EX-99.1 2 a07-13064_1ex99d1.htm EX-99.1

Exhibit 99.1

1600 West Merit Parkway · South Jordan, UT  84095
Telephone:  801-253-1600 · Fax:  801-253-1688

PRESSRELEASE

 

FOR IMMEDIATE RELEASE

Date:                                                                   May 2, 2007

Contact:                                                  Anne-Marie Wright, Vice President, Corporate Communications

Phone:                                                          (801) 208-4167  e-mail: awright@merit.com  Fax: (801) 253-1688

 

MERIT MEDICAL ANNOUNCES INCREASED SALES
AND IMPROVED EARNINGS

SOUTH JORDAN, UTAH— Merit Medical Systems, Inc. (NASDAQ: MMSI), a leading manufacturer and marketer of proprietary disposable devices used primarily in cardiology and radiology procedures, today announced revenues of $51.0 million for the first quarter ended March 31, 2007, an increase of 13.3% over revenues of $45.0 million for the first quarter of 2006.

Net income for the first quarter of 2007 improved 24% to $3.0 million, or $0.10 per share, from $2.4 million, or $0.09 per share, for the first quarter of 2006.

“We are pleased with our sales performance for the first quarter, especially following the 19% increase for the fourth quarter of 2006,” said Fred P. Lampropoulos, Merit’s Chairman and CEO.  “We are also pleased to see the improvement in earnings, which was our first sequential improvement in 11 quarters.”

“Parts of our company improvement plan are starting to take effect,” Lampropoulos continued.  “If we exclude the $800,000 of inventory we acquired from Datascope, our inventory for the first quarter of 2007 would have dropped approximately $400,000 from the fourth quarter of 2006, which is the first inventory reduction in almost four years.  We expect continued improvement in inventories and gross margins as we become more efficient through cost savings programs from automation and the movement of high-labor products to offshore contract manufacturing.”

“Additionally, we expect to introduce several new, high-margin product lines in the next few months,” Lampropoulos added.  “The new ‘Meritized’ version of the acquired




chronic dialysis catheter has been designed to include all the products necessary for initial or exchange procedures, including several of Merit’s patented products.”

All product categories of Merit’s business contributed to revenue growth in the first quarter of 2007, with stand-alone device sales increasing 20%; catheter sales rising 18%; custom kit and tray sales growing 18%; and inflation device sales increasing 1%.

Gross margins for the first quarter of 2007 were 37.0% of sales, compared to 37.9% of sales for the first quarter of 2006.  The decrease in gross margins for the first quarter of 2007 can be attributed primarily to an increase in wages beginning in the fourth quarter of 2006, additional headcount, higher health benefit costs, and increases in depreciation of new production equipment.

Selling, general and administrative expenses for the first quarter of 2007 were 23.5% of sales, compared to 25.0% of sales for the first quarter of 2006.  Research and development costs during both the first quarter of 2007 and the first quarter of 2006 were 4.6% of sales.

Income from operations for the quarter ended March 31, 2007 was $4.5 million, compared to $3.7 million for same period in 2006.

Merit’s effective tax rate for the first quarter of 2007 was 35.0%, compared with 36.0% for comparable period of 2006.

The Company’s cash position was $9.6 million on March 31, 2007, compared with $9.8 million on December 31, 2006.  The Company’s current cash position is net of a recent $3.0 million acquisition of a new dialysis catheter from Datascope.

CONFERENCE CALL

Merit Medical invites all interested parties to participate in its conference call today, May 2, at 5:00 p.m. Eastern (4:00 p.m. Central, 3:00 p.m. Mountain, and 2:00 p.m. Pacific).  The domestic phone number is 800-257-7087, and the international number is 303-262-2125.  A live webcast as well as a rebroadcast can be accessed through the webcast tab of the Investors page at www.merit.com or through the webcasts tab at www.fulldisclosure.com.




INCOME STATEMENT
(Unaudited, in thousands except per share data)

 

 

Three Months Ended

 

 

 

March 31,

 

 

 

2007

 

2006

 

 

 

 

 

 

 

SALES

 

$

51,030

 

$

45,040

 

 

 

 

 

 

 

COST OF SALES

 

32,172

 

27,990

 

 

 

 

 

 

 

GROSS PROFIT

 

18,858

 

17,050

 

 

 

 

 

 

 

OPERATING EXPENSES

 

 

 

 

 

Selling, general and administrative

 

12,015

 

11,238

 

Research and development

 

2,364

 

2,078

 

Total

 

14,379

 

13,316

 

 

 

 

 

 

 

INCOME FROM OPERATIONS

 

4,479

 

3,734

 

 

 

 

 

 

 

OTHER INCOME (EXPENSE)

 

 

 

 

 

Interest income

 

89

 

46

 

Other income (expense)

 

(1

)

(28

)

Total Other Income - net

 

88

 

18

 

 

 

 

 

 

 

INCOME BEFORE INCOME TAXES

 

4,567

 

3,752

 

 

 

 

 

 

 

INCOME TAX EXPENSE

 

1,598

 

1,351

 

 

 

 

 

 

 

NET INCOME

 

$

2,969

 

$

2,401

 

 

 

 

 

 

 

EARNINGS PER COMMON SHARE-

 

 

 

 

 

Basic

 

$

0.11

 

$

0.09

 

 

 

 

 

 

 

Diluted

 

$

0.10

 

$

0.09

 

 

 

 

 

 

 

AVERAGE COMMON SHARES-

 

 

 

 

 

Basic

 

27,652,971

 

27,195,671

 

 

 

 

 

 

 

Diluted

 

28,616,595

 

28,092,099

 

 




BALANCE SHEET
(Unaudited in thousands)

 

 

March 31,

 

December 31,

 

 

 

2007

 

2006

 

ASSETS

 

 

 

 

 

Current Assets

 

 

 

 

 

Cash and cash equivalents

 

$

9,645

 

$

9,838

 

Trade receivables, net

 

25,986

 

25,745

 

Employee receivables

 

183

 

194

 

Other receivables

 

457

 

192

 

Inventories

 

38,960

 

38,562

 

Prepaid expenses and other assets

 

1,241

 

1,031

 

Deferred income tax assets

 

3

 

2

 

Income tax refunds receivable

 

81

 

82

 

Total Current Assets

 

76,556

 

75,646

 

 

 

 

 

 

 

Property and equipment, net

 

95,421

 

92,383

 

Other intangibles, net

 

4,705

 

4,350

 

Goodwill

 

9,684

 

7,541

 

Other assets

 

2,830

 

2,656

 

Deferred income tax assets

 

3

 

2

 

Deposits

 

84

 

90

 

Total Assets

 

$

189,283

 

$

182,668

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

Current Liabilities

 

 

 

 

 

Trade payables

 

11,818

 

10,598

 

Accrued expenses

 

8,684

 

8,464

 

Advances from employees

 

232

 

245

 

Deferred income tax liabilities

 

75

 

190

 

Income taxes payable

 

1,252

 

1,177

 

Total Current Liabilities

 

22,061

 

20,674

 

 

 

 

 

 

 

Deferred income tax liabilities

 

5,467

 

5,469

 

Liabilities related to unrecognized tax positions

 

1,901

 

 

 

Deferred compensation payable

 

2,950

 

2,869

 

Deferred credits

 

2,200

 

2,239

 

Other long-term obligation

 

178

 

205

 

Total Liabilities

 

34,757

 

31,456

 

 

 

 

 

 

 

Stockholders’ Equity

 

 

 

 

 

Common stock

 

55,336

 

54,394

 

Retained earnings

 

99,329

 

96,969

 

Accumulated other comprehensive loss

 

(139

)

(151

)

Total stockholders’ equity

 

154,526

 

151,212

 

 

 

 

 

 

 

Total Liabilities and Stockholders’ Equity

 

$

189,283

 

$

182,668

 

 

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




and diagnostic procedures, particularly in cardiology and radiology.  Merit serves client hospitals worldwide with a domestic and international sales force totaling approximately 85 individuals.  Merit employs approximately 1,750 people worldwide, with facilities in Salt Lake City and South Jordan, Utah; Santa Clara, California; Angleton, Texas; Richmond, Virginia; Maastricht and Venlo, The Netherlands; and Galway, Ireland.

Statements contained in this release, which are not purely historical, are forward-looking statements within the meaning of the Private Securities Litigation 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, 2006.  Such risks and uncertainties include product recalls and product liability claims; infringement of Merit’s technology or the assertion that Merit’s technology infringes the rights of other parties; termination of relationship with suppliers, or failure of suppliers to perform; unable to successfully manage growth through acquisitions; delays in obtaining regulatory approvals, or the failure to maintain such approvals; significant portion of our revenues are derived from a few products and procedures; development of new products and technology that could render Merit’s products obsolete, market acceptance of new products, introduction of products in a timely fashion, price and product competition, availability of labor and materials, cost increases, and fluctuations in and obsolescence of inventory; market price of our common stock has been and may continue to be volatile; foreign currency fluctuations; key personnel; work stoppage or transportation risks; modification or limitation of governmental or private insurance reimbursement, changes in health care markets related to health care reform initiatives; and other factors referred to in the Company’s 10-K and other reports filed with the Securities and Exchange Commission.  All subsequent forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these cautionary statements.  Actual results 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.

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