EX-99.1 2 a10-4109_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:                                                                    February 18, 2010

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

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

 

MERIT MEDICAL REPORTS RECORD SALES AND EARNINGS

FOR THE YEAR ENDED DECEMBER 31, 2009

 

SOUTH JORDAN, UTAH— Merit Medical Systems, Inc. (NASDAQ: MMSI), a leading manufacturer and marketer of proprietary disposable devices used primarily in cardiology, radiology and gastroenterology, today announced record revenues of $257.5 million for the year ended December 31, 2009, an increase of 13% over revenues of $227.1 million for the year ended December 31, 2008.

 

Earnings for the year ended December 31, 2009 were a record $22.5 million, up 9% compared to $20.7 million for the year ended December 31, 2008.  Earnings per share for the year ended December 31, 2009 were $0.79, up from $0.73 per share for the year ended December 31, 2008.

 

Gross margins improved to 42.3% of sales for the year ended December 31, 2009, compared to 41.1% of sales for the year ended December 31, 2008, an improvement of 120 basis points.

 

Revenues for the fourth quarter of 2009 were a record $67.5 million, compared with revenues of $58.0 million for the quarter of 2008, an increase of 16%.

 

Earnings for the fourth quarter of 2009 were $5.1 million, down 6% compared to $5.4 million for the fourth quarter of 2008.  Earnings per share for the fourth quarter of 2009 were $0.18, down from $0.19 per share for the fourth quarter of 2008.  Earnings for the fourth quarter of 2009 were negatively impacted primarily by the integration and start-up of Merit’s new non-vascular stent division, investments in expanding its direct sales force in the United States and Europe, as well as increased research and development.

 

Gross margins for the fourth quarter of 2009 were 40.5% of sales, which was essentially the same as for the fourth quarter of 2008, but down sequentially from the third quarter of 2009 primarily due to lower production volumes as we reduced inventory levels and shut down for maintenance during the holidays.  This lower production rate also resulted in an $880,000 reduction in inventory from the third quarter of 2009 compared to the fourth quarter of 2009.

 

“Despite the lower gross margins for the fourth quarter of 2009, compared to the third quarter of 2009, we are pleased with the lower inventory levels even though we built first lots to stock for the launch of the EN Snare® foreign body removal device,” said Fred P. Lampropoulos, Merit’s Chairman and Chief Executive Officer.  “We are also pleased that in January 2010 gross margins snapped back to approximately 42.6% and we surpassed our initial forecast of EN Snare® devices by more than 50%.  EN Snare® sales for January 2010 were approximately $623,000.  We are delighted with the execution and launch of the EN Snare® and have raised our forecast of this product by $2.0 million over our initial plan.”

 

“We plan to launch several new products during the first half of 2010, including the patented One Step VOS™, the Merit Laureate™ hydrophilic guide wire, the Impress™ hydrophilic catheter, the ASAP™ thrombus extraction catheter, and the ALIMAXX - B® uncovered metal biliary stent in both the transhepatic and endoscopic versions,” Lampropoulos added.

 



 

For the year ended December 31, 2009, compared to the year ended December 31, 2008, catheter sales rose 23%; stand-alone device sales rose 12%; custom kit and tray sales increased 12%; and inflation device sales fell 1%.  The percentage decline in inflation device sales was due primarily to decreased deliveries to an OEM customer.  Excluding sales to that OEM customer, inflation device sales increased 2% for the year ended December 31, 2009, relative to the year ended December 31, 2008.

 

For the fourth quarter of 2009, compared to the fourth quarter of 2008, catheter sales rose 25%; stand-alone device sales increased 13%; custom kit and tray sales grew 9%; and inflation device sales increased 9% due partially to increased deliveries to the OEM customer described above.  Excluding sales to that OEM customer, inflation device sales were up 4% for the fourth quarter of 2009, compared to the fourth quarter of 2008.

 

Selling, general and administrative expenses were 25.0% and 25.2% of sales for the fourth quarter and year ended December 31, 2009, respectively, compared with 22.2% and 23.4% of sales for the comparable periods of 2008, respectively.

 

Research and development costs were 4.3% of sales for both the fourth quarter and year ended December 31, 2009, compared to 4.1% and 4.0% of sales for the comparable periods of 2008, respectively.

 

Merit’s effective tax rates for the fourth quarter and calendar year 2009 were 33.3% and 31.9%, respectively, compared to 36.9% and 34.9% for the same periods of 2008, respectively.

 

Merit earned $30.1 million in cash from operations for the year ended December 31, 2009, compared to $28.0 million for the year ended December 31, 2008.  Merit’s cash position decreased to $6.1 million on December 31, 2009, compared to $34.0 million on December 31, 2008.  The decreased cash position was due primarily to $21.0 million spent on the acquisition of intellectual property, including patents, certain trademarks and know-how associated with the En Snare® foreign body removal device from Hatch Medical, L.L.C. and $19.0 million spent on the acquisition of assets from Alveolus, Inc., including an intellectual property portfolio, inventory, receivables and manufacturing equipment associated with non-vascular interventional stents used for esophageal, tracheobronchial, and biliary stenting procedures.

 

The financial information presented in this release has not been audited and is subject to adjustment as Merit completes the procedures associated with the audit of its financial statements for the year ended December 31, 2009.  Merit does not presently anticipate those adjustments, if any, to be material.

 

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INCOME STATEMENT

(Unaudited, in thousands except per share amounts)

 

 

 

Three Months Ended

 

Twelve Months Ended

 

 

 

December 31,

 

December 31,

 

 

 

2009

 

2008

 

2009

 

2008

 

 

 

 

 

 

 

 

 

 

 

SALES

 

$

67,495

 

$

57,996

 

$

257,462

 

$

227,143

 

 

 

 

 

 

 

 

 

 

 

COST OF SALES

 

40,179

 

34,503

 

148,660

 

133,872

 

 

 

 

 

 

 

 

 

 

 

GROSS PROFIT

 

27,316

 

23,493

 

108,802

 

93,271

 

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES

 

 

 

 

 

 

 

 

 

Selling, general and administrative

 

16,891

 

12,887

 

64,787

 

53,127

 

Research and development

 

2,904

 

2,404

 

11,168

 

9,160

 

Total

 

19,795

 

15,291

 

75,955

 

62,287

 

 

 

 

 

 

 

 

 

 

 

INCOME FROM OPERATIONS

 

7,521

 

8,202

 

32,847

 

30,984

 

 

 

 

 

 

 

 

 

 

 

OTHER INCOME

 

 

 

 

 

 

 

 

 

Interest income

 

14

 

286

 

178

 

781

 

Other income

 

66

 

55

 

69

 

80

 

Total other income — net

 

80

 

341

 

247

 

861

 

 

 

 

 

 

 

 

 

 

 

INCOME BEFORE INCOME TAX EXPENSE

 

7,601

 

8,543

 

33,094

 

31,845

 

 

 

 

 

 

 

 

 

 

 

INCOME TAX EXPENSE

 

2,534

 

3,151

 

10,564

 

11,118

 

 

 

 

 

 

 

 

 

 

 

NET INCOME

 

$

5,067

 

$

5,392

 

$

22,530

 

$

20,727

 

 

 

 

 

 

 

 

 

 

 

EARNINGS PER SHARE-

 

 

 

 

 

 

 

 

 

Basic

 

$

0.18

 

$

0.19

 

$

0.80

 

$

0.75

 

 

 

 

 

 

 

 

 

 

 

Diluted

 

$

0.18

 

$

0.19

 

$

0.79

 

$

0.73

 

 

 

 

 

 

 

 

 

 

 

AVERAGE COMMON SHARES-

 

 

 

 

 

 

 

 

 

Basic

 

28,091

 

28,070

 

28,011

 

27,769

 

 

 

 

 

 

 

 

 

 

 

Diluted

 

28,761

 

28,750

 

28,606

 

28,550

 

 

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BALANCE SHEET

(Unaudited in thousands)

 

 

 

December 31,

 

December 31,

 

 

 

2009

 

2008

 

ASSETS

 

 

 

 

 

Current Assets

 

 

 

 

 

Cash and cash equivalents

 

$

6,133

 

$

34,030

 

Trade receivables, net

 

30,954

 

27,749

 

Employee receivables

 

145

 

126

 

Other receivables

 

827

 

818

 

Inventories

 

47,170

 

38,358

 

Prepaid expenses and other assets

 

1,801

 

985

 

Deferred income tax assets

 

3,289

 

2,782

 

Income tax refunds receivable

 

835

 

607

 

Total Current Assets

 

91,154

 

105,455

 

 

 

 

 

 

 

Property and equipment, net

 

114,646

 

103,939

 

Other intangibles, net

 

26,898

 

6,913

 

Goodwill

 

33,002

 

13,048

 

Other assets

 

5,813

 

2,325

 

Investment, cost

 

 

 

 

 

Deferred income tax assets

 

 

 

23

 

Deposits

 

 

 

73

 

 

 

 

 

 

 

Total Assets

 

$

271,513

 

$

231,776

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

Current Liabilities

 

 

 

 

 

Trade payables

 

13,352

 

10,622

 

Accrued expenses

 

12,196

 

9,973

 

Advances from employees

 

212

 

211

 

Line of credit

 

7,000

 

 

 

Income taxes payable

 

148

 

366

 

Total Current Liabilities

 

32,908

 

21,172

 

 

 

 

 

 

 

Deferred income tax liabilities

 

11,251

 

8,771

 

Liabilities related to unrecognized tax positions

 

2,945

 

2,818

 

Deferred compensation payable

 

3,382

 

2,348

 

Deferred credits

 

1,874

 

1,994

 

Other long-term obligation

 

344

 

368

 

Total Liabilities

 

52,704

 

37,471

 

 

 

 

 

 

 

Stockholders’ Equity

 

 

 

 

 

Common stock

 

63,690

 

61,689

 

Retained earnings

 

155,204

 

132,674

 

Accumulated other comprehensive loss

 

(85

)

(58

)

Total stockholders’ equity

 

218,809

 

194,305

 

 

 

 

 

 

 

Total Liabilities and Stockholders’ Equity

 

$

271,513

 

$

231,776

 

 

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CONFERENCE CALL

 

Merit invites all interested parties to participate in its fourth quarter and year-end conference call today, February 18th, 2010, 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) 941-0844, and the international number is (480) 629-9645.  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.

 

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, primarily 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: healthcare policy changes which may have a material adverse effect on Merit; 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 effect 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.

 

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