Merit Medical Systems, Inc. (NASDAQ: MMSI), a leading global
manufacturer and marketer of healthcare technology, today announced
revenue of $324.5 million for the quarter ended
December 31, 2023, an increase of 10.6% compared to the
quarter ended December 31, 2022. Constant currency
revenue, organic, for the fourth quarter of 2023 increased 8.3%
compared to the prior year period.
Merit’s revenue by operating segment and product
category for the three and twelve-month periods ended December 31,
2023 and 2022 was as follows (unaudited; in thousands, except
for percentages):
|
|
Three Months Ended |
|
|
Reported |
|
|
|
|
Constant Currency * |
|
|
December 31, |
|
|
|
|
Impact of foreign |
|
December 31, |
|
|
|
|
|
2023 |
|
2022 |
|
% Change |
|
exchange |
|
2023 |
|
% Change |
Cardiovascular |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Peripheral Intervention |
|
$ |
134,143 |
|
$ |
112,384 |
|
19.4 |
% |
|
$ |
(444 |
) |
|
$ |
133,699 |
|
19.0 |
% |
Cardiac Intervention |
|
|
90,242 |
|
|
85,277 |
|
5.8 |
% |
|
|
(174 |
) |
|
|
90,068 |
|
5.6 |
% |
Custom Procedural Solutions |
|
|
49,624 |
|
|
49,147 |
|
1.0 |
% |
|
|
(67 |
) |
|
|
49,557 |
|
0.8 |
% |
OEM |
|
|
41,216 |
|
|
38,861 |
|
6.1 |
% |
|
|
(130 |
) |
|
|
41,086 |
|
5.7 |
% |
Total |
|
|
315,225 |
|
|
285,669 |
|
10.3 |
% |
|
|
(815 |
) |
|
|
314,410 |
|
10.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Endoscopy |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Endoscopy Devices |
|
|
9,290 |
|
|
7,746 |
|
19.9 |
% |
|
|
5 |
|
|
|
9,295 |
|
20.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
$ |
324,515 |
|
$ |
293,415 |
|
10.6 |
% |
|
$ |
(810 |
) |
|
$ |
323,705 |
|
10.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended |
|
|
Reported |
|
|
|
|
Constant Currency * |
|
|
December 31, |
|
|
|
|
Impact of foreign |
|
December 31, |
|
|
|
|
|
2023 |
|
2022 |
|
% Change |
|
exchange |
|
2023 |
|
% Change |
Cardiovascular |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Peripheral Intervention |
|
$ |
502,220 |
|
$ |
439,810 |
|
14.2 |
% |
|
$ |
2,140 |
|
|
$ |
504,360 |
|
14.7 |
% |
Cardiac Intervention |
|
|
358,451 |
|
|
343,186 |
|
4.4 |
% |
|
|
3,040 |
|
|
|
361,491 |
|
5.3 |
% |
Custom Procedural Solutions |
|
|
195,333 |
|
|
190,194 |
|
2.7 |
% |
|
|
1,478 |
|
|
|
196,811 |
|
3.5 |
% |
OEM |
|
|
164,556 |
|
|
145,034 |
|
13.5 |
% |
|
|
(293 |
) |
|
|
164,263 |
|
13.3 |
% |
Total |
|
|
1,220,560 |
|
|
1,118,224 |
|
9.2 |
% |
|
|
6,365 |
|
|
|
1,226,925 |
|
9.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Endoscopy |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Endoscopy Devices |
|
|
36,806 |
|
|
32,757 |
|
12.4 |
% |
|
|
75 |
|
|
|
36,881 |
|
12.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
$ |
1,257,366 |
|
$ |
1,150,981 |
|
9.2 |
% |
|
$ |
6,440 |
|
|
$ |
1,263,806 |
|
9.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Merit’s GAAP gross margin for the fourth quarter
of 2023 was 46.4%, compared to GAAP gross margin of 45.9% for the
prior year period. Merit’s non-GAAP gross margin* for the fourth
quarter of 2023 was 50.4%, compared to non-GAAP gross margin* of
49.5% for the fourth quarter of 2022.
Merit’s GAAP net income for the fourth quarter
of 2023 was $27.6 million, or $0.47 per share, compared to GAAP net
income of $33.4 million, or $0.58 per share, for the fourth quarter
of 2022. Merit’s non-GAAP net income* for the fourth quarter of
2023 was $47.2 million, or $0.81 per share, compared to non-GAAP
net income* of $46.0 million, or $0.79 per share, for the fourth
quarter of 2022.
“We delivered better-than-expected revenue and
financial results in the fourth quarter,” said Fred P.
Lampropoulos, Merit’s Chairman and Chief Executive Officer. “Our
constant currency, organic, revenue increased 8.3% in Q4 and our
constant currency total revenue increased 10.3%, including the
sales of acquired interventional products from AngioDynamics. We
also delivered year-over-year improvement in profitability with an
18.2% non-GAAP operating margin and generated approximately $55
million of free cash flow in the quarter. Our fourth quarter capped
off an impressive year of operating and financial performance in
2023; we delivered nearly 10% constant currency revenue growth, a
120 basis-point improvement year-over-year in our non-GAAP
operating margin and generated strong free cash flow of more than
$110 million. Importantly, we completed the final year of our
Foundations for Growth Program, delivering or exceeding each of the
financial targets we outlined for the three-year period ending
December 31, 2023. We are proud of the team’s strong execution and
relentless focus on this strategic endeavor. It is because of their
efforts that the FFG Program has resulted in a constant currency,
organic revenue CAGR of 9.4%, a 440 basis-point improvement in our
non-GAAP operating margin and cumulative free cash flow generation
of $300 million.”
Mr. Lampropoulos continued: “We are introducing
2024 financial guidance which reflects confidence in our team’s
ability to deliver continued strong execution, stable constant
currency growth, improving profitability and solid free cash flow
generation. We also intend to build upon the significant progress
we made in our FFG Program. As detailed in a separate press release
this afternoon, we are introducing the “Continued Growth
Initiatives” Program and new multi-year financial targets for the
three-year period ending December 31, 2026. We believe the
successful execution of our 3-year “CGI” Program will result in a
constant currency, organic revenue CAGR of at least 5%, non-GAAP
operating margins of at least 20% and cumulative free cash flow of
more than $400 million.”
As of December 31, 2023, Merit had
cash and cash equivalents of $587.0 million, total debt obligations
of $846.6 million, and available borrowing capacity of
approximately $626 million, compared to cash and cash equivalents
of $58.4 million, total debt obligations of $198.2 million, and
available borrowing capacity of approximately $523 million as of
December 31, 2022.
Fiscal Year 2024 Financial Guidance
Based upon the information currently available
to Merit’s management, for the year ending December 31,
2024, absent material acquisitions, non-recurring transactions or
other factors beyond Merit’s current expectations, Merit
expects the following:
Revenue and Earnings Guidance*
|
|
Prior Year (As Reported) |
Guidance |
|
|
Year Ended |
Year Ending |
% Change |
Financial Measure |
|
December 31, 2023 |
December 31, 2024 |
Y/Y |
|
|
|
|
|
Net
Sales |
|
$1.257 billion |
$1.312 - $1.325 billion |
4% - 5% |
Cardiovascular Segment |
|
$1.221 billion |
$1.272 - $1.285 billion |
4% - 5% |
Endoscopy Segment |
|
$36.8 million |
$39.7 - $40.1 million |
8% - 9% |
|
|
|
|
|
Non-GAAP |
|
|
|
|
Earnings Per Share |
|
$3.01 |
$3.28 - $3.35 |
9% - 11% |
*Percentage figures approximated; dollar figures
may not foot due to rounding
2024 Net Sales Guidance - % Change from Prior
Year (Constant Currency) Reconciliation*
|
|
Updated Guidance |
|
|
Low |
|
High |
2024 Net Sales Guidance - % Change from Prior Year (GAAP) |
|
4.3 |
% |
|
5.4 |
% |
Estimated impact of foreign
currency exchange rate fluctuations |
|
0.5 |
% |
|
0.5 |
% |
2024 Net Sales Guidance - %
Change from Prior Year (Constant Currency) |
|
4.8 |
% |
|
5.9 |
% |
*Percentage figures approximated and may not
foot due to rounding
Merit does not provide guidance for GAAP
reported financial measures (other than revenue) or a
reconciliation of forward-looking non-GAAP financial measures to
the most directly comparable GAAP reported financial measures
(other than revenue) because Merit is unable to predict with
reasonable certainty the financial impact of items such as expenses
related to acquisitions or other extraordinary transactions,
non-cash expenses related to amortization or write-off of
previously acquired tangible and intangible assets, certain
severance expenses, performance-based stock compensation expenses,
corporate transformation expenses, expenses resulting from
non-ordinary course litigation or administrative proceedings and
resulting settlements, governmental proceedings, and changes in
governmental or industry regulations. These items are uncertain,
depend on various factors, and could have a material impact on GAAP
reported results for the guidance period. For the same reasons,
Merit is unable to address the significance of the unavailable
information, which could be material to future results.
Specifically, Merit is not, without unreasonable effort, able to
reliably predict the impact of these items and Merit believes
inclusion of a reconciliation of these forward-looking non-GAAP
measures to their GAAP counterparts could be confusing to investors
or cause undue reliance.
Merit’s financial guidance for the year
ending December 31, 2024 is subject to risks and uncertainties
identified in this release and Merit’s filings with the U.S.
Securities and Exchange Commission (the “SEC”).
CONFERENCE CALL
Merit will hold its investor conference call
today, Wednesday, February 28, 2024, at 5:00 p.m. Eastern
(4:00 p.m. Central, 3:00 p.m. Mountain, and
2:00 p.m. Pacific). To access the conference call,
please pre-register using the following
link. Registrants will
receive confirmation with dial-in details. A live webcast
and slide deck will also be available at merit.com.
CONSOLIDATED BALANCE SHEETS(in
thousands)
|
|
December 31, |
|
December 31, |
|
|
2023 |
|
2022 |
ASSETS |
|
|
(unaudited) |
|
|
|
Current Assets |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
587,036 |
|
|
$ |
58,408 |
|
Trade receivables, net |
|
|
177,885 |
|
|
|
164,677 |
|
Other receivables |
|
|
10,517 |
|
|
|
12,992 |
|
Inventories |
|
|
303,871 |
|
|
|
265,991 |
|
Prepaid expenses and other assets |
|
|
24,286 |
|
|
|
22,324 |
|
Prepaid income taxes |
|
|
4,016 |
|
|
|
3,913 |
|
Income tax refund receivables |
|
|
859 |
|
|
|
779 |
|
Total current assets |
|
|
1,108,470 |
|
|
|
529,084 |
|
|
|
|
|
|
|
|
Property and equipment,
net |
|
|
383,523 |
|
|
|
382,976 |
|
Intangible assets, net |
|
|
325,883 |
|
|
|
275,872 |
|
Goodwill |
|
|
382,240 |
|
|
|
359,821 |
|
Deferred income tax
assets |
|
|
7,288 |
|
|
|
6,599 |
|
Operating lease right-of-use
assets |
|
|
63,047 |
|
|
|
65,262 |
|
Other assets |
|
|
54,793 |
|
|
|
44,352 |
|
Total Assets |
|
$ |
2,325,244 |
|
|
$ |
1,663,966 |
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
Current Liabilities |
|
|
|
|
|
|
Trade payables |
|
$ |
65,944 |
|
|
$ |
68,504 |
|
Accrued expenses |
|
|
120,447 |
|
|
|
123,189 |
|
Current portion of long-term debt |
|
|
— |
|
|
|
11,250 |
|
Current operating lease liabilities |
|
|
12,087 |
|
|
|
11,005 |
|
Income taxes payable |
|
|
5,086 |
|
|
|
6,697 |
|
Total current liabilities |
|
|
203,564 |
|
|
|
220,645 |
|
|
|
|
|
|
|
|
Long-term debt |
|
|
823,013 |
|
|
|
186,759 |
|
Deferred income tax
liabilities |
|
|
5,547 |
|
|
|
18,462 |
|
Long-term income taxes
payable |
|
|
347 |
|
|
|
347 |
|
Liabilities related to
unrecognized tax benefits |
|
|
1,912 |
|
|
|
1,912 |
|
Deferred compensation
payable |
|
|
17,167 |
|
|
|
15,264 |
|
Deferred credits |
|
|
1,605 |
|
|
|
1,708 |
|
Long-term operating lease
liabilities |
|
|
56,259 |
|
|
|
59,736 |
|
Other long-term
obligations |
|
|
13,830 |
|
|
|
14,736 |
|
Total liabilities |
|
|
1,123,244 |
|
|
|
519,569 |
|
|
|
|
|
|
|
|
Stockholders' Equity |
|
|
|
|
|
|
Common stock |
|
|
638,150 |
|
|
|
675,174 |
|
Retained earnings |
|
|
575,184 |
|
|
|
480,773 |
|
Accumulated other comprehensive loss |
|
|
(11,334 |
) |
|
|
(11,550 |
) |
Total stockholders' equity |
|
|
1,202,000 |
|
|
|
1,144,397 |
|
Total Liabilities and
Stockholders' Equity |
|
$ |
2,325,244 |
|
|
$ |
1,663,966 |
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED STATEMENTS OF
INCOME(Unaudited, in thousands except per share
amounts)
|
|
Three Months Ended |
|
Year Ended |
|
|
December 31, |
|
December 31, |
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
Net sales |
|
$ |
324,515 |
|
|
$ |
293,415 |
|
|
$ |
1,257,366 |
|
|
$ |
1,150,981 |
|
Cost of sales |
|
|
173,986 |
|
|
|
158,863 |
|
|
|
673,494 |
|
|
|
631,882 |
|
Gross profit |
|
|
150,529 |
|
|
|
134,552 |
|
|
|
583,872 |
|
|
|
519,099 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative |
|
|
95,751 |
|
|
|
83,243 |
|
|
|
373,676 |
|
|
|
342,525 |
|
Research and development |
|
|
21,639 |
|
|
|
20,436 |
|
|
|
82,728 |
|
|
|
75,510 |
|
Impairment charges |
|
|
— |
|
|
|
547 |
|
|
|
270 |
|
|
|
2,219 |
|
Contingent consideration (benefit) expense |
|
|
(473 |
) |
|
|
(91 |
) |
|
|
1,704 |
|
|
|
4,611 |
|
Acquired in-process research and development |
|
|
— |
|
|
|
— |
|
|
|
1,550 |
|
|
|
6,671 |
|
Total operating expenses |
|
|
116,917 |
|
|
|
104,135 |
|
|
|
459,928 |
|
|
|
431,536 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations |
|
|
33,612 |
|
|
|
30,417 |
|
|
|
123,944 |
|
|
|
87,563 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
|
|
1,923 |
|
|
|
123 |
|
|
|
2,456 |
|
|
|
439 |
|
Interest expense |
|
|
(4,977 |
) |
|
|
(2,158 |
) |
|
|
(15,511 |
) |
|
|
(6,339 |
) |
Other income (expense) — net |
|
|
909 |
|
|
|
1,773 |
|
|
|
1,200 |
|
|
|
966 |
|
Total other expense — net |
|
|
(2,145 |
) |
|
|
(262 |
) |
|
|
(11,855 |
) |
|
|
(4,934 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income
taxes |
|
|
31,467 |
|
|
|
30,155 |
|
|
|
112,089 |
|
|
|
82,629 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax (benefit)
expense |
|
|
3,838 |
|
|
|
(3,246 |
) |
|
|
17,678 |
|
|
|
8,113 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
27,629 |
|
|
$ |
33,401 |
|
|
$ |
94,411 |
|
|
$ |
74,516 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common share |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.48 |
|
|
$ |
0.58 |
|
|
$ |
1.64 |
|
|
$ |
1.31 |
|
Diluted |
|
$ |
0.47 |
|
|
$ |
0.58 |
|
|
$ |
1.62 |
|
|
$ |
1.29 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares
outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
57,793 |
|
|
|
57,098 |
|
|
|
57,593 |
|
|
|
56,806 |
|
Diluted |
|
|
58,385 |
|
|
|
57,963 |
|
|
|
58,356 |
|
|
|
57,671 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED STATEMENTS OF CASH
FLOWS(Unaudited, in thousands)
|
|
Year Ended |
|
|
December 31, |
|
|
2023 |
|
2022 |
CASH FLOWS FROM OPERATING
ACTIVITIES: |
|
|
|
|
Net income |
|
$ |
94,411 |
|
|
$ |
74,516 |
|
Adjustments to reconcile net income to net cash provided by
operating activities: |
|
|
|
|
|
|
Depreciation and amortization |
|
|
89,985 |
|
|
|
81,804 |
|
(Gain) loss on disposition of business |
|
|
(431 |
) |
|
|
1,417 |
|
Write-off of certain intangible assets and other long-term
assets |
|
|
506 |
|
|
|
2,281 |
|
Amortization of right-of-use operating lease assets |
|
|
11,307 |
|
|
|
10,394 |
|
Fair value adjustments related to contingent consideration
liabilities |
|
|
1,704 |
|
|
|
4,611 |
|
Acquired in-process research and development |
|
|
1,550 |
|
|
|
6,671 |
|
Deferred income taxes |
|
|
(12,643 |
) |
|
|
(14,924 |
) |
Stock-based compensation expense |
|
|
21,333 |
|
|
|
18,042 |
|
Other adjustments |
|
|
7,451 |
|
|
|
877 |
|
Changes in operating assets and liabilities, net of acquisitions
and divestitures |
|
|
(70,022 |
) |
|
|
(71,398 |
) |
Total adjustments |
|
|
50,740 |
|
|
|
39,775 |
|
Net cash, cash equivalents,
and restricted cash provided by operating activities |
|
|
145,151 |
|
|
|
114,291 |
|
|
|
|
|
|
|
|
CASH FLOWS FROM INVESTING
ACTIVITIES: |
|
|
|
|
|
|
Capital expenditures for property and equipment |
|
|
(34,290 |
) |
|
|
(45,029 |
) |
Cash paid in acquisitions, net of cash acquired |
|
|
(138,278 |
) |
|
|
(8,287 |
) |
Other investing, net |
|
|
(2,779 |
) |
|
|
(4,081 |
) |
Net cash, cash equivalents,
and restricted cash used in investing activities |
|
|
(175,347 |
) |
|
|
(57,397 |
) |
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING
ACTIVITIES: |
|
|
|
|
Proceeds from issuance of common stock |
|
|
15,584 |
|
|
|
20,070 |
|
Proceeds from (payment of) long-term debt |
|
|
619,579 |
|
|
|
(44,938 |
) |
Purchase of capped call option |
|
|
(66,528 |
) |
|
|
— |
|
Long-term debt issuance costs |
|
|
(677 |
) |
|
|
— |
|
Contingent payments related to acquisitions |
|
|
(3,569 |
) |
|
|
(32,918 |
) |
Payment of taxes related to an exchange of common stock |
|
|
(5,123 |
) |
|
|
(2,474 |
) |
Net cash, cash equivalents,
and restricted cash provided by (used in) financing activities |
|
|
559,266 |
|
|
|
(60,260 |
) |
Effect of exchange rates on
cash |
|
|
(484 |
) |
|
|
(3,826 |
) |
Net increase (decrease) in
cash, cash equivalents and restricted cash |
|
|
528,586 |
|
|
|
(7,192 |
) |
|
|
|
|
|
|
|
CASH, CASH EQUIVALENTS AND
RESTRICTED CASH: |
|
|
|
|
|
|
Beginning of period |
|
|
60,558 |
|
|
|
67,750 |
|
End of period |
|
$ |
589,144 |
|
|
$ |
60,558 |
|
|
|
|
|
|
|
|
RECONCILIATION OF CASH, CASH
EQUIVALENTS AND RESTRICTED CASH TO THE CONSOLIDATED BALANCE
SHEETS: |
|
|
|
|
|
|
Cash and cash equivalents |
|
|
587,036 |
|
|
|
58,408 |
|
Restricted cash reported in prepaid expenses and other current
assets |
|
|
2,108 |
|
|
|
2,150 |
|
Total cash, cash equivalents
and restricted cash |
|
$ |
589,144 |
|
|
$ |
60,558 |
|
|
|
|
|
|
|
|
|
|
Non-GAAP Financial Measures
Although Merit’s financial statements are
prepared in accordance with accounting principles generally
accepted in the United States of America (“GAAP”), Merit’s
management believes that the non-GAAP financial measures referenced
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;
- constant
currency revenue, organic;
- non-GAAP gross
profit and margin;
- non-GAAP
operating income and margin;
- non-GAAP net
income;
- non-GAAP
earnings per share; and
- free cash
flow.
Merit’s management team uses these non-GAAP
financial measures to evaluate Merit’s profitability and
efficiency, to compare operating and financial results to prior
periods, to evaluate changes in the results of its operating
segments, 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 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 generally 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 items in the calculation of non-GAAP gross
profit and margin, non-GAAP operating income and margin, non-GAAP
net income, and non-GAAP earnings per share (in each case, as
further illustrated in the reconciliation tables 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
acquisition or other extraordinary transactions, non-cash expenses
related to amortization or write-off of previously acquired
tangible and intangible assets, certain severance expenses,
expenses resulting from non-ordinary course litigation or
administrative proceedings and resulting settlements, corporate
transformation expenses, governmental proceedings or changes in tax
or industry regulations, gains or losses on disposal of certain
assets, and debt issuance costs. 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 readers to review the reconciliations of its
non-GAAP financial measures to their most directly comparable GAAP
financial measures included herein, and not to rely on any single
financial measure to evaluate Merit’s business or results of
operations.
Constant Currency Revenue
Merit’s constant currency revenue is prepared by
converting the current-period reported revenue of subsidiaries
whose functional currency is a currency other than the U.S. dollar
at the applicable foreign exchange rates in effect during the
comparable prior-year period and adjusting for the effects of
hedging transactions on reported revenue, which are recorded in the
U.S. dollar. The constant currency revenue adjustments of ($0.8)
million and $6.4 million to reported revenue for the three and
twelve-month periods ended December 31, 2023 were calculated using
the applicable average foreign exchange rates for the three and
twelve-month periods ended December 31, 2022.
Constant Currency Revenue, Organic
Merit’s constant currency revenue, organic, is
defined, with respect to prior fiscal year periods, as GAAP
revenue. With respect to current fiscal year periods, constant
currency revenue, organic, is defined as constant currency revenue
(as defined above), less revenue from certain acquisitions. For the
three and twelve-month periods ended December 31, 2023, Merit’s
constant currency revenue, organic, excludes revenues attributable
to certain assets acquired from AngioDynamics, Inc.
(“AngioDynamics”) in June 2023.
Non-GAAP Gross Profit and Margin
Non-GAAP gross profit is calculated by reducing
GAAP cost of sales by amounts recorded for amortization of
intangible assets, corporate restructuring charges, and inventory
mark-up related to acquisitions. Non-GAAP gross margin is
calculated by dividing non-GAAP gross profit by reported net
sales.
Non-GAAP Operating Income and
Margin
Non-GAAP operating income is calculated by
adjusting GAAP operating income for certain items which are deemed
by Merit’s management to be outside of core operations and vary in
amount and frequency among periods, such as expenses related to
acquisitions or other extraordinary transactions, non-cash expenses
related to amortization or write-off of previously acquired
tangible and intangible assets, certain severance expenses,
performance-based stock compensation expenses, corporate
transformation expenses, expenses resulting from non-ordinary
course litigation or administrative proceedings and resulting
settlements, governmental proceedings, and changes in governmental
or industry regulations, as well as other items referenced in the
tables below. Non-GAAP operating margin is calculated by dividing
non-GAAP operating income by reported net sales.
Non-GAAP Net Income
Non-GAAP net income is calculated by adjusting
GAAP net income for the items set forth in the definition of
non-GAAP operating income above, as well as for expenses related to
debt issuance costs, gains or losses on disposal of certain assets,
changes in tax regulations, and other items set forth in the tables
below.
Non-GAAP EPS
Non-GAAP EPS is defined as non-GAAP net income
divided by the diluted shares outstanding for the corresponding
period.
Free Cash Flow
Free cash flow is defined as cash flow from
operations calculated in accordance with GAAP, less capital
expenditures for property and equipment calculated in accordance
with GAAP, as set forth in the consolidated statement of cash
flows.
Non-GAAP Financial Measure Reconciliations
The following tables set forth supplemental
financial data and corresponding reconciliations of non-GAAP
financial measures to Merit’s corresponding financial measures
prepared in accordance with GAAP, in each case, for the three and
twelve-month periods ended December 31, 2023 and 2022. The non-GAAP
income adjustments referenced in the following tables do not
reflect non-performance-based stock compensation expense of
approximately $3.5 million and $3.2 million for the three-month
periods ended December 31, 2023 and 2022, respectively
and $12.7 million and $12.5 million for the twelve-month periods
ended December 31, 2023 and 2022, respectively.
Reconciliation of GAAP Net Income to
Non-GAAP Net Income(Unaudited, in thousands except per
share amounts)
|
|
Three Months Ended |
|
|
December 31, 2023 |
|
|
Pre-Tax |
|
Tax Impact |
|
After-Tax |
|
Per Share Impact |
GAAP net income |
|
$ |
31,467 |
|
|
$ |
(3,838 |
) |
|
$ |
27,629 |
|
|
$ |
0.47 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
Cost of Sales |
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of intangibles |
|
|
12,611 |
|
|
|
(3,032 |
) |
|
|
9,579 |
|
|
|
0.16 |
|
Corporate restructuring (a) |
|
|
448 |
|
|
|
(108 |
) |
|
|
340 |
|
|
|
0.01 |
|
Inventory mark-up related to acquisitions |
|
|
68 |
|
|
|
(17 |
) |
|
|
51 |
|
|
|
0.00 |
|
Operating Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
Contingent consideration benefit |
|
|
(473 |
) |
|
|
74 |
|
|
|
(399 |
) |
|
|
(0.01 |
) |
Amortization of intangibles |
|
|
2,334 |
|
|
|
(562 |
) |
|
|
1,772 |
|
|
|
0.03 |
|
Performance-based share-based compensation (b) |
|
|
2,459 |
|
|
|
(350 |
) |
|
|
2,109 |
|
|
|
0.04 |
|
Corporate transformation and restructuring (c) |
|
|
5,162 |
|
|
|
(1,237 |
) |
|
|
3,925 |
|
|
|
0.07 |
|
Acquisition-related |
|
|
68 |
|
|
|
(16 |
) |
|
|
52 |
|
|
|
0.00 |
|
Medical Device Regulation expenses (d) |
|
|
2,710 |
|
|
|
(651 |
) |
|
|
2,059 |
|
|
|
0.04 |
|
Other (e) |
|
|
41 |
|
|
|
(10 |
) |
|
|
31 |
|
|
|
0.00 |
|
Other (Income) Expense |
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of long-term debt issuance costs |
|
|
585 |
|
|
|
(140 |
) |
|
|
445 |
|
|
|
0.01 |
|
Gain on disposal of business unit |
|
|
(431 |
) |
|
|
— |
|
|
|
(431 |
) |
|
|
(0.01 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net income |
|
$ |
57,049 |
|
|
$ |
(9,887 |
) |
|
$ |
47,162 |
|
|
$ |
0.81 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted shares |
|
|
|
|
|
|
|
|
|
|
|
58,385 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
December 31, 2022 |
|
|
Pre-Tax |
|
Tax Impact |
|
After-Tax |
|
Per Share Impact |
GAAP net income |
|
$ |
30,155 |
|
|
$ |
3,246 |
|
|
$ |
33,401 |
|
|
$ |
0.58 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
Cost of Sales |
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of intangibles |
|
|
10,615 |
|
|
|
(2,602 |
) |
|
|
8,013 |
|
|
|
0.14 |
|
Operating Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
Contingent consideration benefit |
|
|
(91 |
) |
|
|
31 |
|
|
|
(60 |
) |
|
|
(0.00 |
) |
Impairment charges |
|
|
547 |
|
|
|
— |
|
|
|
547 |
|
|
|
0.01 |
|
Amortization of intangibles |
|
|
1,551 |
|
|
|
(382 |
) |
|
|
1,169 |
|
|
|
0.02 |
|
Performance-based share-based compensation (b) |
|
|
1,152 |
|
|
|
(133 |
) |
|
|
1,019 |
|
|
|
0.02 |
|
Corporate transformation and restructuring (c) |
|
|
3,325 |
|
|
|
(814 |
) |
|
|
2,511 |
|
|
|
0.04 |
|
Acquisition-related |
|
|
213 |
|
|
|
(52 |
) |
|
|
161 |
|
|
|
0.00 |
|
Medical Device Regulation expenses (d) |
|
|
4,482 |
|
|
|
(1,097 |
) |
|
|
3,385 |
|
|
|
0.06 |
|
Other (e) |
|
|
121 |
|
|
|
(30 |
) |
|
|
91 |
|
|
|
0.00 |
|
Other (Income) Expense |
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of long-term debt issuance costs |
|
|
151 |
|
|
|
(37 |
) |
|
|
114 |
|
|
|
0.00 |
|
Loss on disposal of business unit |
|
|
17 |
|
|
|
3 |
|
|
|
20 |
|
|
|
0.00 |
|
Tax expense related to restructuring (f) |
|
|
— |
|
|
|
(4,324 |
) |
|
|
(4,324 |
) |
|
|
(0.07 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net income |
|
$ |
52,238 |
|
|
$ |
(6,191 |
) |
|
$ |
46,047 |
|
|
$ |
0.79 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted shares |
|
|
|
|
|
|
|
|
|
|
|
57,963 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note: Certain per
share impacts may not sum to totals due to rounding. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of GAAP Net Income to
Non-GAAP Net Income(Unaudited, in thousands except per
share amounts)
|
|
Year Ended |
|
|
December 31, 2023 |
|
|
Pre-Tax |
|
Tax Impact |
|
After-Tax |
|
Per Share Impact |
GAAP net income |
|
$ |
112,089 |
|
|
$ |
(17,678 |
) |
|
$ |
94,411 |
|
|
$ |
1.62 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
Cost of Sales |
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of intangibles |
|
|
47,795 |
|
|
|
(11,492 |
) |
|
|
36,303 |
|
|
|
0.62 |
|
Corporate restructuring (a) |
|
|
448 |
|
|
|
(108 |
) |
|
|
340 |
|
|
|
0.01 |
|
Inventory mark-up related to acquisitions |
|
|
2,069 |
|
|
|
(497 |
) |
|
|
1,572 |
|
|
|
0.03 |
|
Operating Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
Contingent consideration expense |
|
|
1,704 |
|
|
|
(47 |
) |
|
|
1,657 |
|
|
|
0.03 |
|
Impairment charges |
|
|
270 |
|
|
|
— |
|
|
|
270 |
|
|
|
0.00 |
|
Amortization of intangibles |
|
|
8,293 |
|
|
|
(1,998 |
) |
|
|
6,295 |
|
|
|
0.11 |
|
Performance-based share-based compensation (b) |
|
|
8,526 |
|
|
|
(1,121 |
) |
|
|
7,405 |
|
|
|
0.13 |
|
Corporate transformation and restructuring (c) |
|
|
19,365 |
|
|
|
(4,646 |
) |
|
|
14,719 |
|
|
|
0.25 |
|
Acquisition-related |
|
|
5,286 |
|
|
|
(1,269 |
) |
|
|
4,017 |
|
|
|
0.07 |
|
Medical Device Regulation expenses (d) |
|
|
11,822 |
|
|
|
(2,838 |
) |
|
|
8,984 |
|
|
|
0.15 |
|
Other (e) |
|
|
(1,268 |
) |
|
|
304 |
|
|
|
(964 |
) |
|
|
(0.02 |
) |
Other (Income) Expense |
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of long-term debt issuance costs |
|
|
1,639 |
|
|
|
(393 |
) |
|
|
1,246 |
|
|
|
0.02 |
|
Gain on disposal of business unit |
|
|
(431 |
) |
|
|
— |
|
|
|
(431 |
) |
|
|
(0.01 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net income |
|
$ |
217,607 |
|
|
$ |
(41,783 |
) |
|
$ |
175,824 |
|
|
$ |
3.01 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted shares |
|
|
|
|
|
|
|
|
|
|
|
58,356 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended |
|
|
December 31, 2022 |
|
|
Pre-Tax |
|
Tax Impact |
|
After-Tax |
|
Per Share Impact |
GAAP net income |
|
$ |
82,629 |
|
$ |
(8,113 |
) |
|
$ |
74,516 |
|
|
$ |
1.29 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
Cost of Sales |
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of intangibles |
|
|
42,154 |
|
|
(10,335 |
) |
|
|
31,819 |
|
|
|
0.55 |
|
Operating Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
Contingent consideration expense |
|
|
4,611 |
|
|
14 |
|
|
|
4,625 |
|
|
|
0.08 |
|
Impairment charges |
|
|
2,219 |
|
|
(318 |
) |
|
|
1,901 |
|
|
|
0.03 |
|
Amortization of intangibles |
|
|
6,300 |
|
|
(1,558 |
) |
|
|
4,742 |
|
|
|
0.08 |
|
Performance-based share-based compensation (b) |
|
|
5,506 |
|
|
(546 |
) |
|
|
4,960 |
|
|
|
0.09 |
|
Corporate transformation and restructuring (c) |
|
|
23,757 |
|
|
(5,516 |
) |
|
|
18,241 |
|
|
|
0.32 |
|
Acquisition-related |
|
|
2,114 |
|
|
(517 |
) |
|
|
1,597 |
|
|
|
0.03 |
|
Medical Device Regulation expenses (d) |
|
|
12,933 |
|
|
(3,166 |
) |
|
|
9,767 |
|
|
|
0.17 |
|
Other (e) |
|
|
7,966 |
|
|
(1,893 |
) |
|
|
6,073 |
|
|
|
0.11 |
|
Other (Income) Expense |
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of long-term debt issuance costs |
|
|
604 |
|
|
(148 |
) |
|
|
456 |
|
|
|
0.01 |
|
Loss on disposal of business unit |
|
|
1,407 |
|
|
(29 |
) |
|
|
1,378 |
|
|
|
0.02 |
|
Tax expense related to restructuring (f) |
|
|
— |
|
|
(4,324 |
) |
|
|
(4,324 |
) |
|
|
(0.07 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net income |
|
$ |
192,200 |
|
$ |
(36,449 |
) |
|
$ |
155,751 |
|
|
$ |
2.70 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted shares |
|
|
|
|
|
|
|
|
|
|
|
57,671 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note: Certain per
share impacts may not sum to totals due to rounding. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Reported Operating Income to Non-GAAP
Operating Income(Unaudited, in thousands except
percentages)
|
|
Three Months Ended |
|
Three Months Ended |
|
Year Ended |
|
Year Ended |
|
|
December 31, 2023 |
|
December 31, 2022 |
|
December 31, 2023 |
|
December 31, 2022 |
|
|
Amounts |
|
% Sales |
|
Amounts |
|
% Sales |
|
Amounts |
|
% Sales |
|
Amounts |
|
% Sales |
Net Sales as Reported |
|
$ |
324,515 |
|
|
|
|
$ |
293,415 |
|
|
|
|
$ |
1,257,366 |
|
|
|
|
$ |
1,150,981 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Operating Income |
|
|
33,612 |
|
|
10.4 |
% |
|
|
30,417 |
|
|
10.4 |
% |
|
|
123,944 |
|
|
9.9 |
% |
|
|
87,563 |
|
7.6 |
% |
Cost of Sales |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of intangibles |
|
|
12,611 |
|
|
3.9 |
% |
|
|
10,615 |
|
|
3.6 |
% |
|
|
47,795 |
|
|
3.8 |
% |
|
|
42,154 |
|
3.7 |
% |
Corporate restructuring (a) |
|
|
448 |
|
|
0.1 |
% |
|
|
— |
|
|
— |
|
|
|
448 |
|
|
0.0 |
% |
|
|
— |
|
— |
|
Inventory mark-up related to acquisitions |
|
|
68 |
|
|
0.0 |
% |
|
|
— |
|
|
— |
|
|
|
2,069 |
|
|
0.2 |
% |
|
|
— |
|
— |
|
Operating Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contingent consideration (benefit) expense |
|
|
(473 |
) |
|
(0.1 |
)% |
|
|
(91 |
) |
|
(0.0 |
)% |
|
|
1,704 |
|
|
0.1 |
% |
|
|
4,611 |
|
0.4 |
% |
Impairment charges |
|
|
— |
|
|
— |
|
|
|
547 |
|
|
0.2 |
% |
|
|
270 |
|
|
0.0 |
% |
|
|
2,219 |
|
0.2 |
% |
Amortization of intangibles |
|
|
2,334 |
|
|
0.7 |
% |
|
|
1,551 |
|
|
0.5 |
% |
|
|
8,293 |
|
|
0.7 |
% |
|
|
6,300 |
|
0.5 |
% |
Performance-based share-based compensation (b) |
|
|
2,459 |
|
|
0.8 |
% |
|
|
1,152 |
|
|
0.4 |
% |
|
|
8,526 |
|
|
0.7 |
% |
|
|
5,506 |
|
0.5 |
% |
Corporate transformation and restructuring (c) |
|
|
5,162 |
|
|
1.6 |
% |
|
|
3,325 |
|
|
1.1 |
% |
|
|
19,365 |
|
|
1.5 |
% |
|
|
23,757 |
|
2.1 |
% |
Acquisition-related |
|
|
68 |
|
|
0.0 |
% |
|
|
213 |
|
|
0.1 |
% |
|
|
5,286 |
|
|
0.4 |
% |
|
|
2,114 |
|
0.2 |
% |
Medical Device Regulation expenses (d) |
|
|
2,710 |
|
|
0.8 |
% |
|
|
4,482 |
|
|
1.5 |
% |
|
|
11,822 |
|
|
0.9 |
% |
|
|
12,933 |
|
1.1 |
% |
Other (e) |
|
|
41 |
|
|
0.0 |
% |
|
|
121 |
|
|
0.0 |
% |
|
|
(1,268 |
) |
|
(0.1 |
)% |
|
|
7,966 |
|
0.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Operating Income |
|
$ |
59,040 |
|
|
18.2 |
|
|
$ |
52,332 |
|
|
17.8 |
|
|
$ |
228,254 |
|
|
18.2 |
|
|
$ |
195,123 |
|
17.0 |
% |
|
|
|
|
Note: Certain percentages may not sum to totals due
to rounding. |
|
|
a) |
Represents corporate
restructuring charges reflected within cost of sales including the
write-off of inventory related to the divestiture or exit of
certain businesses or product lines. |
|
|
b) |
Represents
performance-based share-based compensation expense, including
stock-settled and cash-settled awards. |
|
|
c) |
Includes consulting
expenses related to the Foundations for Growth Program, $4.3
million for write-offs of other long-term assets associated with
restructuring activities in the twelve-month period ended December
31, 2023, and other transformation costs, including severance
related to corporate initiatives. |
|
|
d) |
Represents
incremental expenses incurred to comply with the E.U. Medical
Device Regulation (“MDR”). |
|
|
e) |
The 2023 periods
include insurance reimbursement of approximately $(3.0) million for
costs incurred in responding to an inquiry by the U.S. Department
of Justice (the “DOJ”) which was settled in 2020, costs to comply
with Merit’s corporate integrity agreement with the DOJ, and
acquired in-process research and development charges of $1.6
million. The 2022 periods include costs to comply with Merit’s
corporate integrity agreement with the DOJ, acquired in-process
research and development charges of $6.7 million, and legal costs
associated with a shareholder derivative proceeding. |
|
|
f) |
Represents an
adjustment to our deferred withholding tax liability on unremitted
foreign earnings as a result of the restructuring of certain
international subsidiaries in 2022. |
|
|
Reconciliation of Reported Revenue to Constant Currency
Revenue (Non-GAAP), and Constant Currency Revenue, Organic
(Non-GAAP)(Unaudited, in thousands
except percentages)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
Year Ended |
|
|
|
|
December 31, |
|
|
|
December 31, |
|
|
% Change |
|
2023 |
|
|
2022 |
|
% Change |
|
2023 |
|
|
2022 |
Reported Revenue |
|
10.6 |
% |
$ |
324,515 |
|
|
$ |
293,415 |
|
9.2 |
% |
$ |
1,257,366 |
|
|
$ |
1,150,981 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Add: Impact of foreign
exchange |
|
|
|
|
(810 |
) |
|
|
— |
|
|
|
|
6,440 |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Constant Currency Revenue
(a) |
|
10.3 |
% |
$ |
323,705 |
|
|
$ |
293,415 |
|
9.8 |
% |
$ |
1,263,806 |
|
|
$ |
1,150,981 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: Revenue from certain
acquisitions |
|
|
|
|
(6,079 |
) |
|
|
— |
|
|
|
|
(14,365 |
) |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Constant Currency Revenue,
Organic (a) |
|
8.3 |
% |
$ |
317,626 |
|
|
$ |
293,415 |
|
8.6 |
% |
$ |
1,249,441 |
|
|
$ |
1,150,981 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) A non-GAAP
financial measure. For a definition of this and other non-GAAP
financial measures, see the section of this release entitled
“Non-GAAP Financial Measures.” |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Reported Gross Margin to Non-GAAP
Gross Margin (Non-GAAP)(Unaudited, as
a percentage of reported revenue)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Year Ended |
|
|
|
December 31, |
|
|
December 31, |
|
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
Reported Gross Margin |
|
46.4 |
% |
|
45.9 |
% |
|
46.4 |
% |
|
45.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Add back impact of: |
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of intangibles |
|
3.9 |
% |
|
3.6 |
% |
|
3.8 |
% |
|
3.7 |
% |
Corporate restructuring (a) |
|
0.1 |
% |
|
— |
|
|
0.0 |
% |
|
— |
|
Inventory mark-up related to acquisitions |
|
0.0 |
% |
|
— |
|
|
0.2 |
% |
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Gross Margin |
|
50.4 |
% |
|
49.5 |
% |
|
50.4 |
% |
|
48.8 |
% |
|
|
|
|
Note: Certain percentages may not sum to totals due
to rounding. |
|
|
|
|
(a) |
Represents corporate
restructuring charges reflected within cost of sales including the
write-off of inventory related to the divestiture or exit of
certain businesses or product lines. |
|
|
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, oncology, critical care, and endoscopy. Merit serves
client hospitals worldwide with a domestic and international sales
force and clinical support team totaling more than 700 individuals.
Merit employs approximately 7,000 people worldwide.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
Statements contained in this release which are
not purely historical, including, without limitation, statements
regarding Merit’s forecasted plans, revenues, net sales, net income
(GAAP and non-GAAP), operating income and margin (GAAP and
non-GAAP), gross profit and margin (GAAP and non-GAAP), earnings
per share (GAAP and non-GAAP), free cash flow and other financial
measures, future growth and profit expectations or forecasted
economic conditions, or the implementation of, and results which
may be achieved through, Merit’s Foundations for Growth Program,
Continued Growth Initiatives Program or other expense reduction
initiatives, are forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended, 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,
2023 (the “2023 Annual Report”) and other filings with the SEC.
Such risks and uncertainties include inherent risks and
uncertainties associated with Merit’s integration of products
acquired from AngioDynamics and its ability to achieve anticipated
financial results, product development and other anticipated
benefits of the AngioDynamics acquisition; uncertainties as to
whether Merit will achieve sales, gross and operating margins, net
income and earnings per share performance consistent with its
forecasts associated with that acquisition; disruptions in Merit’s
supply chain, manufacturing or sterilization processes; reduced
availability of, and price increases associated with, commodity
components and other raw materials; adverse changes in freight,
shipping and transportation expenses; negative changes in economic
and industry conditions in the United States or other countries,
including inflation; risks relating to Merit’s potential inability
to successfully manage growth through acquisitions generally,
including the inability to effectively integrate acquired
operations or products or commercialize technology developed
internally or acquired through completed, proposed or future
transactions; risks associated with Merit’s ongoing or prospective
manufacturing transfers and facility consolidations; fluctuations
in interest or foreign currency exchange rates; risks and
uncertainties associated with Merit’s information technology
systems, including the potential for breaches of security and
evolving regulations regarding privacy and data protection;
governmental scrutiny and regulation of the medical device
industry, including governmental inquiries, investigations and
proceedings involving Merit; consequences associated with a
Corporate Integrity Agreement executed between Merit and the U.S.
Office of Inspector General; difficulties, delays and expenditures
relating to development, testing and regulatory approval or
clearance of Merit’s products, including the pursuit of approvals
under the MDR, and risks that such products may not be developed
successfully or approved for commercial use; litigation and other
judicial proceedings affecting Merit; 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; restrictions on Merit’s liquidity or business
operations resulting from its debt agreements; infringement of
Merit’s technology or the assertion that Merit’s technology
infringes the rights of other parties; product recalls and product
liability claims; changes in customer purchasing patterns or the
mix of products Merit sells; laws and regulations targeting fraud
and abuse in the healthcare industry; potential for significant
adverse changes in governing regulations, including reforms to the
procedures for approval or clearance of Merit’s products by the
U.S. Food & Drug Administration or comparable regulatory
authorities in other jurisdictions; changes in tax laws and
regulations in the United States or other jurisdictions;
termination of relationships with Merit’s suppliers, or failure of
such suppliers to perform; 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 or future products obsolete; market acceptance of
new products; dependance on distributors to commercialize Merit’s
products in various jurisdictions outside the United States;
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; failure to introduce products in
a timely fashion; price and product competition; fluctuations in
and obsolescence of inventory; and other factors referenced in the
2023 Annual Report and other materials filed with the SEC.
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. Those estimates and all other forward-looking
statements included in this document are made only as of the date
of this document, and except as otherwise required by applicable
law, Merit assumes no obligation to update or disclose revisions to
estimates and all other forward-looking statements.
TRADEMARKS
Unless noted otherwise, trademarks and
registered trademarks used in this release are the property of
Merit Medical Systems, Inc., its subsidiaries, or its
licensors.
Contacts: |
|
PR/Media Inquiries: |
Investor Inquiries: |
Teresa Johnson |
Mike Piccinino, CFA, IRC |
Merit Medical |
Westwicke – ICR |
+1-801-208-4295 |
+1-443-213-0509 |
tjohnson@merit.com |
mike.piccinino@westwicke.com |
|
|
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