Merit Medical Systems, Inc. (NASDAQ: MMSI), a leading manufacturer
and marketer of proprietary disposable medical devices used in
interventional, diagnostic and therapeutic procedures, particularly
in cardiology, radiology, oncology, critical care and endoscopy,
today announced revenue of $218.4 million for the quarter ended
June 30, 2020, a decrease of (14.5)% compared to revenue
of $255.5 million for the quarter ended June 30, 2019.
Core revenue on a constant currency basis* for the second quarter
of 2020 was down (13.6)% compared to revenue for the second quarter
of 2019.
Merit’s GAAP gross margin for the second quarter
of 2020 was 38.6%, compared to GAAP gross margin of 43.8% for the
second quarter of 2019. Merit’s non-GAAP gross margin* for the
second quarter of 2020 was 44.7%, compared to non-GAAP gross
margin* of 48.7% for the second quarter of 2019.
Merit’s GAAP operating margin for the second
quarter of 2020 was (8.7)%, compared to GAAP operating margin of
4.8% for the second quarter of 2019. Merit’s non-GAAP operating
margin* for the second quarter of 2020 was 11.2%, compared to
non-GAAP operating margin* of 13.3% for the second quarter of
2019.
Merit’s GAAP net loss for the second quarter of
2020 was $(19.1) million, or $(0.34) per share, compared to GAAP
net income of $6.9 million, or $0.12 per share, for the second
quarter of 2019. Merit’s non-GAAP net income* for the quarter ended
June 30, 2020 was $17.4 million, or $0.31 per share,
compared to non-GAAP net income* of $23.8 million, or $0.42 per
share, for the quarter ended June 30, 2019.
Merit’s revenue by category for the three and
six-month periods ended June 30, 2020, compared to the
corresponding periods in 2019, was as follows (unaudited, in
thousands, except for percentages):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30, |
|
|
|
Six Months Ended
June 30, |
|
|
% Change |
|
2020 |
|
2019 |
|
% Change |
|
2020 |
|
2019 |
Cardiovascular |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Peripheral Intervention |
|
(18.2) |
% |
$ |
72,635 |
|
$ |
88,848 |
|
(7.9) |
% |
$ |
159,710 |
|
$ |
173,481 |
Cardiac Intervention |
|
(17.1) |
% |
|
66,005 |
|
|
79,643 |
|
(8.9) |
% |
|
138,596 |
|
|
152,183 |
Custom Procedural Solutions |
|
(4.0) |
% |
|
45,319 |
|
|
47,216 |
|
(0.1) |
% |
|
92,940 |
|
|
93,077 |
OEM |
|
(8.9) |
% |
|
28,218 |
|
|
30,959 |
|
(3.3) |
% |
|
56,475 |
|
|
58,405 |
Total |
|
(14.0) |
% |
|
212,177 |
|
|
246,666 |
|
(6.2) |
% |
|
447,721 |
|
|
477,146 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Endoscopy |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Endoscopy devices |
|
(30.1) |
% |
|
6,194 |
|
|
8,866 |
|
(15.3) |
% |
|
14,175 |
|
|
16,735 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
(14.5) |
% |
$ |
218,371 |
|
$ |
255,532 |
|
(6.5) |
% |
$ |
461,896 |
|
$ |
493,881 |
“During the second quarter we continued to make
progress on the goals we initiated in early 2019, including the
movement of 14 product lines and consolidation of certain
facilities,” said Fred P. Lampropoulos, Merit’s Chairman and CEO.
“We are particularly pleased with the generation of free cash flow*
of $32 million for the quarter and $47 million year to date.”
“We also focused on dealing with the challenges
of the COVID-19 pandemic,” Lampropoulos said. “Our priority was the
safety of employees. Deemed an ‘essential provider,’ we continued
operation in all of our facilities worldwide by implementing CDC
recommendations, including temperature testing, social distancing,
mask-wearing, frequent hand-washing and installing separation
barriers.”
“In order to balance the reduction of incoming
sales orders due to the suspension of elective procedures by many
facilities we serve, we reduced headcounts, implemented targeted
furloughs, and reduced salaries for a number of groups, including
all executive positions,” Lampropoulos said. “We also reduced the
number of research and development projects to focus on the highest
priority projects in order to reach our financial and competitive
objectives.”
“During the second quarter, we received the CE
mark for the Merit WRAPSODY™ Endoprosthesis Stent System, and
we have initiated commercialization in the European Union,”
Lampropoulos continued. “We also received approval for the WRAPSODY
Arterial Venous access Efficacy (WAVE) IDE trial from the FDA. This
approval will allow us to proceed on several cohorts with up to 50
institutions and more than 350 patients, in anticipation of
application for the FDA’s consideration of PMA approval for
commercialization in the United States. We also introduced new
products that address needs in the COVID-19 environment which have
had an impact in the second quarter, which we believe will offer
additional opportunities.”
“We added three new directors with substantial
medical device experience and have formed an Operating Committee to
establish future financial and performance objectives that we plan
to announce during our third quarter report in October,”
Lampropoulos said.
“As recently reported, we reached an agreement
with the U.S. Department of Justice to fully resolve its pending
investigation,” Lampropoulos said. “Based upon that agreement, we
recorded a charge of approximately $18 million during the second
quarter. We intend to release additional details regarding the
settlement following the finalization of the settlement
documents.”
“With COVID-19 cases increasing, the pace of
recovery of elective procedures is still uncertain,” Lampropoulos
said. “Access to customers and opportunities to pursue clinical
trials for new products are still very limited. However, we are
still proceeding with new product development, clinical and
regulatory activities, and marketing and training programs.
Assuming eventual progress in the fight against the COVID-19
pandemic, we believe we are well positioned to provide new products
and services as well as reliable supply of our existing
products.”
“In order to maintain various departments and
prepare to meet the needs of our customers, we plan to reduce
certain furloughs and provide guaranteed levels of income for some
sales associates, which will add some expense in the third
quarter,” Lampropoulos added.
“As we enter the uncertainty of the third
quarter, we maintain our guidance suspension for 2020 until we have
more visibility into the future,” Lampropoulos continued. “We
believe we have substantially balanced the inputs and outputs of
revenues and costs, while we strive to maintain a healthy sales
force. We anticipate that additional adjustments will be necessary
as we navigate these uncharted waters. We remain positive about our
prospects for growth and continued profitability as we move
forward.”
As of June 30, 2020, Merit had cash on hand of
approximately $50 million and net borrowing capacity of
approximately $183 million, which was undrawn as of June 30,
2020.
2020 GUIDANCE
Due to the general uncertainty and rapidly
changing global environment related to the COVID-19 pandemic and
corresponding economic downturn, Merit’s management has concluded
that it cannot issue financial guidance for the remainder of
2020.
CONFERENCE CALL
Merit will hold its investor conference call
(conference ID 6997109) today, Wednesday, July 29, 2020, 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 and slide deck will also be available at
merit.com. CONSOLIDATED BALANCE
SHEETS(in thousands)
|
|
|
|
|
|
|
|
|
June 30, |
|
|
|
|
2020 |
|
December 31, |
|
|
(unaudited) |
|
2019 |
ASSETS |
|
|
|
|
|
Current Assets |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
49,702 |
|
|
$ |
44,320 |
|
Trade receivables, net |
|
|
138,792 |
|
|
|
155,365 |
|
Other receivables |
|
|
8,214 |
|
|
|
10,016 |
|
Inventories |
|
|
221,417 |
|
|
|
225,698 |
|
Prepaid expenses and other current assets |
|
|
13,860 |
|
|
|
12,497 |
|
Prepaid income taxes |
|
|
3,493 |
|
|
|
3,491 |
|
Income tax refund receivables |
|
|
10,467 |
|
|
|
3,151 |
|
Total current assets |
|
|
445,945 |
|
|
|
454,538 |
|
|
|
|
|
|
|
|
Property and equipment,
net |
|
|
383,629 |
|
|
|
378,785 |
|
Intangible assets, net |
|
|
413,990 |
|
|
|
445,312 |
|
Goodwill |
|
|
353,093 |
|
|
|
353,193 |
|
Deferred income tax
assets |
|
|
3,748 |
|
|
|
3,788 |
|
Right-of-use operating lease
assets |
|
|
79,051 |
|
|
|
80,244 |
|
Other assets |
|
|
36,413 |
|
|
|
41,461 |
|
Total Assets |
|
|
1,715,869 |
|
|
|
1,757,321 |
|
|
|
|
|
|
|
|
LIABILITIES
AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
Current Liabilities |
|
|
|
|
|
|
Trade payables |
|
$ |
44,444 |
|
|
$ |
54,623 |
|
Accrued expenses |
|
|
106,934 |
|
|
|
105,184 |
|
Current portion of long-term debt |
|
|
7,500 |
|
|
|
7,500 |
|
Short-term operating lease liabilities |
|
|
12,886 |
|
|
|
11,550 |
|
Income taxes payable |
|
|
2,460 |
|
|
|
2,799 |
|
Total current liabilities |
|
|
174,224 |
|
|
|
181,656 |
|
|
|
|
|
|
|
|
Long-term debt |
|
|
402,915 |
|
|
|
431,984 |
|
Deferred income tax
liabilities |
|
|
45,236 |
|
|
|
45,236 |
|
Long-term income taxes
payable |
|
|
347 |
|
|
|
347 |
|
Liabilities related to
unrecognized tax benefits |
|
|
1,990 |
|
|
|
1,990 |
|
Deferred compensation
payable |
|
|
14,194 |
|
|
|
14,855 |
|
Deferred credits |
|
|
2,053 |
|
|
|
2,122 |
|
Long-term operating lease
liabilities |
|
|
71,785 |
|
|
|
72,714 |
|
Other long-term
obligations |
|
|
74,278 |
|
|
|
56,473 |
|
Total Liabilities |
|
|
787,022 |
|
|
|
807,377 |
|
|
|
|
|
|
|
|
Stockholders' Equity |
|
|
|
|
|
|
Common stock |
|
|
595,726 |
|
|
|
587,017 |
|
Retained earnings |
|
|
345,434 |
|
|
|
368,221 |
|
Accumulated other comprehensive loss |
|
|
(12,313 |
) |
|
|
(5,294 |
) |
Total Stockholders' Equity |
|
|
928,847 |
|
|
|
949,944 |
|
Total Liabilities and
Stockholders' Equity |
|
$ |
1,715,869 |
|
|
$ |
1,757,321 |
|
CONSOLIDATED STATEMENTS OF INCOME
(LOSS)(Unaudited, in thousands except
per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
NET SALES |
|
$ |
218,371 |
|
|
$ |
255,532 |
|
|
$ |
461,896 |
|
|
$ |
493,881 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COST OF SALES |
|
|
134,155 |
|
|
|
143,568 |
|
|
|
273,896 |
|
|
|
277,281 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GROSS PROFIT |
|
|
84,216 |
|
|
|
111,964 |
|
|
|
188,000 |
|
|
|
216,600 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING EXPENSES: |
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative |
|
|
66,767 |
|
|
|
79,977 |
|
|
|
145,575 |
|
|
|
158,247 |
|
Research and development |
|
|
14,026 |
|
|
|
16,332 |
|
|
|
28,898 |
|
|
|
32,375 |
|
Legal settlement |
|
|
18,200 |
|
|
|
— |
|
|
|
18,200 |
|
|
|
— |
|
Impairment and other charges |
|
|
3,875 |
|
|
|
548 |
|
|
|
7,720 |
|
|
|
548 |
|
Contingent consideration expense |
|
|
343 |
|
|
|
2,406 |
|
|
|
5,240 |
|
|
|
3,181 |
|
Acquired in-process research and development |
|
|
— |
|
|
|
500 |
|
|
|
— |
|
|
|
525 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses |
|
|
103,211 |
|
|
|
99,763 |
|
|
|
205,633 |
|
|
|
194,876 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME (LOSS) FROM
OPERATIONS |
|
|
(18,995 |
) |
|
|
12,201 |
|
|
|
(17,633 |
) |
|
|
21,724 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER INCOME (EXPENSE): |
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
|
|
88 |
|
|
|
342 |
|
|
|
167 |
|
|
|
698 |
|
Interest expense |
|
|
(2,715 |
) |
|
|
(3,115 |
) |
|
|
(5,859 |
) |
|
|
(5,879 |
) |
Other expense - net |
|
|
(678 |
) |
|
|
(429 |
) |
|
|
(967 |
) |
|
|
(698 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total other expense — net |
|
|
(3,305 |
) |
|
|
(3,202 |
) |
|
|
(6,659 |
) |
|
|
(5,879 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME (LOSS) BEFORE INCOME
TAXES |
|
|
(22,300 |
) |
|
|
8,999 |
|
|
|
(24,292 |
) |
|
|
15,845 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME TAX (BENEFIT)
EXPENSE |
|
|
(3,242 |
) |
|
|
2,140 |
|
|
|
(2,080 |
) |
|
|
2,791 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INCOME (LOSS) |
|
$ |
(19,058 |
) |
|
$ |
6,859 |
|
|
$ |
(22,212 |
) |
|
$ |
13,054 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EARNINGS (LOSS) PER COMMON
SHARE: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
(0.34 |
) |
|
$ |
0.12 |
|
|
$ |
(0.40 |
) |
|
$ |
0.24 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted |
|
$ |
(0.34 |
) |
|
$ |
0.12 |
|
|
$ |
(0.40 |
) |
|
$ |
0.23 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AVERAGE COMMON SHARES: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
55,406 |
|
|
|
55,017 |
|
|
|
55,326 |
|
|
|
54,967 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted |
|
|
55,406 |
|
|
|
56,555 |
|
|
|
55,326 |
|
|
|
56,523 |
|
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 certain 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,
- core revenue on a constant currency basis,
- non-GAAP operating margin,
- non-GAAP earnings per share, and
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 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
earnings per share, non-GAAP gross margin, non-GAAP operating
margin, and non-GAAP net income (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 transactions, non-cash expenses related to amortization
or write-off of previously acquired tangible and intangible assets,
severance expenses, expenses resulting from non-ordinary course
litigation or administrative proceedings and resulting settlements,
governmental proceedings or changes in tax or industry regulations,
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 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 Revenue
Merit’s revenue on a constant currency basis is
prepared by translating 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. The constant currency
revenue adjustments of $2.7 million and $5.5 million to reported
revenue and to core revenue for the three and six-month periods
ended June 30, 2020, respectively, were calculated using the
applicable average foreign exchange rates for the three and
six-month periods ended June 30, 2019, respectively.
Core Revenue and Core Revenue on a Constant Currency
Basis
Merit’s core revenue is defined (a) with respect
to prior fiscal year periods, as GAAP revenue, and (b) with respect
to current fiscal year periods, as GAAP revenue, less revenue from
certain acquisitions and strategic transactions. For the three and
six-month period ended June 30, 2020, Merit’s core revenue excludes
revenues attributable to the acquisition of (1) Brightwater
Medical, Inc. in June 2019 (excluded through May 2020 only), and
(2) Fibrovein Holdings Limited in August 2019. Core revenue on a
constant currency basis is defined as core revenue (as described in
the first sentence of this paragraph) adjusted to eliminate the
foreign exchange impact related to those core revenues for the
relevant period, using the applicable average foreign exchange
rates in effect for the comparable prior-year periods
presented.
Non-GAAP Gross Margin
Non-GAAP gross margin is calculated by reducing
GAAP cost of sales by amounts recorded for amortization of
intangible assets, certain inventory write-offs and inventory
mark-up related to acquisitions.
Non-GAAP Operating Margin
Non-GAAP operating margin is calculated by
adjusting GAAP operating income (loss) 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 new acquisitions, non-cash expenses related to
amortization or write-off of previously acquired tangible and
intangible assets, severance expenses, performance-based stock
compensation expenses, expenses resulting from non-ordinary course
litigation or administrative proceedings and resulting settlements,
governmental proceedings or changes in industry regulations, as
well as other items set forth in the tables below.
Non-GAAP Net Income
Non-GAAP net income is calculated by adjusting
GAAP net income (loss) for the items set forth in the definition of
non-GAAP operating margin above, as well as for expenses related to
debt issuance costs and changes in tax regulations, as well as
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 less capital expenditures as defined by GAAP in the
consolidated statement of cash flows.
Other Non-GAAP Financial Measure
Reconciliation
The following tables set 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 six-month periods ended June 30, 2020 and 2019.
The non-GAAP income adjustments referenced in the following tables
do not reflect non-performance-based stock compensation expense of
approximately $2.4 million and $2.5 million for the three-month
periods ended June 30, 2020 and 2019, respectively, and
approximately $4.7 million and $4.3 million for the six-month
periods ended June 30, 2020 and 2019, respectively.
Reconciliation of GAAP Net Income
(Loss) to Non-GAAP Net Income(Unaudited, in
thousands except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, 2020 |
|
|
Pre-Tax |
|
Tax Impact (a) |
|
After-Tax |
|
Per Share Impact |
GAAP net loss |
|
$ |
(22,300 |
) |
|
$ |
3,242 |
|
|
$ |
(19,058 |
) |
|
$ |
(0.34 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
Cost of Sales |
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of intangibles |
|
|
12,807 |
|
|
|
(3,300 |
) |
|
|
9,507 |
|
|
|
0.17 |
|
Inventory write-off (b) |
|
|
345 |
|
|
|
(104 |
) |
|
|
241 |
|
|
|
0.00 |
|
Inventory mark-up related to acquisitions |
|
|
146 |
|
|
|
(37 |
) |
|
|
109 |
|
|
|
0.00 |
|
Operating Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
Severance |
|
|
1,301 |
|
|
|
(364 |
) |
|
|
937 |
|
|
|
0.02 |
|
Acquisition and restructuring-related (c) |
|
|
715 |
|
|
|
(197 |
) |
|
|
518 |
|
|
|
0.01 |
|
Medical Device Regulation expenses (d) |
|
|
303 |
|
|
|
(78 |
) |
|
|
225 |
|
|
|
0.00 |
|
Fair value adjustments to contingent consideration (e) |
|
|
343 |
|
|
|
45 |
|
|
|
388 |
|
|
|
0.01 |
|
Impairment and other charges (f) |
|
|
3,894 |
|
|
|
(1,105 |
) |
|
|
2,789 |
|
|
|
0.05 |
|
Amortization of intangibles |
|
|
1,975 |
|
|
|
(533 |
) |
|
|
1,442 |
|
|
|
0.03 |
|
Special legal expense (g) |
|
|
1,710 |
|
|
|
(440 |
) |
|
|
1,270 |
|
|
|
0.02 |
|
DOJ Settlement (h) |
|
|
18,200 |
|
|
|
(636 |
) |
|
|
17,564 |
|
|
|
0.31 |
|
Activist shareholder recovery fees |
|
|
563 |
|
|
|
(145 |
) |
|
|
418 |
|
|
|
0.01 |
|
Performance-based share-based compensation (i) |
|
|
1,064 |
|
|
|
(140 |
) |
|
|
924 |
|
|
|
0.02 |
|
Other (Income) Expense |
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of long-term debt issuance costs |
|
|
151 |
|
|
|
(39 |
) |
|
|
112 |
|
|
|
0.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net income |
|
$ |
21,217 |
|
|
$ |
(3,831 |
) |
|
$ |
17,386 |
|
|
$ |
0.31 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted shares (j) |
|
|
|
|
|
|
|
|
|
|
|
56,250 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, 2019 |
|
|
Pre-Tax |
|
|
Tax Impact (a) |
|
|
After-Tax |
|
|
Per Share Impact |
GAAP net income |
|
$ |
8,999 |
|
|
$ |
(2,140 |
) |
|
|
$ |
6,859 |
|
|
$ |
0.12 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of Sales |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of intangibles |
|
|
12,178 |
|
|
|
(3,118 |
) |
|
|
|
9,060 |
|
|
|
0.16 |
Inventory mark-up related to acquisitions |
|
|
212 |
|
|
|
(54 |
) |
|
|
|
158 |
|
|
|
0.00 |
Operating Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Severance |
|
|
494 |
|
|
|
(127 |
) |
|
|
|
367 |
|
|
|
0.01 |
Acquisition and restructuring-related (c) |
|
|
1,173 |
|
|
|
(289 |
) |
|
|
|
884 |
|
|
|
0.02 |
Medical Device Regulation expenses (d) |
|
|
113 |
|
|
|
(29 |
) |
|
|
|
84 |
|
|
|
0.00 |
Fair value adjustments to contingent consideration (e) |
|
|
2,406 |
|
|
|
(44 |
) |
|
|
|
2,362 |
|
|
|
0.04 |
Acquired in-process research and development |
|
|
500 |
|
|
|
(129 |
) |
|
|
|
371 |
|
|
|
0.01 |
Impairment and other charges (f) |
|
|
971 |
|
|
|
(250 |
) |
|
|
|
721 |
|
|
|
0.02 |
Amortization of intangibles |
|
|
2,699 |
|
|
|
(710 |
) |
|
|
|
1,989 |
|
|
|
0.03 |
Special legal expense (g) |
|
|
1,015 |
|
|
|
(261 |
) |
|
|
|
754 |
|
|
|
0.01 |
Other (Income) Expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of long-term debt issuance costs |
|
|
201 |
|
|
|
(52 |
) |
|
|
|
149 |
|
|
|
0.00 |
Tax expense related to restructuring (k) |
|
|
— |
|
|
|
2 |
|
|
|
|
2 |
|
|
|
0.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net income |
|
$ |
30,961 |
|
|
$ |
(7,201 |
) |
|
|
$ |
23,760 |
|
|
$ |
0.42 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted shares |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
56,555 |
Reconciliation of GAAP Net Income
(Loss) to Non-GAAP Net Income(Unaudited, in
thousands except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, 2020 |
|
|
Pre-Tax |
|
Tax Impact (a) |
|
After-Tax |
|
Per Share Impact |
GAAP net loss |
|
$ |
(24,292 |
) |
|
$ |
2,080 |
|
|
$ |
(22,212 |
) |
|
$ |
(0.40 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
Cost of Sales |
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of intangibles |
|
|
25,624 |
|
|
|
(6,604 |
) |
|
|
19,020 |
|
|
|
0.34 |
|
Inventory write-off (b) |
|
|
1,776 |
|
|
|
(472 |
) |
|
|
1,304 |
|
|
|
0.02 |
|
Inventory mark-up related to acquisitions |
|
|
146 |
|
|
|
(37 |
) |
|
|
109 |
|
|
|
0.00 |
|
Operating Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
Severance |
|
|
2,711 |
|
|
|
(727 |
) |
|
|
1,984 |
|
|
|
0.04 |
|
Acquisition and restructuring-related (c) |
|
|
1,388 |
|
|
|
(357 |
) |
|
|
1,031 |
|
|
|
0.02 |
|
Medical Device Regulation expenses (d) |
|
|
603 |
|
|
|
(155 |
) |
|
|
448 |
|
|
|
0.01 |
|
Fair value adjustments to contingent consideration (e) |
|
|
5,240 |
|
|
|
66 |
|
|
|
5,306 |
|
|
|
0.10 |
|
Impairment and other charges (f) |
|
|
7,820 |
|
|
|
(1,219 |
) |
|
|
6,601 |
|
|
|
0.12 |
|
Amortization of intangibles |
|
|
4,157 |
|
|
|
(1,124 |
) |
|
|
3,033 |
|
|
|
0.06 |
|
Special legal expense (g) |
|
|
3,212 |
|
|
|
(827 |
) |
|
|
2,385 |
|
|
|
0.04 |
|
DOJ Settlement (h) |
|
|
18,200 |
|
|
|
(636 |
) |
|
|
17,564 |
|
|
|
0.31 |
|
Activist shareholder recovery fees |
|
|
563 |
|
|
|
(145 |
) |
|
|
418 |
|
|
|
0.01 |
|
Performance-based share-based compensation (i) |
|
|
1,511 |
|
|
|
(192 |
) |
|
|
1,319 |
|
|
|
0.02 |
|
Other (Income) Expense |
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of long-term debt issuance costs |
|
|
302 |
|
|
|
(78 |
) |
|
|
224 |
|
|
|
0.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net income |
|
$ |
48,961 |
|
|
$ |
(10,427 |
) |
|
$ |
38,534 |
|
|
$ |
0.69 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted shares (j) |
|
|
|
|
|
|
|
|
|
|
|
56,133 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, 2019 |
|
|
Pre-Tax |
|
|
Tax Impact (a) |
|
|
After-Tax |
|
|
Per Share Impact |
GAAP net income |
|
$ |
15,845 |
|
|
$ |
(2,791 |
) |
|
|
$ |
13,054 |
|
|
$ |
0.23 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of Sales |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of intangibles |
|
|
24,157 |
|
|
|
(6,185 |
) |
|
|
|
17,972 |
|
|
|
0.32 |
Inventory mark-up related to acquisitions |
|
|
884 |
|
|
|
(228 |
) |
|
|
|
656 |
|
|
|
0.01 |
Operating Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Severance |
|
|
822 |
|
|
|
(212 |
) |
|
|
|
610 |
|
|
|
0.01 |
Acquisition and restructuring-related (c) |
|
|
1,741 |
|
|
|
(435 |
) |
|
|
|
1,306 |
|
|
|
0.02 |
Medical Device Regulation expenses (d) |
|
|
113 |
|
|
|
(29 |
) |
|
|
|
84 |
|
|
|
0.00 |
Fair value adjustments to contingent consideration (e) |
|
|
3,181 |
|
|
|
(185 |
) |
|
|
|
2,996 |
|
|
|
0.05 |
Acquired in-process research and development |
|
|
525 |
|
|
|
(135 |
) |
|
|
|
390 |
|
|
|
0.01 |
Impairment and other charges (f) |
|
|
1,182 |
|
|
|
(304 |
) |
|
|
|
878 |
|
|
|
0.02 |
Amortization of intangibles |
|
|
5,506 |
|
|
|
(1,450 |
) |
|
|
|
4,056 |
|
|
|
0.07 |
Special legal expense (g) |
|
|
2,678 |
|
|
|
(689 |
) |
|
|
|
1,989 |
|
|
|
0.04 |
Other (Income) Expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of long-term debt issuance costs |
|
|
402 |
|
|
|
(104 |
) |
|
|
|
298 |
|
|
|
0.01 |
Tax expense related to restructuring (k) |
|
|
— |
|
|
|
93 |
|
|
|
|
93 |
|
|
|
0.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net income |
|
$ |
57,036 |
|
|
$ |
(12,654 |
) |
|
|
$ |
44,382 |
|
|
$ |
0.79 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted shares |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
56,523 |
Reconciliation of Reported Operating
Income (Loss) to Non-GAAP Operating
Income(Unaudited, in thousands except
percentages)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Three Months Ended |
|
Six Months Ended |
|
Six Months Ended |
|
|
June 30, 2020 |
|
June 30, 2019 |
|
June 30, 2020 |
|
June 30, 2019 |
|
|
Amounts |
|
% Sales |
|
Amounts |
|
% Sales |
|
Amounts |
|
% Sales |
|
Amounts |
|
% Sales |
Net Sales as Reported |
|
$ |
218,371 |
|
|
|
|
|
$ |
255,532 |
|
|
|
|
$ |
461,896 |
|
|
|
|
|
$ |
493,881 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Operating Income (Loss) |
|
|
(18,995 |
) |
|
(8.7) |
% |
|
|
12,201 |
|
4.8 |
% |
|
|
(17,633 |
) |
|
(3.8) |
% |
|
|
21,724 |
|
4.4 |
% |
Cost of Sales |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of intangibles |
|
|
12,807 |
|
|
5.8 |
% |
|
|
12,178 |
|
4.8 |
% |
|
|
25,624 |
|
|
5.6 |
% |
|
|
24,157 |
|
4.9 |
% |
Inventory write-off (b) |
|
|
345 |
|
|
0.2 |
% |
|
|
— |
|
— |
|
|
|
1,776 |
|
|
0.5 |
% |
|
|
— |
|
— |
|
Inventory mark-up related to acquisitions |
|
|
146 |
|
|
0.1 |
% |
|
|
212 |
|
0.1 |
% |
|
|
146 |
|
|
0.0 |
% |
|
|
884 |
|
0.2 |
% |
Operating Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Severance |
|
|
1,301 |
|
|
0.6 |
% |
|
|
494 |
|
0.2 |
% |
|
|
2,711 |
|
|
0.6 |
% |
|
|
822 |
|
0.2 |
% |
Acquisition and restructuring-related (c) |
|
|
715 |
|
|
0.3 |
% |
|
|
1,173 |
|
0.5 |
% |
|
|
1,388 |
|
|
0.3 |
% |
|
|
1,741 |
|
0.4 |
% |
Medical Device Regulation expenses (d) |
|
|
303 |
|
|
0.1 |
% |
|
|
113 |
|
0.0 |
% |
|
|
603 |
|
|
0.1 |
% |
|
|
113 |
|
0.0 |
% |
Fair value adjustment to contingent consideration (e) |
|
|
343 |
|
|
0.2 |
% |
|
|
2,406 |
|
0.9 |
% |
|
|
5,240 |
|
|
1.1 |
% |
|
|
3,181 |
|
0.6 |
% |
Acquired in-process research & development |
|
|
— |
|
|
— |
|
|
|
500 |
|
0.2 |
% |
|
|
— |
|
|
— |
|
|
|
525 |
|
0.1 |
% |
Impairment and other charges (f) |
|
|
3,894 |
|
|
1.8 |
% |
|
|
971 |
|
0.4 |
% |
|
|
7,820 |
|
|
1.7 |
% |
|
|
1,182 |
|
0.3 |
% |
Amortization of intangibles |
|
|
1,975 |
|
|
0.9 |
% |
|
|
2,699 |
|
1.0 |
% |
|
|
4,157 |
|
|
0.9 |
% |
|
|
5,506 |
|
1.1 |
% |
Special legal expense (g) |
|
|
1,710 |
|
|
0.8 |
% |
|
|
1,015 |
|
0.4 |
% |
|
|
3,212 |
|
|
0.7 |
% |
|
|
2,678 |
|
0.5 |
% |
DOJ Settlement (h) |
|
|
18,200 |
|
|
8.3 |
% |
|
|
— |
|
— |
|
|
|
18,200 |
|
|
3.9 |
% |
|
|
— |
|
— |
|
Activist shareholder recovery fees |
|
|
563 |
|
|
0.3 |
% |
|
|
— |
|
— |
|
|
|
563 |
|
|
0.1 |
% |
|
|
— |
|
— |
|
Performance-based share-based compensation (i) |
|
|
1,064 |
|
|
0.5 |
% |
|
|
— |
|
— |
|
|
|
1,511 |
|
|
0.3 |
% |
|
|
— |
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Operating Income |
|
$ |
24,371 |
|
|
11.2 |
% |
|
$ |
33,962 |
|
13.3 |
% |
|
$ |
55,318 |
|
|
12.0 |
% |
|
$ |
62,513 |
|
12.7 |
% |
a) Reflects the tax effect associated with
pre-tax income (loss) and the non-GAAP adjustments. b) Represents
write-off of inventory related to the announced closure of
the ITL Healthcare Pty Ltd. (“ITL”) procedure pack operations
in Australia in Q2 2020 and our distribution agreement with
NinePoint Medical, Inc in Q1 2020.c) Represents transaction costs
and certain integration costs related to acquisitions and certain
restructuring costs, including accelerated depreciation for certain
fixed assets related to our announced closure of the ITL procedure
pack operations in Australia.d) Represents incremental expenses
incurred to comply with the Medical Device Regulation (MDR) in
Europe.e) Represents changes in the fair value of contingent
consideration liabilities and contingent receivables as a result of
acquisitions.f) Represents impairment charges related to abandoned
patents, other long-term assets, certain acquired intangible
assets, right-of-use operating lease assets, and in 2020 the option
to purchase Bluegrass Vascular Technologies, Inc.g) Costs incurred
in responding to an inquiry from the U.S. Department of Justice.h)
Accrued amount anticipated to be paid in settlement of an inquiry
from the U.S. Department of Justice.i) Represents performance-based
share-based compensation expense, including stock-settled and
cash-settled awards.j) For the three and six-months periods ended
June 30, 2020 the non-GAAP net income per diluted share calculation
includes 844 and 807 shares, respectively, that were excluded from
the GAAP net income per diluted share calculation.k) Net tax
expense related to non-recurring tax withholdings in connection
with restructuring of certain international subsidiaries.
Reconciliation of Reported Revenue to
Core Revenue (Non-GAAP), Constant Currency Revenue (Non-GAAP), and
Core Revenue on a Constant Currency Basis
(Non-GAAP)(Unaudited; in thousands
except percentages)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
Six Months Ended |
|
|
|
|
June 30, |
|
|
|
June 30, |
|
|
% Change |
|
2020 |
|
2019 |
|
% Change |
|
2020 |
|
2019 |
Reported Revenue |
|
(14.5) |
% |
$ |
218,371 |
|
$ |
255,532 |
|
(6.5) |
% |
$ |
461,896 |
|
$ |
493,881 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Add: Impact of foreign
exchange (a) |
|
|
|
|
2,693 |
|
|
— |
|
|
|
|
5,495 |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Constant
Currency Revenue |
|
(13.5) |
% |
$ |
221,064 |
|
$ |
255,532 |
|
(5.4) |
% |
$ |
467,391 |
|
$ |
493,881 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
Six Months Ended |
|
|
|
|
June 30, |
|
|
|
June 30, |
|
|
% Change |
|
2020 |
|
2019 |
|
% Change |
|
2020 |
|
2019 |
Reported Revenue |
|
(14.5) |
% |
$ |
218,371 |
|
$ |
255,532 |
|
(6.5) |
% |
$ |
461,896 |
|
$ |
493,881 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: Revenue from certain
acquisitions (b) |
|
|
|
|
(400) |
|
|
— |
|
|
|
|
(1,170) |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core
Revenue |
|
(14.7) |
% |
$ |
217,971 |
|
$ |
255,532 |
|
(6.7) |
% |
$ |
460,726 |
|
$ |
493,881 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Add: Impact of foreign
exchange (a) |
|
|
|
|
2,693 |
|
|
— |
|
|
|
|
5,495 |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core Revenue
on a Constant Currency Basis |
|
(13.6) |
% |
$ |
220,664 |
|
$ |
255,532 |
|
(5.6) |
% |
$ |
466,221 |
|
$ |
493,881 |
(a) The constant currency revenue adjustments of
$2.7 million and $5.5 million to reported revenue and to core
revenue for the three and six months ended June 30, 2020,
respectively, were calculated using the applicable average foreign
exchange rates for the three and six months ended June 30,
2019, respectively.
(b) Merit’s core revenue is defined (a) with
respect to prior fiscal year periods, as GAAP revenue, and (b) with
respect to current fiscal year periods, as GAAP revenue, less
revenue from certain acquisitions and strategic transactions. For
the three and six-month periods ended June 30, 2020, Merit’s core
revenue excludes revenues attributable to the acquisition of (1)
Brightwater Medical, Inc. in June 2019 (excluded through May 2020
only), and (2) Fibrovein Holdings Limited in August 2019. Core
revenue on a constant currency basis is defined as core revenue (as
described in the first sentence of this paragraph) adjusted to
eliminate the foreign exchange impact related to those core
revenues for the relevant period, using the applicable average
foreign exchange rates in effect for the comparable prior-year
periods presented.
Reconciliation of Reported Gross Margin
to Non-GAAP Gross Margin
(Non-GAAP)(Unaudited, as
a percentage of reported revenue)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Six Months Ended |
|
|
|
June 30, |
|
June 30, |
|
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|
Reported Gross Margin |
|
38.6 |
% |
43.8 |
% |
40.7 |
% |
43.9 |
% |
|
|
|
|
|
|
|
|
|
|
Add back impact of: |
|
|
|
|
|
|
|
|
|
Amortization of intangibles |
|
5.9 |
% |
4.8 |
% |
5.6 |
% |
4.8 |
% |
Inventory write-off (a) |
|
0.1 |
% |
— |
|
0.4 |
% |
— |
|
Inventory mark-up related to acquisitions |
|
0.1 |
% |
0.1 |
% |
0.0 |
% |
0.2 |
% |
|
|
|
|
|
|
|
|
|
|
Non-GAAP Gross Margin |
|
44.7 |
% |
48.7 |
% |
46.7 |
% |
48.9 |
% |
(a) Represents write-off of inventory related
to: the announced closure of the ITL procedure pack operations
in Australia in Q2 2020 and our distribution agreement with
NinePoint Medical, Inc in Q1 2020.
ABOUT MERIT
Founded in 1987, Merit Medical
Systems, Inc. is a leading manufacturer and marketer 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 in excess of 300
individuals. Merit employs approximately 6,000 people
worldwide with facilities in South Jordan, Utah; Pearland, Texas;
Richmond, Virginia; Malvern, Pennsylvania; Rockland, Massachusetts;
Aliso Viejo, California; Maastricht and Venlo, The Netherlands;
Paris, France; Galway, Ireland; Beijing, China; Tijuana, Mexico;
Joinville, Brazil; Ontario, Canada; Melbourne, Australia; Tokyo,
Japan; Reading, United Kingdom; Johannesburg, South Africa; and
Singapore.
FORWARD-LOOKING STATEMENTS
Statements contained in this release which are
not purely historical, including, without limitation, statements
regarding Merit’s forecasted plans, net sales, net income (GAAP and
non-GAAP), gross and operating margins (GAAP and non-GAAP),
earnings per share (GAAP and non-GAAP), free cash flow, effective
tax rate and other financial results, the potential impact, scope
and duration of, and Merit’s response to, the coronavirus
(COVID-19) pandemic and the potential for recovery from that
pandemic, consolidation of Merit’s facilities or other expense
reduction initiatives, anticipated settlement of a pending
government investigation, the consequences of existing or future
regulatory approvals, or the development and commercialization of
new products, 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,
2019, as amended by Amendment No. 1 to Annual Report on Form 10-K/A
(as amended, the “2019 Annual Report”) and subsequent filings with
the Securities and Exchange Commission. Such risks and
uncertainties include inherent risks and uncertainties relating to
Merit’s internal models or the projections in this release; risks
and uncertainties associated with the COVID-19 pandemic and Merit’s
response thereto; 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; negative changes in economic and industry conditions
in the United States or other countries; 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; litigation and other judicial proceedings affecting Merit;
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; actions of activist shareholders, including a potential
proxy contest; product recalls and product liability claims;
changes in customer purchasing patterns or the mix of products
Merit sells; 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; increases in the prices of commodity components;
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, 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 countries;
termination or interruption of relationships with Merit’s
suppliers, or failure of such suppliers to perform; fluctuations in
exchange rates; uncertainties relating to the LIBOR calculation
method and the expected discontinuation of LIBOR; 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; 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 referenced in the 2019
Annual Report 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.
TRADEMARKS
Unless noted otherwise, trademarks and
registered trademarks used in this release are the property of
Merit Medical Systems, Inc. and its subsidiaries in the United
States and other jurisdictions.
Contacts: |
|
Judy Wagner |
Patrick McCarty |
Corporate Communications |
Investor Relations |
+1-801-208-4793 |
+1-801-208-4581 |
jwagner@merit.com |
patrick.mccarty@merit.com |
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