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 $258.0 million for the quarter ended
December 31, 2020, essentially flat compared to the prior
year period. Core revenue on a constant currency basis* for the
fourth quarter of 2020 was down (1.0)% compared to the prior year
period. For the year ended December 31, 2020, Merit's revenue was
$963.9 million, down (3.1)% compared to 2019. Core revenue on a
comparable, constant currency basis* for the year ended December
31, 2020 was down (3.1)% when compared to 2019.
Merit’s GAAP gross margin for the fourth quarter
of 2020 was 43.1%, compared to GAAP gross margin of 43.3% for the
prior year period. Merit’s non-GAAP gross margin* for the fourth
quarter of 2020 was 47.9%, compared to non-GAAP gross margin* of
48.3% for the prior year period. Merit’s GAAP gross margin for the
year ended December 31, 2020 was 41.6%, compared to GAAP gross
margin of 43.5% for the prior year. Merit’s non-GAAP gross margin*
for the year ended December 31, 2020 was 47.1%, compared to
non-GAAP gross margin* of 48.6% for the prior year.
Merit’s GAAP net income for the fourth quarter
of 2020 was $15.4 million, or $0.27 per share, compared to a GAAP
net loss of ($4.2) million, or ($0.08) per share, for the prior
year period. Merit’s non-GAAP net income* for the fourth quarter of
2020 was $30.8 million, or $0.54 per share, compared to non-GAAP
net income* of $22.1 million, or $0.40 per share, for the prior
year period. Merit’s GAAP net loss for the year ended December 31,
2020 was ($9.8) million, or ($0.18) per share, compared to GAAP net
income of $5.5 million or $0.10 per share, for 2019. Merit’s
non-GAAP net income* for the year ended December 31, 2020 was $93.3
million, or $1.65 per share, compared to non-GAAP net income* of
$82.1 million or $1.46 per share, for 2019.
Merit’s revenue by operating segment and product
category for the three and twelve-month periods ended December 31,
2020 and 2019 was as follows (unaudited, in thousands, except
for percentages):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
Year Ended |
|
|
|
|
December 31, |
|
|
|
December 31, |
|
|
% Change |
|
2020 |
|
2019 |
|
% Change |
|
2020 |
|
2019 |
Cardiovascular |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Peripheral Intervention |
|
2.0 |
% |
|
$ |
95,080 |
|
$ |
93,192 |
|
(2.7 |
)% |
|
$ |
341,568 |
|
$ |
350,936 |
Cardiac Intervention |
|
(7.4 |
)% |
|
|
71,986 |
|
|
77,755 |
|
(8.2 |
)% |
|
|
279,671 |
|
|
304,797 |
Custom Procedural Solutions |
|
12.1 |
% |
|
|
53,827 |
|
|
48,024 |
|
8.5 |
% |
|
|
203,196 |
|
|
187,359 |
OEM |
|
(4.2 |
)% |
|
|
29,175 |
|
|
30,440 |
|
(6.9 |
)% |
|
|
109,767 |
|
|
117,889 |
Total |
|
0.3 |
% |
|
|
250,068 |
|
|
249,411 |
|
(2.8 |
)% |
|
|
934,202 |
|
|
960,981 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Endoscopy |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Endoscopy devices |
|
(6.8 |
)% |
|
|
7,936 |
|
|
8,511 |
|
(12.4 |
)% |
|
|
29,673 |
|
|
33,871 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
0.0 |
% |
|
$ |
258,004 |
|
$ |
257,922 |
|
(3.1 |
)% |
|
$ |
963,875 |
|
$ |
994,852 |
“We delivered fourth quarter revenue results
above the high-end of our guidance range, increasing 6%
quarter-over-quarter as reported, despite the challenging operating
environment and slower-than-expected pace of recovery from the
COVID-19 pandemic in many of our primary markets around the world,”
said Fred P. Lampropoulos, Merit’s Chairman and Chief Executive
Officer. “We are proud of the continued improvement in
profitability performance in Q4, including a 23% increase in
non-GAAP operating profit year-over-year and a 288% increase in
free cash flow to more than $26 million in the quarter.”
Mr. Lampropoulos continued: “Our financial
guidance for 2021 reflects cautious optimism on the prospects for
an improving operating environment as we progress through the year,
with continued COVID-19-related headwinds over the first half of
the year, and a return to more normalized growth as the overall
global recovery takes shape over the second half of the year.
Importantly, while our 2021 guidance reflects total revenue growth,
on a constant currency basis, in the low-to-mid single digits
year-over-year, excluding the impact of divestitures and product
sales that uniquely benefitted from pandemic-related demand trends
in 2020, our revenue guidance reflects growth in the mid-to-high
single digits year-over-year in 2021. We also expect to report
improving non-GAAP gross and operating margins and strong free cash
flow in 2021, driven by strong execution and contributions from our
multi-year strategic initiatives related to our Foundations for
Growth Program.”
As of December 31, 2020, Merit had cash on hand
of approximately $56.9 million, long term debt obligations of
approximately $352 million, and available borrowing capacity of
$389 million, compared to cash on hand of approximately $44.3
million, long term debt obligations of $440 million, and available
borrowing capacity of $134 million as of December 31, 2019.
Fiscal Year 2021 Financial Guidance:
Based upon information currently available to
Merit’s management, Merit estimates for the year ending
December 31, 2021, absent material acquisitions, non-recurring
transactions or other factors beyond Merit’s control, the
following:
- Net revenue in the range of $990
million to $1.01 billion, representing an increase of approximately
2.7% to 4.8% year over year, as compared to net revenue of $963.9
million for the twelve months ended December 31, 2020. The fiscal
year 2021 revenue guidance range assumes:
- Net revenue from the cardiovascular
segment of between $959.3 million and $978.6 million, representing
an increase of approximately 2.7% to 4.8% year-over-year as
compared to net revenue of $934.2 million for the twelve months
ended December 31, 2020.
- Net revenue from the endoscopy
segment of between $30.8 million and $31.9 million, representing an
increase of approximately 4% to 7% year-over-year as compared to
net revenue of $29.7 million for the twelve months ended December
31, 2020.
- GAAP net income in the range of
$47.3 million to $55.9 million, or $0.83 to $0.98 per diluted
share, compared to GAAP net loss of $(9.8) million, or $(0.18) per
diluted share, for the twelve months ended December 31, 2020.
- Non-GAAP net income* in the range
of $104.8 million to $112.7 million, or $1.84 to $1.98 per diluted
share, compared to non-GAAP net income* of $93.3 million, or $1.65
per diluted share, for the twelve months ended December 31,
2020.
Merit’s financial guidance for the year
ending December 31, 2021 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
(conference ID 8889508) today, Wednesday, February 24, 2021, 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)
|
|
|
|
|
|
|
|
|
December 31, |
|
|
|
|
|
2020 |
|
December 31, |
|
|
(Unaudited) |
|
2019 |
ASSETS |
|
|
|
|
|
|
Current Assets |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
56,916 |
|
|
$ |
44,320 |
|
Trade receivables, net |
|
|
146,641 |
|
|
|
155,365 |
|
Other receivables |
|
|
7,774 |
|
|
|
10,016 |
|
Inventories |
|
|
198,019 |
|
|
|
225,698 |
|
Prepaid expenses and other assets |
|
|
13,120 |
|
|
|
12,497 |
|
Prepaid income taxes |
|
|
3,688 |
|
|
|
3,491 |
|
Income tax refund receivables |
|
|
3,549 |
|
|
|
3,151 |
|
Total current assets |
|
|
429,707 |
|
|
|
454,538 |
|
|
|
|
|
|
|
|
Property and equipment,
net |
|
|
382,728 |
|
|
|
378,785 |
|
Intangible assets, net |
|
|
367,915 |
|
|
|
445,312 |
|
Goodwill |
|
|
363,533 |
|
|
|
353,193 |
|
Deferred income tax
assets |
|
|
4,597 |
|
|
|
3,788 |
|
Operating lease right-of-use
assets |
|
|
78,240 |
|
|
|
80,244 |
|
Other assets |
|
|
37,676 |
|
|
|
41,461 |
|
Total Assets |
|
$ |
1,664,396 |
|
|
$ |
1,757,321 |
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
Current Liabilities |
|
|
|
|
|
|
Trade payables |
|
$ |
49,837 |
|
|
$ |
54,623 |
|
Accrued expenses |
|
|
111,944 |
|
|
|
105,184 |
|
Current portion of long-term debt |
|
|
7,500 |
|
|
|
7,500 |
|
Current operating lease liabilities |
|
|
12,903 |
|
|
|
11,550 |
|
Income taxes payable |
|
|
2,820 |
|
|
|
2,799 |
|
Total current liabilities |
|
|
185,004 |
|
|
|
181,656 |
|
|
|
|
|
|
|
|
Long-term debt |
|
|
343,722 |
|
|
|
431,984 |
|
Deferred income tax
liabilities |
|
|
33,312 |
|
|
|
45,236 |
|
Long-term income taxes
payable |
|
|
347 |
|
|
|
347 |
|
Liabilities related to
unrecognized tax benefits |
|
|
1,016 |
|
|
|
1,990 |
|
Deferred compensation
payable |
|
|
16,808 |
|
|
|
14,855 |
|
Deferred credits |
|
|
1,923 |
|
|
|
2,122 |
|
Long-term operating lease
liabilities |
|
|
70,941 |
|
|
|
72,714 |
|
Other long-term
obligations |
|
|
52,748 |
|
|
|
56,473 |
|
Total liabilities |
|
|
705,821 |
|
|
|
807,377 |
|
|
|
|
|
|
|
|
Stockholders' Equity |
|
|
|
|
|
|
Common stock |
|
|
606,224 |
|
|
|
587,017 |
|
Retained earnings |
|
|
357,803 |
|
|
|
368,221 |
|
Accumulated other comprehensive loss |
|
|
(5,452 |
) |
|
|
(5,294 |
) |
Total stockholders' equity |
|
|
958,575 |
|
|
|
949,944 |
|
Total Liabilities and
Stockholders' Equity |
|
$ |
1,664,396 |
|
|
$ |
1,757,321 |
|
CONSOLIDATED STATEMENTS OF INCOME
(LOSS)(Unaudited, in thousands except per share
amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Year Ended |
|
|
December 31, |
|
December 31, |
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
NET SALES |
|
$ |
258,004 |
|
|
$ |
257,922 |
|
|
$ |
963,875 |
|
|
$ |
994,852 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COST OF SALES |
|
|
146,841 |
|
|
|
146,292 |
|
|
|
562,698 |
|
|
|
562,486 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GROSS PROFIT |
|
|
111,163 |
|
|
|
111,630 |
|
|
|
401,177 |
|
|
|
432,366 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING EXPENSES: |
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative |
|
|
79,934 |
|
|
|
82,090 |
|
|
|
297,724 |
|
|
|
327,274 |
|
Research and development |
|
|
15,133 |
|
|
|
16,254 |
|
|
|
57,537 |
|
|
|
65,615 |
|
Legal settlement |
|
|
484 |
|
|
|
— |
|
|
|
18,684 |
|
|
|
— |
|
Impairment charges |
|
|
8,199 |
|
|
|
20,500 |
|
|
|
36,504 |
|
|
|
23,750 |
|
Contingent consideration (benefit) |
|
|
(8,844 |
) |
|
|
(3,805 |
) |
|
|
(7,960 |
) |
|
|
(232 |
) |
Acquired in-process research and development |
|
|
250 |
|
|
|
— |
|
|
|
250 |
|
|
|
525 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses |
|
|
95,156 |
|
|
|
115,039 |
|
|
|
402,739 |
|
|
|
416,932 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME (LOSS) FROM
OPERATIONS |
|
|
16,007 |
|
|
|
(3,409 |
) |
|
|
(1,562 |
) |
|
|
15,434 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER INCOME (EXPENSE): |
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
|
|
370 |
|
|
|
(1,317 |
) |
|
|
604 |
|
|
|
(291 |
) |
Interest expense |
|
|
(1,938 |
) |
|
|
(3,120 |
) |
|
|
(9,994 |
) |
|
|
(12,413 |
) |
Other expense - net |
|
|
(1,194 |
) |
|
|
(116 |
) |
|
|
(2,279 |
) |
|
|
(537 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total other expense — net |
|
|
(2,762 |
) |
|
|
(4,553 |
) |
|
|
(11,669 |
) |
|
|
(13,241 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME (LOSS) BEFORE INCOME
TAXES |
|
|
13,245 |
|
|
|
(7,962 |
) |
|
|
(13,231 |
) |
|
|
2,193 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME TAX (BENEFIT) |
|
|
(2,133 |
) |
|
|
(3,757 |
) |
|
|
(3,388 |
) |
|
|
(3,258 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INCOME (LOSS) |
|
$ |
15,378 |
|
|
$ |
(4,205 |
) |
|
$ |
(9,843 |
) |
|
$ |
5,451 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EARNINGS (LOSS) PER COMMON
SHARE: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.28 |
|
|
$ |
(0.08 |
) |
|
$ |
(0.18 |
) |
|
$ |
0.10 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted |
|
$ |
0.27 |
|
|
$ |
(0.08 |
) |
|
$ |
(0.18 |
) |
|
$ |
0.10 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE SHARES
OUTSTANDING: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
55,577 |
|
|
|
55,210 |
|
|
|
55,434 |
|
|
|
55,075 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted |
|
|
56,736 |
|
|
|
55,210 |
|
|
|
55,434 |
|
|
|
56,235 |
|
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,
- core revenue on
a constant currency basis,
- non-GAAP gross
margin,
- non-GAAP
operating 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 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 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 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 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. The constant currency revenue adjustments of
($3.0) million and $1.3 million to reported revenue and to core
revenue for the three and twelve-month periods ended December 31,
2020, respectively, were calculated using the applicable average
foreign exchange rates for the three and twelve-month periods ended
December 31, 2019, respectively.
Core Revenue and Core Revenue on a Constant Currency
Basis
Merit’s core revenue is defined, with respect to
prior fiscal year periods, as GAAP revenue less revenue from
certain dispositions. For the three and twelve-month periods ended
December 31, 2019, Merit’s core revenue excludes revenues
attributable to the disposition of the assets related to the
manufacturing of Merit’s HypotubeTM product in August 2020
(excluded September 2019 to December 2019).
With respect to current fiscal year periods,
core revenue is defined as GAAP revenue, less revenue from certain
acquisitions. For the three and twelve-month periods ended December
31, 2020, Merit’s core revenue excludes revenues attributable to
the acquisition of (1) Brightwater Medical, Inc. in June 2019
(excluded through May 2020 only), (2) Fibrovein Holdings Limited in
August 2019 (excluded through July 2020 only) and (3) KA Medical,
LLC in November 2020. Core revenue on a constant currency basis is
defined as core revenue (as described above) adjusted to eliminate
the foreign exchange impact related to that core revenue for the
relevant period, using the applicable average foreign exchange
rates in effect for the comparable prior-year periods presented,
and includes adjustments for the effects of hedging transactions on
reported revenue, which are recorded in the U.S.
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, 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 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, 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 calculated in accordance with GAAP, as set forth 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 twelve-month periods ended December 31, 2020 and
2019. The non-GAAP income adjustments referenced in the following
tables do not reflect non-performance-based stock compensation
expense of approximately $3.0 million and $2.5 million for the
three-month periods ended December 31, 2020 and 2019,
respectively, and approximately $10.6 million and $9.4 million for
the twelve-month periods ended December 31, 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 |
|
|
December 31, 2020 |
|
|
Pre-Tax |
|
Tax Impact |
|
After-Tax |
|
Per Share Impact |
GAAP net income |
|
$ |
13,245 |
|
|
$ |
2,133 |
|
|
$ |
15,378 |
|
|
$ |
0.27 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
Cost of Sales |
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of intangibles |
|
|
12,543 |
|
|
|
(3,233 |
) |
|
|
9,310 |
|
|
|
0.16 |
|
Inventory write-off (a) |
|
|
(24 |
) |
|
|
7 |
|
|
|
(17 |
) |
|
|
(0.00 |
) |
Inventory mark-up related to acquisitions |
|
|
4 |
|
|
|
(1 |
) |
|
|
3 |
|
|
|
0.00 |
|
Operating Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
Contingent consideration benefit |
|
|
(8,844 |
) |
|
|
(93 |
) |
|
|
(8,937 |
) |
|
|
(0.16 |
) |
Impairment charges |
|
|
8,199 |
|
|
|
(2,751 |
) |
|
|
5,448 |
|
|
|
0.10 |
|
Amortization of intangibles |
|
|
1,893 |
|
|
|
(508 |
) |
|
|
1,385 |
|
|
|
0.02 |
|
Performance-based share-based compensation (b) |
|
|
1,112 |
|
|
|
(141 |
) |
|
|
971 |
|
|
|
0.02 |
|
Corporate transformation and restructuring (c) |
|
|
7,890 |
|
|
|
(1,985 |
) |
|
|
5,905 |
|
|
|
0.10 |
|
Acquisition-related |
|
|
393 |
|
|
|
(101 |
) |
|
|
292 |
|
|
|
0.01 |
|
Medical Device Regulation expenses (d) |
|
|
365 |
|
|
|
(98 |
) |
|
|
267 |
|
|
|
0.00 |
|
Other (e) |
|
|
962 |
|
|
|
(304 |
) |
|
|
658 |
|
|
|
0.01 |
|
Other (Income) Expense |
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of long-term debt issuance costs |
|
|
151 |
|
|
|
(39 |
) |
|
|
112 |
|
|
|
0.00 |
|
Gain on disposal of business unit |
|
|
(10 |
) |
|
|
2 |
|
|
|
(8 |
) |
|
|
(0.00 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net income |
|
$ |
37,879 |
|
|
$ |
(7,112 |
) |
|
$ |
30,767 |
|
|
$ |
0.54 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted shares |
|
|
|
|
|
|
|
|
|
|
|
56,736 |
|
|
|
Three Months Ended |
|
|
December 31, 2019 |
|
|
Pre-Tax |
|
Tax Impact |
|
After-Tax |
|
Per Share Impact |
GAAP net loss |
|
$ |
(7,962 |
) |
|
$ |
3,757 |
|
|
$ |
(4,205 |
) |
|
$ |
(0.08 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
Cost of Sales |
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of intangibles |
|
|
12,825 |
|
|
|
(3,285 |
) |
|
|
9,540 |
|
|
|
0.17 |
|
Inventory mark-up related to acquisitions |
|
|
183 |
|
|
|
(47 |
) |
|
|
136 |
|
|
|
0.00 |
|
Operating Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
Contingent consideration benefit |
|
|
(3,805 |
) |
|
|
(702 |
) |
|
|
(4,507 |
) |
|
|
(0.08 |
) |
Impairment charges |
|
|
20,500 |
|
|
|
(5,277 |
) |
|
|
15,223 |
|
|
|
0.27 |
|
Amortization of intangibles |
|
|
2,675 |
|
|
|
229 |
|
|
|
2,904 |
|
|
|
0.06 |
|
Corporate transformation and restructuring (c) |
|
|
1,420 |
|
|
|
(369 |
) |
|
|
1,051 |
|
|
|
0.02 |
|
Acquisition-related |
|
|
600 |
|
|
|
(154 |
) |
|
|
446 |
|
|
|
0.01 |
|
Medical Device Regulation expenses (d) |
|
|
366 |
|
|
|
(47 |
) |
|
|
319 |
|
|
|
0.01 |
|
Other (e) |
|
|
1,476 |
|
|
|
(380 |
) |
|
|
1,096 |
|
|
|
0.02 |
|
Other (Income) Expense |
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of long-term debt issuance costs |
|
|
151 |
|
|
|
(39 |
) |
|
|
112 |
|
|
|
0.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net income |
|
$ |
28,429 |
|
|
$ |
(6,314 |
) |
|
$ |
22,115 |
|
|
$ |
0.40 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted shares (f) |
|
|
|
|
|
|
|
|
|
|
|
55,761 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note: Certain per share
impacts may not sum to totals due to rounding |
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of GAAP Net Income (Loss) to
Non-GAAP Net Income(Unaudited, in thousands except per
share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended |
|
|
December 31, 2020 |
|
|
Pre-Tax |
|
Tax Impact |
|
After-Tax |
|
Per Share Impact |
GAAP net loss |
|
$ |
(13,231 |
) |
|
$ |
3,388 |
|
|
$ |
(9,843 |
) |
|
$ |
(0.18 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
Cost of Sales |
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of intangibles |
|
|
50,696 |
|
|
|
(13,065 |
) |
|
|
37,631 |
|
|
|
0.67 |
|
Inventory write-off (a) |
|
|
1,752 |
|
|
|
(465 |
) |
|
|
1,287 |
|
|
|
0.02 |
|
Inventory mark-up related to acquisitions |
|
|
191 |
|
|
|
(49 |
) |
|
|
142 |
|
|
|
0.00 |
|
Operating Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
Contingent consideration benefit |
|
|
(7,960 |
) |
|
|
466 |
|
|
|
(7,494 |
) |
|
|
(0.13 |
) |
Impairment charges |
|
|
36,504 |
|
|
|
(7,115 |
) |
|
|
29,389 |
|
|
|
0.52 |
|
Amortization of intangibles |
|
|
7,943 |
|
|
|
(2,141 |
) |
|
|
5,802 |
|
|
|
0.10 |
|
Performance-based share-based compensation (b) |
|
|
3,735 |
|
|
|
(475 |
) |
|
|
3,260 |
|
|
|
0.06 |
|
Corporate transformation and restructuring (c) |
|
|
14,105 |
|
|
|
(3,683 |
) |
|
|
10,422 |
|
|
|
0.18 |
|
Acquisition-related |
|
|
1,299 |
|
|
|
(334 |
) |
|
|
965 |
|
|
|
0.02 |
|
Medical Device Regulation expenses (d) |
|
|
1,379 |
|
|
|
(359 |
) |
|
|
1,020 |
|
|
|
0.02 |
|
Other (e) |
|
|
24,438 |
|
|
|
(3,815 |
) |
|
|
20,623 |
|
|
|
0.37 |
|
Other (Income) Expense |
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of long-term debt issuance costs |
|
|
604 |
|
|
|
(155 |
) |
|
|
449 |
|
|
|
0.01 |
|
Gain on disposal of business unit |
|
|
(517 |
) |
|
|
133 |
|
|
|
(384 |
) |
|
|
(0.01 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net income |
|
$ |
120,938 |
|
|
$ |
(27,669 |
) |
|
$ |
93,269 |
|
|
$ |
1.65 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted shares (f) |
|
|
|
|
|
|
|
|
|
|
|
56,374 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended |
|
|
December 31, 2019 |
|
|
Pre-Tax |
|
Tax Impact |
|
After-Tax |
|
Per Share Impact |
GAAP net income |
|
$ |
2,193 |
|
|
$ |
3,258 |
|
|
$ |
5,451 |
|
|
$ |
0.10 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
Cost of Sales |
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of intangibles |
|
|
49,707 |
|
|
|
(12,730 |
) |
|
|
36,977 |
|
|
|
0.66 |
|
Inventory mark-up related to acquisitions |
|
|
1,122 |
|
|
|
(289 |
) |
|
|
833 |
|
|
|
0.01 |
|
Operating Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
Contingent consideration benefit |
|
|
(232 |
) |
|
|
(47 |
) |
|
|
(279 |
) |
|
|
(0.00 |
) |
Impairment charges |
|
|
23,750 |
|
|
|
(6,113 |
) |
|
|
17,637 |
|
|
|
0.31 |
|
Amortization of intangibles |
|
|
10,964 |
|
|
|
(2,884 |
) |
|
|
8,080 |
|
|
|
0.14 |
|
Corporate transformation and restructuring (c) |
|
|
5,551 |
|
|
|
(1,433 |
) |
|
|
4,118 |
|
|
|
0.07 |
|
Acquisition-related |
|
|
3,497 |
|
|
|
(743 |
) |
|
|
2,754 |
|
|
|
0.05 |
|
Medical Device Regulation expenses (d) |
|
|
562 |
|
|
|
(98 |
) |
|
|
464 |
|
|
|
0.01 |
|
Other (e) |
|
|
7,282 |
|
|
|
(1,874 |
) |
|
|
5,408 |
|
|
|
0.10 |
|
Other (Income) Expense |
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of long-term debt issuance costs |
|
|
821 |
|
|
|
(211 |
) |
|
|
610 |
|
|
|
0.01 |
|
Tax expense related to restructuring (g) |
|
|
— |
|
|
|
93 |
|
|
|
93 |
|
|
|
0.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net income |
|
$ |
105,217 |
|
|
$ |
(23,071 |
) |
|
$ |
82,146 |
|
|
$ |
1.46 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted shares |
|
|
|
|
|
|
|
|
|
|
|
56,235 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note: Certain per share
impacts may not sum to totals due to rounding |
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Reported Operating Income (Loss) to
Non-GAAP Operating Income
(Unaudited, in thousands except percentages)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Three Months Ended |
|
Year Ended |
|
Year Ended |
|
|
December 31, 2020 |
|
December 31, 2019 |
|
December 31, 2020 |
|
December 31, 2019 |
|
|
Amounts |
|
% Sales |
|
Amounts |
|
% Sales |
|
Amounts |
|
% Sales |
|
Amounts |
|
% Sales |
Net Sales as Reported |
|
$ |
258,004 |
|
|
|
|
|
$ |
257,922 |
|
|
|
|
|
$ |
963,875 |
|
|
|
|
|
$ |
994,852 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Operating Income
(Loss) |
|
|
16,007 |
|
|
6.2 |
% |
|
|
(3,409 |
) |
|
(1.3 |
)% |
|
|
(1,562 |
) |
|
(0.2 |
)% |
|
|
15,434 |
|
|
1.6 |
% |
Cost of Sales |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of intangibles |
|
|
12,543 |
|
|
4.9 |
% |
|
|
12,825 |
|
|
5.0 |
% |
|
|
50,696 |
|
|
5.3 |
% |
|
|
49,707 |
|
|
5.0 |
% |
Inventory write-off (a) |
|
|
(24 |
) |
|
(0.0 |
)% |
|
|
— |
|
|
— |
|
|
|
1,752 |
|
|
0.2 |
% |
|
|
— |
|
|
— |
|
Inventory mark-up related to acquisitions |
|
|
4 |
|
|
0.0 |
% |
|
|
183 |
|
|
0.1 |
% |
|
|
191 |
|
|
0.0 |
% |
|
|
1,122 |
|
|
0.1 |
% |
Operating Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contingent consideration benefit |
|
|
(8,844 |
) |
|
(3.4 |
)% |
|
|
(3,805 |
) |
|
(1.5 |
)% |
|
|
(7,960 |
) |
|
(0.8 |
)% |
|
|
(232 |
) |
|
(0.0 |
)% |
Impairment charges |
|
|
8,199 |
|
|
3.2 |
% |
|
|
20,500 |
|
|
7.9 |
% |
|
|
36,504 |
|
|
3.8 |
% |
|
|
23,750 |
|
|
2.4 |
% |
Amortization of intangibles |
|
|
1,893 |
|
|
0.7 |
% |
|
|
2,675 |
|
|
1.0 |
% |
|
|
7,943 |
|
|
0.8 |
% |
|
|
10,964 |
|
|
1.1 |
% |
Performance-based share-based compensation (b) |
|
|
1,112 |
|
|
0.4 |
% |
|
|
— |
|
|
— |
|
|
|
3,735 |
|
|
0.4 |
% |
|
|
— |
|
|
— |
|
Corporate transformation and restructuring (c) |
|
|
7,890 |
|
|
3.1 |
% |
|
|
1,420 |
|
|
0.6 |
% |
|
|
14,105 |
|
|
1.5 |
% |
|
|
5,551 |
|
|
0.6 |
% |
Acquisition-related |
|
|
393 |
|
|
0.2 |
% |
|
|
600 |
|
|
0.2 |
% |
|
|
1,299 |
|
|
0.1 |
% |
|
|
3,497 |
|
|
0.4 |
% |
Medical Device Regulation expenses (d) |
|
|
365 |
|
|
0.1 |
% |
|
|
366 |
|
|
0.1 |
% |
|
|
1,379 |
|
|
0.1 |
% |
|
|
562 |
|
|
0.1 |
% |
Other (e) |
|
|
962 |
|
|
0.4 |
% |
|
|
1,476 |
|
|
0.6 |
% |
|
|
24,438 |
|
|
2.5 |
% |
|
|
7,282 |
|
|
0.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Operating Income |
|
$ |
40,500 |
|
|
15.7 |
% |
|
$ |
32,831 |
|
|
12.7 |
% |
|
$ |
132,520 |
|
|
13.7 |
% |
|
$ |
117,637 |
|
|
11.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note: Certain percentages may not sum to totals due to
rounding
- Represents write-off of inventory related to the closure of
the ITL Healthcare Pty Ltd. (“ITL”) procedure pack operations
in Australia and suspension of Merit’s distribution agreement with
NinePoint Medical, Inc.
- Represents performance-based share-based compensation expense,
including stock-settled and cash-settled awards.
- Includes severance related to corporate initiatives, write-offs
and valuation adjustments of other long-term assets associated with
restructuring activities, expenses related to Merit’s Foundations
for Growth program, and other transformation costs.
- Represents incremental expenses incurred to comply with the
Medical Device Regulation (“MDR”) in Europe.
- Represents expense from acquired in-process research and
development, charges related to abandoned patents, costs incurred
in responding to an inquiry from the U.S. Department of Justice
(“DOJ”), and, in 2020 only, fees associated with settlement of a
shareholder dispute and $18.7 million of settlement costs related
to the DOJ inquiry.
- For the twelve-month period ended December 31, 2020 and the
three-month period ended December 31, 2019, the non-GAAP net income
per diluted share calculation includes approximately 940,000 and
551,000 shares, respectively, that were excluded from the GAAP net
income (loss) per diluted share calculation.
- 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 |
|
|
|
Year Ended |
|
|
|
|
December 31, |
|
|
|
December 31, |
|
|
% Change |
|
2020 |
|
|
2019 |
|
% Change |
|
2020 |
|
2019 |
Reported Revenue |
|
0.0 |
% |
|
$ |
258,004 |
|
|
$ |
257,922 |
|
(3.1 |
)% |
|
$ |
963,875 |
|
$ |
994,852 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Add: Impact of foreign
exchange (a) |
|
|
|
|
(2,981 |
) |
|
|
— |
|
|
|
|
1,308 |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Constant Currency Revenue |
|
(1.1 |
)% |
|
$ |
255,023 |
|
|
$ |
257,922 |
|
(3.0 |
)% |
|
$ |
965,183 |
|
$ |
994,852 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
Year Ended |
|
|
|
|
December 31, |
|
|
|
December 31, |
|
|
% Change |
|
2020 |
|
|
2019 |
|
|
% Change |
|
2020 |
|
|
2019 |
|
Reported Revenue |
|
0.0 |
% |
|
$ |
258,004 |
|
|
$ |
257,922 |
|
|
(3.1 |
)% |
|
$ |
963,875 |
|
|
$ |
994,852 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: Revenue from certain
acquisitions and dispositions (b) |
|
|
|
|
(12 |
) |
|
|
(298 |
) |
|
|
|
|
(1,229 |
) |
|
|
(433 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core Revenue |
|
0.1 |
% |
|
$ |
257,992 |
|
|
$ |
257,624 |
|
|
(3.2 |
)% |
|
$ |
962,646 |
|
|
$ |
994,419 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Add: Impact of foreign
exchange (a) |
|
|
|
|
(2,981 |
) |
|
|
— |
|
|
|
|
|
1,308 |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core Revenue on a Constant
Currency Basis |
|
(1.0 |
) |
% |
$ |
255,011 |
|
|
$ |
257,624 |
|
|
(3.1 |
) |
% |
$ |
963,954 |
|
|
$ |
994,419 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- The constant currency revenue adjustments of ($3.0) million and
$1.3 million to reported revenue and to core revenue for the three
and twelve-month periods ended December 31, 2020, respectively,
were calculated using the applicable average foreign exchange rates
for the three and twelve-month periods ended December 31, 2019,
respectively, and include adjustments for the effects of hedging
transactions on reported revenue, which are recorded in the
U.S.
- Merit’s core revenue is defined with respect to prior fiscal
year periods, as GAAP revenue, less revenue from certain
dispositions. For the three and twelve-month periods ended December
31, 2019, Merit’s core revenue excludes revenues attributable to
the disposition of assets related to the manufacturing of Merit’s
Hypotube products in August 2020 (excluded September 2019 to
December 2019). With respect to current fiscal year periods, core
revenue is defined as GAAP revenue, less revenue from certain
acquisitions. For the three and twelve-month periods ended December
31, 2020, Merit’s core revenue excludes revenues attributable to
the acquisition of (1) Brightwater Medical, Inc. in June 2019
(excluded through May 2020 only), (2) Fibrovein Holdings Limited in
August 2019 (excluded through July 2020 only) and (3) KA Medical,
LLC in November 2020. Core revenue on a constant currency basis is
defined as core revenue (as described above) adjusted to eliminate
the foreign exchange impact related to that core revenue for the
relevant period, using the applicable average foreign exchange
rates in effect for the comparable prior-year periods presented,
and includes adjustments for the effects of hedging transactions on
reported revenue, which are recorded in the U.S.
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, |
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
Reported Gross Margin |
|
43.1 |
% |
|
43.3 |
% |
|
41.6 |
% |
|
43.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Add back impact of: |
|
|
|
|
|
|
|
|
|
|
|
Amortization of intangibles |
|
4.9 |
% |
|
5.0 |
% |
|
5.3 |
% |
|
5.0 |
% |
Inventory write-off (a) |
|
(0.0 |
)% |
|
— |
|
|
0.2 |
% |
|
— |
|
Inventory mark-up related to acquisitions |
|
0.0 |
% |
|
0.0 |
% |
|
0.0 |
% |
|
0.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Gross Margin |
|
47.9 |
% |
|
48.3 |
% |
|
47.1 |
% |
|
48.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Note: Certain percentages may not sum to totals due to
rounding
- Represents write-off of inventory related to the closure of
the ITL procedure pack operations in Australia and suspension
of Merit’s distribution agreement with NinePoint Medical, Inc.
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 500
individuals. Merit employs approximately 6,000 people
worldwide with facilities in South Jordan, Utah; Pearland, Texas;
Richmond, Virginia; 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.
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, net sales, net income or loss
(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
COVID-19 pandemic and the potential for recovery from that
pandemic, consolidation of Merit’s facilities or other expense
reduction initiatives, future growth and profit expectations or
forecasted economic conditions, or the implementation of, and
results achieved through, Merit’s Foundations for Growth program,
or the development and commercialization of new products 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, 2019 (as
amended by Amendment No. 1 to Annual Report on Form 10-K/A, the
“2019 Annual Report”), Merit’s subsequent Quarterly Reports on Form
10-Q and other filings with the SEC. 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; 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; 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 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. and its subsidiaries in the United
States and other jurisdictions.
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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