EX-99.1 2 a09-32291_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:

October 27, 2009

Contact:

Anne-Marie Wright, Vice President, Corporate Communications

Phone:

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

 

MERIT MEDICAL ANNOUNCES RECORD SALES, UP 15%,

AND RECORD EARNINGS, UP 17%,

FOR THE THIRD QUARTER ENDED SEPTEMBER 30, 2009

 

SOUTH JORDAN, UTAH— Merit Medical Systems, Inc. (NASDAQ: MMSI), a leading manufacturer and marketer of proprietary disposable medical devices used in interventional and diagnostic procedures, particularly in cardiology, radiology and gastroenterology, today announced record revenues of $66.8 million for the quarter ended September 30, 2009, an increase of 15% over revenues of $58.2 million for the third quarter of 2008.  Revenues for the nine-month period ended September 30, 2009 were a record $190.0 million, compared with $169.1 million for the comparable nine-month period in 2008, a gain of 12%.

 

Net income for the third quarter ended September 30, 2009 was a record $6.1 million, up 17% to $0.21 per share, compared to $5.2 million, or $0.18 per share, for the comparable quarter of 2008.  Net income for the nine-month period ended September 30, 2009 was a record $17.5 million, up 14% to $0.61 per share, compared to $15.3 million, or $0.54 per share, for the same period of 2008.

 

In the third quarter of 2009, compared to the third quarter of 2008, catheter sales increased 23%; stand-alone device sales rose 13%; custom kit and tray sales grew 12%; and inflation devices sales fell 2% due primarily to decreased deliveries to an OEM

 



 

customer.  Excluding sales to that OEM customer, inflation device sales were up 3% for the third quarter of 2009, relative to the comparable quarter of 2008.

 

For the nine-month period ended September 30, 2009, compared to the nine months ended September 30, 2008, catheter sales increased 23%; custom kit and tray sales grew 13%; stand-alone device sales rose 11%; and inflation device sales fell 4% due primarily to the decreased deliveries to the OEM customer described above.  Excluding sales to that OEM customer, inflation device sales were up 2% for the first nine months of 2009, relative to the comparable nine months of 2008.

 

Gross margins for the third quarter of 2009 were 42.7% of sales, compared to 40.7% of sales for the third quarter of 2008.  Gross margins for the nine-month period ended September 30, 2009 were 42.9% of sales, compared to 41.3% of sales for the comparable period of 2008.

 

The 200 basis-point increase in gross margins for the third quarter of 2009 and the 160-basis point increase for the nine-month period ended September 30, 2009 can be attributed primarily to increased overhead and manufacturing efficiencies resulting from higher production volumes, reduced material costs, and a favorable Euro to dollar exchange rate, which reduced costs in Merit’s facility in Galway, Ireland.

 

Selling, general and administrative expenses for the third quarter of 2009 were 25.1% of sales, compared to 24.6% of sales for the third quarter of 2008.  For the nine-month period ended September 30, 2009, selling, general and administrative expenses were 25.2% of sales, compared with 23.8% of sales for the first nine months of 2008.  The increase can be attributed primarily to the recent acquisition of the former Alveolus business, which is Merit’s new division called Merit Endotek, and the hiring of additional domestic and international sales reps.

 

Research and development costs during the third quarter of 2009 were 4.9% of sales, compared to 3.8% of sales for the third quarter of 2008.  Research and development costs were 4.4% of sales for the first nine months of 2009, compared to 4.0% of sales for the same period of 2008.  These numbers include new R&D expenses associated with the integration and development of the Alveolus business and additional costs related to research and development projects that are nearing completion.

 

2



 

“We are pleased with our overall performance, especially considering the season in which hospitals and physicians generally see slower admissions,” said Fred P. Lampropoulos, Merit’s Chairman and Chief Executive Officer.  “Our strategy for continued growth and profitability are in place, particularly considering the opportunities going forward with the EnSnare®, which will start shipping the first week of January.  Additionally, Merit will release several new products in the fourth quarter.”

 

Income from operations was $8.5 million for the third quarter of 2009, compared to $7.2 million for the third quarter of 2008.  For the nine-month period ended September 30, 2009, income from operations was a record $25.3 million, compared to $22.8 million for the same period of 2008.

 

Merit’s effective tax rate for the third quarter of 2009 was 27.8%, compared with 29.7% for the third quarter of 2008.  For the nine-month period ended September 30, 2009, Merit’s effective tax rate was 31.5%, compared to 34.2% for the same period of 2008.  The decrease in the effective tax rate for the third quarter of 2009 and the nine-month period ended September 30, 2009, compared to the same periods in 2008, can be attributed primarily to higher profits in Merit’s Irish facility, which are taxed at a lower rate than Merit’s domestic profits and Irish research and development tax credits.

 

CONFERENCE CALL

 

Merit Medical invites all interested parties to participate in its conference call today, October 27th, 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 877-941-1465, and the international number is 480-629-9678.  A live webcast as well as a rebroadcast can be accessed through the Investors page at www.merit.com or through the webcasts tab at www.fulldisclosure.com.

 

3



 

INCOME STATEMENT

(Unaudited, in thousands except per share amounts)

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

 

September 30,

 

September 30,

 

 

 

2009

 

2008

 

2009

 

2008

 

 

 

 

 

 

 

 

 

 

 

SALES

 

$

66,759

 

$

58,153

 

$

189,967

 

$

169,147

 

 

 

 

 

 

 

 

 

 

 

COST OF SALES

 

38,224

 

34,469

 

108,481

 

99,369

 

 

 

 

 

 

 

 

 

 

 

GROSS PROFIT

 

28,535

 

23,684

 

81,486

 

69,778

 

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES

 

 

 

 

 

 

 

 

 

Selling, general and administrative

 

16,780

 

14,329

 

47,896

 

40,240

 

Research and development

 

3,292

 

2,186

 

8,264

 

6,756

 

Total

 

20,072

 

16,515

 

56,160

 

46,996

 

 

 

 

 

 

 

 

 

 

 

INCOME FROM OPERATIONS

 

8,463

 

7,169

 

25,326

 

22,782

 

 

 

 

 

 

 

 

 

 

 

OTHER INCOME (EXPENSE)

 

 

 

 

 

 

 

 

 

Interest income

 

14

 

183

 

164

 

495

 

Other income (expense)

 

(43

)

46

 

3

 

25

 

Total other income (expense) - net

 

(29

)

229

 

167

 

520

 

 

 

 

 

 

 

 

 

 

 

INCOME BEFORE INCOME TAX EXPENSE

 

8,434

 

7,398

 

25,493

 

23,302

 

 

 

 

 

 

 

 

 

 

 

INCOME TAX EXPENSE

 

2,349

 

2,198

 

8,030

 

7,967

 

 

 

 

 

 

 

 

 

 

 

NET INCOME

 

$

6,085

 

$

5,200

 

$

17,463

 

$

15,335

 

 

 

 

 

 

 

 

 

 

 

EARNINGS PER SHARE-

 

 

 

 

 

 

 

 

 

Basic

 

$

0.22

 

$

0.19

 

$

0.62

 

$

0.55

 

 

 

 

 

 

 

 

 

 

 

Diluted

 

$

0.21

 

$

0.18

 

$

0.61

 

$

0.54

 

 

 

 

 

 

 

 

 

 

 

AVERAGE COMMON SHARES-

 

 

 

 

 

 

 

 

 

Basic

 

27,970

 

27,900

 

27,983

 

27,669

 

 

 

 

 

 

 

 

 

 

 

Diluted

 

28,690

 

28,812

 

28,555

 

28,482

 

 

4



 

BALANCE SHEET

(Unaudited in thousands)

 

 

 

September 30,

 

December 31,

 

 

 

2009

 

2008

 

ASSETS

 

 

 

 

 

Current Assets

 

 

 

 

 

Cash and cash equivalents

 

$

5,763

 

$

34,030

 

Trade receivables, net

 

31,812

 

27,749

 

Employee receivables

 

171

 

126

 

Other receivables

 

465

 

818

 

Inventories

 

48,036

 

38,358

 

Prepaid expenses and other assets

 

1,832

 

985

 

Deferred income tax assets

 

2,783

 

2,782

 

Income tax refunds receivable

 

667

 

607

 

Total Current Assets

 

91,529

 

105,455

 

 

 

 

 

 

 

Property and equipment, net

 

111,194

 

103,939

 

Other intangibles, net

 

25,899

 

6,913

 

Goodwill

 

32,849

 

13,048

 

Other assets

 

3,030

 

2,325

 

Deferred income tax assets

 

38

 

23

 

Deposits

 

92

 

73

 

 

 

 

 

 

 

Total Assets

 

$

264,631

 

$

231,776

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

Current Liabilities

 

 

 

 

 

Trade payables

 

13,570

 

10,622

 

Other payables

 

7,000

 

 

 

Accrued expenses

 

13,213

 

9,973

 

Advances from employees

 

405

 

211

 

Income taxes payable

 

1,472

 

366

 

Total Current Liabilities

 

35,660

 

21,172

 

 

 

 

 

 

 

Deferred income tax liabilities

 

8,788

 

8,771

 

Liabilities related to unrecognized tax positions

 

2,681

 

2,818

 

Deferred compensation payable

 

3,048

 

2,348

 

Deferred credits

 

1,903

 

1,994

 

Other long-term obligation

 

461

 

368

 

Total Liabilities

 

52,541

 

37,471

 

 

 

 

 

 

 

Stockholders’ Equity

 

 

 

 

 

Common stock

 

62,012

 

61,689

 

Retained earnings

 

150,137

 

132,674

 

Accumulated other comprehensive loss

 

(59

)

(58

)

Total stockholders’ equity

 

212,090

 

194,305

 

 

 

 

 

 

 

Total Liabilities and Stockholders’ Equity

 

$

264,631

 

$

231,776

 

 

5



 

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, radiology and gastroenterology.  Merit serves client hospitals worldwide with a domestic and international sales force totaling approximately 125 individuals.  Merit employs approximately 1,880 people worldwide, with facilities in Salt Lake City and South Jordan, Utah; 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 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, 2008. Such risks and uncertainties include risks relating to: infringement of Merit’s technology or the assertion that Merit’s technology infringes the rights of other parties; downturn of the national economy and its affect on Merit’s revenues, collections and supplier relations; termination of supplier relationships, or failure of suppliers to perform; product recalls and product liability claims; delays in obtaining regulatory approvals, or the failure to maintain such approvals; inability to successfully manage growth through acquisitions, including the inability to commercialize the Vysera technology as currently anticipated; concentration of Merit’s revenues among 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; fluctuations in and obsolescence of inventory; volatility of the market price of Merit’s common stock; foreign currency fluctuations; changes in 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; impact of force majeure events on Merit’s business, including severe weather conditions; failure to comply with applicable environmental laws and other factors referred to in Merit’s Annual Report on Form 10-K for the year ended December 31, 2008, and other reports 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 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.

 

# # #

 

6