|
0.01 |
Amortization of intangibles |
|
4,167 |
|
(1,595 |
) |
|
2,572 |
|
0.06 |
Special legal expense (f) |
|
96 |
|
(38 |
) |
|
58 |
|
0.00 |
Other
Income |
|
|
|
|
Amortization of long-term debt issuance costs |
|
952 |
|
(370 |
) |
|
582 |
|
0.01 |
|
|
|
|
|
Adjusted net
income |
$ |
65,085 |
$ |
(19,969 |
) |
$ |
45,116 |
$ |
1.01 |
|
|
|
|
|
Diluted shares |
|
|
|
|
44,862 |
|
|
|
|
|
|
Year Ended |
|
December 31, 2015 |
|
Pre-Tax |
Tax Impact (a) |
After-Tax |
Per Share Impact |
GAAP net
income |
$ |
31,200 |
$ |
(7,398 |
) |
$ |
23,802 |
$ |
0.53 |
|
|
|
|
|
Non-GAAP
adjustments: |
|
|
|
|
Cost of
Sales |
|
|
|
|
Amortization of intangibles |
|
11,255 |
|
(3,779 |
) |
|
7,476 |
|
0.17 |
Selling, General
& Administrative |
|
|
|
|
Severance |
|
2,934 |
|
(1,141 |
) |
|
1,793 |
|
0.04 |
Acquisition-related (c) |
|
2,305 |
|
(897 |
) |
|
1,408 |
|
0.03 |
Fair value adjustment to contingent consideration (d) |
|
80 |
|
(31 |
) |
|
49 |
|
0.00 |
Long-term asset impairment charge (b) |
|
141 |
|
(55 |
) |
|
86 |
|
0.00 |
Acquired in-process research & development |
|
1,000 |
|
(389 |
) |
|
611 |
|
0.01 |
Amortization of intangibles |
|
3,563 |
|
(1,359 |
) |
|
2,204 |
|
0.05 |
Termination fee (e) |
|
800 |
|
(311 |
) |
|
489 |
|
0.01 |
Other
Income |
|
|
|
|
Amortization of long-term debt issuance costs |
|
987 |
|
(384 |
) |
|
603 |
|
0.01 |
|
|
|
|
|
Adjusted net
income |
$ |
54,265 |
$ |
(15,744 |
) |
$ |
38,521 |
$ |
0.87 |
|
|
|
|
|
Diluted shares |
|
|
|
|
44,511 |
|
(concluded) |
|
(a) Reflects the tax effect of the non-GAAP adjustments(b)
Represents abandoned patents(c) Represents 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(f) Costs incurred in responding to an inquiry from the U.S.
Department of Justice
|
|
|
|
|
Reconciliation of Reported Revenue to Core Revenue (Non-GAAP) |
|
|
|
|
For the
three and twelve months ended December 31, 2016 |
|
(Unaudited,
in thousands) |
|
|
|
Three months ended |
|
|
Twelve months ended |
|
December 31, |
|
|
December 31, |
|
% Change |
|
2016 |
|
2015 |
|
% Change |
|
2016 |
|
2015 |
Reported
Revenue |
|
$ |
157,715 |
$ |
138,404 |
|
|
$ |
603,838 |
$ |
542,149 |
|
|
|
|
|
|
|
|
LESS Sales from: |
|
|
|
|
|
|
|
HeRO® Graft/DFINE,
Inc.* |
|
|
8,355 |
|
- |
|
|
|
20,579 |
|
- |
|
|
|
|
|
|
|
Core
Revenue |
7.9 |
% |
$ |
149,360 |
$ |
138,404 |
|
7.6 |
% |
$ |
583,259 |
$ |
542,149 |
|
*
Represents the combined sales from the acquisitions of the
HeRO® Graft in February 2016 and DFINE, Inc. in July 2016 |
ABOUT MERIT
Founded 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
4,500 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; Melbourne, Australia; Tokyo, Japan; and Singapore.
FORWARD-LOOKING STATEMENTSStatements 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 and Quarterly Reports on Form 10-Q filed during 2016.
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;
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.
TRADEMARKSUnless noted otherwise, trademarks and
registered trademarks used in this release are the property of
Merit Medical Services, Inc., in the United States and other
jurisdictions.
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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