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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Merit Medical Systems Inc | NASDAQ:MMSI | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.29 | 0.34% | 85.78 | 83.82 | 87.45 | 86.10 | 85.20 | 85.68 | 392,539 | 22:13:47 |
|
x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2019
|
|
|
|
OR
|
|
|
|
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
FOR THE TRANSITION PERIOD FROM TO .
|
|
Commission File Number 0-18592
|
Utah
|
|
87-0447695
|
(State or other jurisdiction of incorporation or organization)
|
|
(IRS Employer Identification No.)
|
Title of each class
|
Trading Symbol
|
Name of exchange on which registered
|
Common Stock, no par
|
MMSI
|
NASDAQ Global Select Market
|
Large Accelerated Filer
x
|
Accelerated Filer
o
|
Non-Accelerated Filer
o
|
Smaller Reporting Company
o
|
Emerging Growth Company
o
|
Common Stock
|
|
55,004,915
|
Title or class
|
|
Number of Shares
Outstanding at April 30, 2019
|
|
|
March 31,
|
|
December 31,
|
||||
|
2019
|
|
2018
|
||||
Finished goods
|
$
|
117,112
|
|
|
$
|
117,703
|
|
Work-in-process
|
20,192
|
|
|
14,380
|
|
||
Raw materials
|
61,618
|
|
|
65,453
|
|
||
|
|
|
|
||||
Total Inventories
|
$
|
198,922
|
|
|
$
|
197,536
|
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
Cost of sales
|
$
|
252
|
|
|
$
|
184
|
|
Research and development
|
192
|
|
|
124
|
|
||
Selling, general and administrative
|
1,322
|
|
|
948
|
|
||
Stock-based compensation expense before taxes
|
$
|
1,766
|
|
|
$
|
1,256
|
|
|
Three Months Ended March 31,
|
||
|
2019
|
|
2018
|
Risk-free interest rate
|
2.42% - 2.56%
|
|
2.63%
|
Expected option term
|
3.0 - 5.0 years
|
|
5.0 years
|
Expected dividend yield
|
—
|
|
—
|
Expected price volatility
|
28.93% - 33.69%
|
|
34.32%
|
|
Net
Income
|
|
Shares
|
|
Per Share
Amount
|
|||||
Three-month period ended March 31, 2019:
|
|
|
|
|
|
|
|
|
||
Basic EPS
|
$
|
6,195
|
|
|
54,917
|
|
|
$
|
0.11
|
|
Effect of dilutive stock options
|
|
|
|
1,573
|
|
|
|
|
||
|
|
|
|
|
|
|||||
Diluted EPS
|
$
|
6,195
|
|
|
56,490
|
|
|
$
|
0.11
|
|
|
|
|
|
|
|
|||||
Stock options excluded from the calculation of common stock equivalents as the impact was anti-dilutive
|
|
|
976
|
|
|
|
||||
|
|
|
|
|
|
|||||
Three-month period ended March 31, 2018:
|
|
|
|
|
|
|
|
|
||
Basic EPS
|
$
|
5,269
|
|
|
50,277
|
|
|
$
|
0.10
|
|
Effect of dilutive stock options
|
|
|
|
1,633
|
|
|
|
|
||
|
|
|
|
|
|
|||||
Diluted EPS
|
$
|
5,269
|
|
|
51,910
|
|
|
$
|
0.10
|
|
|
|
|
|
|
|
|||||
Stock options excluded from the calculation of common stock equivalents as the impact was anti-dilutive
|
|
|
184
|
|
|
|
|
Inventories
|
$
|
1,353
|
|
|
Intangibles
|
|
||
|
Developed technology
|
32,750
|
|
|
|
Customer list
|
840
|
|
|
|
Trademarks
|
1,410
|
|
|
|
Goodwill
|
21,847
|
|
|
|
|
|
||
|
Total net assets acquired
|
$
|
58,200
|
|
Assets Acquired
|
|
||
Trade receivables
|
$
|
6,151
|
|
Inventories
|
5,803
|
|
|
Prepaid expenses and other current assets
|
315
|
|
|
Property and equipment
|
1,047
|
|
|
Other long-term assets
|
14
|
|
|
Intangibles
|
|
||
Developed technology
|
134,510
|
|
|
Customer lists
|
3,330
|
|
|
Trademarks
|
7,080
|
|
|
Goodwill
|
65,802
|
|
|
Total assets acquired
|
224,052
|
|
|
|
|
||
Liabilities Assumed
|
|
||
Trade payables
|
(1,497
|
)
|
|
Accrued expenses
|
(2,384
|
)
|
|
Other long-term liabilities
|
(1,527
|
)
|
|
Deferred income tax liabilities
|
(30,363
|
)
|
|
Total liabilities assumed
|
(35,771
|
)
|
|
|
|
||
Total net assets acquired
|
$
|
188,281
|
|
Inventories
|
$
|
971
|
|
Intangibles
|
|
||
Developed technology
|
4,840
|
|
|
Customer list
|
120
|
|
|
Trademarks
|
400
|
|
|
Goodwill
|
938
|
|
|
|
|
||
Total net assets acquired
|
$
|
7,269
|
|
Inventories
|
$
|
5,804
|
|
Property and equipment
|
748
|
|
|
Intangibles
|
|
||
Developed technology
|
74,000
|
|
|
Customer list
|
4,200
|
|
|
Trademarks
|
4,900
|
|
|
In-process technology
|
2,500
|
|
|
Goodwill
|
9,728
|
|
|
|
|
||
Total net assets acquired
|
$
|
101,880
|
|
|
|
Three Months Ended
|
||||||
|
|
March 31, 2018
|
||||||
|
|
As Reported
|
|
Pro Forma
|
||||
Net sales
|
|
$
|
203,035
|
|
|
$
|
222,440
|
|
Net income
|
|
5,269
|
|
|
(2,050
|
)
|
||
Earnings per common share:
|
|
|
|
|
||||
Basic
|
|
$
|
0.10
|
|
|
$
|
(0.04
|
)
|
Diluted
|
|
$
|
0.10
|
|
|
$
|
(0.04
|
)
|
|
Three Months Ended March 31, 2019
|
|
Three Months Ended March 31, 2018
|
||||||||||||||||||||
|
United States
|
|
International
|
|
Total
|
|
United States
|
|
International
|
|
Total
|
||||||||||||
Cardiovascular
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Stand-alone devices
|
$
|
53,400
|
|
|
$
|
42,027
|
|
|
$
|
95,427
|
|
|
$
|
44,010
|
|
|
$
|
39,236
|
|
|
$
|
83,246
|
|
Cianna Medical
|
12,849
|
|
|
—
|
|
|
12,849
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Custom kits and procedure trays
|
22,055
|
|
|
10,888
|
|
|
32,943
|
|
|
22,318
|
|
|
10,954
|
|
|
33,272
|
|
||||||
Inflation devices
|
7,972
|
|
|
14,045
|
|
|
22,017
|
|
|
7,668
|
|
|
14,751
|
|
|
22,419
|
|
||||||
Catheters
|
19,412
|
|
|
23,627
|
|
|
43,039
|
|
|
15,270
|
|
|
18,595
|
|
|
33,865
|
|
||||||
Embolization devices
|
4,706
|
|
|
7,121
|
|
|
11,827
|
|
|
5,033
|
|
|
7,554
|
|
|
12,587
|
|
||||||
CRM/EP
|
10,098
|
|
|
2,280
|
|
|
12,378
|
|
|
8,838
|
|
|
1,628
|
|
|
10,466
|
|
||||||
Total
|
130,492
|
|
|
99,988
|
|
|
230,480
|
|
|
103,137
|
|
|
92,718
|
|
|
195,855
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Endoscopy
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Endoscopy devices
|
7,568
|
|
|
301
|
|
|
7,869
|
|
|
6,918
|
|
|
262
|
|
|
7,180
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total
|
$
|
138,060
|
|
|
$
|
100,289
|
|
|
$
|
238,349
|
|
|
$
|
110,055
|
|
|
$
|
92,980
|
|
|
$
|
203,035
|
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
Net Sales
|
|
|
|
|
|
||
Cardiovascular
|
$
|
230,480
|
|
|
$
|
195,855
|
|
Endoscopy
|
7,869
|
|
|
7,180
|
|
||
Total net sales
|
$
|
238,349
|
|
|
$
|
203,035
|
|
|
|
|
|
||||
Operating Income
|
|
|
|
||||
Cardiovascular
|
7,619
|
|
|
6,397
|
|
||
Endoscopy
|
1,904
|
|
|
2,384
|
|
||
Total operating income
|
9,523
|
|
|
8,781
|
|
||
|
|
|
|
||||
Total other expense - net
|
(2,677
|
)
|
|
(2,422
|
)
|
||
|
|
|
|
||||
Income tax expense
|
651
|
|
|
1,090
|
|
||
|
|
|
|
||||
Net income
|
$
|
6,195
|
|
|
$
|
5,269
|
|
|
|
|
|
|
March 31, 2019
|
|
December 31, 2018
|
||||
2016 Term loan
|
$
|
68,750
|
|
|
$
|
72,500
|
|
2016 Revolving credit loans
|
308,750
|
|
|
316,000
|
|
||
Collateralized debt facility
|
7,000
|
|
|
7,000
|
|
||
Less unamortized debt issuance costs
|
(313
|
)
|
|
(348
|
)
|
||
Total long-term debt
|
384,187
|
|
|
395,152
|
|
||
Less current portion
|
22,000
|
|
|
22,000
|
|
||
Long-term portion
|
$
|
362,187
|
|
|
$
|
373,152
|
|
Years Ending
|
|
Future Minimum
|
||
December 31
|
|
Principal Payments
|
||
Remaining 2019
|
|
$
|
18,250
|
|
2020
|
|
17,500
|
|
|
2021
|
|
348,750
|
|
|
Total future minimum principal payments
|
|
$
|
384,500
|
|
Currency
|
Symbol
|
Forward Notional Amount
|
|
Australian Dollar
|
AUD
|
3,100
|
|
Canadian Dollar
|
CAD
|
3,850
|
|
Swiss Franc
|
CHF
|
2,125
|
|
Chinese Renminbi
|
CNY
|
238,000
|
|
Danish Krone
|
DKK
|
15,725
|
|
Euro
|
EUR
|
18,065
|
|
British Pound
|
GBP
|
4,915
|
|
Japanese Yen
|
JPY
|
1,305,000
|
|
Korean Won
|
KRW
|
3,750,000
|
|
Mexican Peso
|
MXN
|
215,500
|
|
Swedish Krona
|
SEK
|
25,180
|
|
Currency
|
Symbol
|
Forward Notional Amount
|
|
Australian Dollar
|
AUD
|
11,400
|
|
Brazilian Real
|
BRL
|
9,000
|
|
Canadian Dollar
|
CAD
|
1,136
|
|
Swiss Franc
|
CHF
|
500
|
|
Chinese Renminbi
|
CNY
|
50,920
|
|
Danish Krone
|
DKK
|
4,550
|
|
Euro
|
EUR
|
7,293
|
|
British Pound
|
GBP
|
3,350
|
|
Hong Kong Dollar
|
HKD
|
11,000
|
|
Japanese Yen
|
JPY
|
265,000
|
|
Korean Won
|
KRW
|
5,500,000
|
|
Mexican Peso
|
MXN
|
18,000
|
|
Swedish Krona
|
SEK
|
12,000
|
|
Singapore Dollar
|
SGD
|
8,500
|
|
|
Amount of Gain/(Loss) recognized in OCI
|
|
|
Consolidated Statements of Income
|
|
Amount of Gain/(Loss) reclassified from AOCI
|
||||||||||||||||||
|
Three Months Ended March 31,
|
|
|
Three Months Ended March 31,
|
|
Three Months Ended March 31,
|
||||||||||||||||||
|
2019
|
|
2018
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||||||
Derivative instrument
|
|
|
|
Location in statements of income
|
|
|
|
|
||||||||||||||||
Interest rate swaps
|
$
|
(857
|
)
|
|
$
|
2,120
|
|
|
Interest expense
|
$
|
(2,764
|
)
|
|
$
|
(2,398
|
)
|
|
$
|
595
|
|
|
$
|
213
|
|
Foreign currency forward contracts
|
(1,013
|
)
|
|
174
|
|
|
Revenue
|
238,349
|
|
|
203,035
|
|
|
194
|
|
|
(151
|
)
|
||||||
|
|
|
|
|
Cost of sales
|
(133,713
|
)
|
|
(114,979
|
)
|
|
(82
|
)
|
|
241
|
|
|
|
|
|
Three Months Ended March 31,
|
||||||
Derivative Instrument
|
|
Location in statements of income
|
|
2019
|
|
2018
|
||||
Foreign currency forward contracts
|
|
Other expense
|
|
$
|
(266
|
)
|
|
$
|
(1,115
|
)
|
|
|
|
|
Fair Value Measurements Using
|
||||||||||||
|
|
Total Fair
|
|
Quoted prices in
|
|
Significant other
|
|
Significant
|
||||||||
|
|
Value at
|
|
active markets
|
|
observable inputs
|
|
unobservable inputs
|
||||||||
Description
|
|
March 31, 2019
|
|
(Level 1)
|
|
(Level 2)
|
|
(Level 3)
|
||||||||
Interest rate contracts
(1)
|
|
$
|
4,321
|
|
|
$
|
—
|
|
|
$
|
4,321
|
|
|
$
|
—
|
|
Foreign currency contract assets, current and long-term
(2)
|
|
$
|
1,431
|
|
|
$
|
—
|
|
|
$
|
1,431
|
|
|
$
|
—
|
|
Foreign currency contract liabilities, current and long-term
(3)
|
|
$
|
(2,057
|
)
|
|
$
|
—
|
|
|
$
|
(2,057
|
)
|
|
$
|
—
|
|
Contingent receivable asset
|
|
$
|
627
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
627
|
|
Contingent consideration liabilities
|
|
$
|
(82,457
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(82,457
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
Fair Value Measurements Using
|
||||||||||||
|
|
Total Fair
|
|
Quoted prices in
|
|
Significant other
|
|
Significant
|
||||||||
|
|
Value at
|
|
active markets
|
|
observable inputs
|
|
unobservable inputs
|
||||||||
Description
|
|
December 31, 2018
|
|
(Level 1)
|
|
(Level 2)
|
|
(Level 3)
|
||||||||
Interest rate contracts
(1)
|
|
$
|
5,772
|
|
|
$
|
—
|
|
|
$
|
5,772
|
|
|
$
|
—
|
|
Foreign currency contract assets, current and long-term
(2)
|
|
$
|
1,578
|
|
|
$
|
—
|
|
|
$
|
1,578
|
|
|
$
|
—
|
|
Foreign currency contract liabilities, current and long-term
(3)
|
|
$
|
(1,608
|
)
|
|
$
|
—
|
|
|
$
|
(1,608
|
)
|
|
$
|
—
|
|
Contingent receivable asset
|
|
$
|
607
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
607
|
|
Contingent consideration liabilities
|
|
$
|
(82,236
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(82,236
|
)
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
Beginning balance
|
$
|
82,236
|
|
|
$
|
10,956
|
|
Fair value adjustments recorded to income during the period
|
775
|
|
|
(13
|
)
|
||
Contingent payments made
|
(554
|
)
|
|
(15
|
)
|
||
Ending balance
|
$
|
82,457
|
|
|
$
|
10,928
|
|
Contingent consideration asset or liability
|
|
Fair value at March 31, 2019
|
|
Valuation technique
|
|
Unobservable inputs
|
|
Range
|
||
Revenue-based royalty
|
|
$
|
9,966
|
|
|
Discounted cash flow
|
|
Discount rate
|
|
14% - 25%
|
payments contingent liability
|
|
|
|
|
Projected year of payments
|
|
2019-2034
|
|||
|
|
|
|
|
|
|
|
|
||
Supply chain milestone
|
|
$
|
14,100
|
|
|
Discounted cash flow
|
|
Discount rate
|
|
3.9%
|
contingent liability
|
|
|
|
|
Probability of milestone payment
|
|
95%
|
|||
|
|
|
|
|
|
Projected year of payments
|
|
2019
|
||
|
|
|
|
|
|
|
|
|
||
Revenue milestones
|
|
$
|
58,391
|
|
|
Discounted cash flow
|
|
Discount rate
|
|
3.1% - 15%
|
contingent liability
|
|
|
|
|
Projected year of payments
|
|
2019-2023
|
|||
|
|
|
|
|
|
|
|
|
||
Contingent receivable
|
|
$
|
627
|
|
|
Discounted cash flow
|
|
Discount rate
|
|
10%
|
asset
|
|
|
|
|
Probability of milestone payment
|
|
68%
|
|||
|
|
|
|
|
|
Projected year of payments
|
|
2019
|
||
|
|
|
|
|
|
|
|
|
||
Contingent consideration asset or liability
|
|
Fair value at December 31, 2018
|
|
Valuation technique
|
|
Unobservable inputs
|
|
Range
|
||
Revenue-based royalty
|
|
$
|
10,661
|
|
|
Discounted cash flow
|
|
Discount rate
|
|
9.9% - 25%
|
payments contingent liability
|
|
|
|
|
Projected year of payments
|
|
2018-2037
|
|||
|
|
|
|
|
|
|
|
|
||
Supply chain milestone
|
|
$
|
13,593
|
|
|
Discounted cash flow
|
|
Discount rate
|
|
5.3%
|
contingent liability
|
|
|
|
|
Probability of milestone payment
|
|
95%
|
|||
|
|
|
|
|
|
Projected year of payments
|
|
2019
|
||
|
|
|
|
|
|
|
|
|
||
Revenue milestones
|
|
$
|
57,982
|
|
|
Discounted cash flow
|
|
Discount rate
|
|
3.3% - 13%
|
contingent liability
|
|
|
|
|
Projected year of payments
|
|
2019-2023
|
|||
|
|
|
|
|
|
|
|
|
||
Contingent receivable
|
|
$
|
607
|
|
|
Discounted cash flow
|
|
Discount rate
|
|
10%
|
asset
|
|
|
|
|
Probability of milestone payment
|
|
67%
|
|||
|
|
|
|
|
|
Projected year of payments
|
|
2019
|
|
2019
|
||
Goodwill balance at January 1
|
$
|
335,433
|
|
Effect of foreign exchange
|
(413
|
)
|
|
Purchase price adjustments as the result of acquisitions
|
(69
|
)
|
|
Goodwill balance at March 31
|
$
|
334,951
|
|
|
March 31, 2019
|
||||||||||
|
Gross Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net Carrying
Amount
|
||||||
Patents
|
$
|
20,231
|
|
|
$
|
(5,467
|
)
|
|
$
|
14,764
|
|
Distribution agreements
|
8,012
|
|
|
(6,023
|
)
|
|
1,989
|
|
|||
License agreements
|
26,926
|
|
|
(7,941
|
)
|
|
18,985
|
|
|||
Trademarks
|
29,991
|
|
|
(7,298
|
)
|
|
22,693
|
|
|||
Covenants not to compete
|
1,028
|
|
|
(1,008
|
)
|
|
20
|
|
|||
Customer lists
|
39,965
|
|
|
(24,732
|
)
|
|
15,233
|
|
|||
In-process technology
|
3,420
|
|
|
—
|
|
|
3,420
|
|
|||
|
|
|
|
|
|
||||||
Total
|
$
|
129,573
|
|
|
$
|
(52,469
|
)
|
|
$
|
77,104
|
|
|
December 31, 2018
|
||||||||||
|
Gross Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net Carrying
Amount
|
||||||
Patents
|
$
|
19,378
|
|
|
$
|
(5,012
|
)
|
|
$
|
14,366
|
|
Distribution agreements
|
8,012
|
|
|
(5,766
|
)
|
|
2,246
|
|
|||
License agreements
|
26,930
|
|
|
(7,411
|
)
|
|
19,519
|
|
|||
Trademarks
|
29,998
|
|
|
(6,586
|
)
|
|
23,412
|
|
|||
Covenants not to compete
|
1,028
|
|
|
(1,000
|
)
|
|
28
|
|
|||
Customer lists
|
39,936
|
|
|
(23,361
|
)
|
|
16,575
|
|
|||
In-process technology
|
3,420
|
|
|
—
|
|
|
3,420
|
|
|||
|
|
|
|
|
|
||||||
Total
|
$
|
128,702
|
|
|
$
|
(49,136
|
)
|
|
$
|
79,566
|
|
Leases
|
As of March 31, 2019
|
||
Assets
|
|
||
ROU operating lease assets
|
$
|
80,453
|
|
|
|
||
Liabilities
|
|
||
Short-term operating lease liabilities
|
11,825
|
|
|
Long-term operating lease liabilities
|
72,243
|
|
|
Total operating lease liabilities
|
$
|
84,068
|
|
|
|
Three months ended
|
||
Lease Cost
|
Classification
|
March 31, 2019
|
||
Operating lease cost (a)
|
Selling, general and administrative expenses
|
$
|
3,827
|
|
Sublease (income) (b)
|
Selling, general and administrative expenses
|
(146
|
)
|
|
Net lease cost
|
|
$
|
3,681
|
|
|
|
Three Months Ended
|
||
|
|
March 31, 2019
|
||
Cash paid for amounts included in the measurement of lease liabilities
|
|
$
|
3,713
|
|
Right-of-use assets obtained in exchange for lease obligations
|
|
$
|
1,162
|
|
Supplemental disclosure
|
|
March 31, 2019
|
Weighted average remaining lease term
|
|
12 years
|
Weighted average discount rate
|
|
3.3%
|
Year ended December 31,
|
|
Amounts under Operating Leases
|
||
Remaining 2019
|
|
$
|
10,380
|
|
2020
|
|
12,251
|
|
|
2021
|
|
11,109
|
|
|
2022
|
|
8,822
|
|
|
2023
|
|
7,026
|
|
|
Thereafter
|
|
53,203
|
|
|
Total lease payments
|
|
102,791
|
|
|
Less: Imputed interest
|
|
(18,723
|
)
|
|
Total
|
|
$
|
84,068
|
|
Year ended December 31,
|
|
Operating Leases
|
||
2019
|
|
$
|
13,421
|
|
2020
|
|
11,319
|
|
|
2021
|
|
9,995
|
|
|
2022
|
|
8,053
|
|
|
2023
|
|
6,953
|
|
|
Thereafter
|
|
52,754
|
|
|
Total
|
|
$
|
102,495
|
|
•
|
risks relating to managing growth, particularly if accomplished through acquisitions and the integration of acquired businesses;
|
•
|
risks relating to protecting our intellectual property;
|
•
|
claims by third parties that we infringe their intellectual property rights, which could cause us to incur significant legal or licensing expenses and prevent us from selling our products;
|
•
|
greater scrutiny and regulation by governmental authorities, including risks relating to the subpoena we received in October 2016 from the U.S. Department of Justice seeking information on our marketing and promotional practices;
|
•
|
risks relating to physicians’ use of our products in unapproved circumstances;
|
•
|
FDA regulatory clearance processes and any failure to obtain and maintain required regulatory clearances and approvals;
|
•
|
international regulatory clearance processes and any failure to obtain and maintain required regulatory clearances and approvals;
|
•
|
disruption of our security of information technology systems to operate our business, our critical information systems or a breach in the security of our systems;
|
•
|
the effect of evolving U.S. and international laws and regulations regarding privacy and data protection;
|
•
|
uncertainties about when, how or if the United Kingdom will withdraw from the European Union;
|
•
|
risks relating to significant adverse changes in, or our failure to comply with, governing regulations;
|
•
|
restrictions and limitations in our debt agreements and instruments, which could affect our ability to operate our business and our liquidity;
|
•
|
uncertainties relating to the LIBOR calculation and potential phasing out of LIBOR after 2021;
|
•
|
expending significant resources for research, development, testing and regulatory approval or clearance of our products under development and any failure to develop the products, any failure of the products to be effective or any failure to obtain approvals for commercial use;
|
•
|
violations of laws targeting fraud and abuse in the healthcare industry;
|
•
|
risks relating to healthcare reform legislation negatively affecting our financial results, business, operations or financial condition;
|
•
|
loss of key personnel;
|
•
|
termination or interruption of, or a failure to monitor, our supply relationships or increases in the price of our component parts, finished products, third-party services or raw materials, particularly petroleum-based products;
|
•
|
product liability claims;
|
•
|
failure to report adverse medical events to the FDA or other governmental authorities, which may subject us to sanctions that may materially harm our business;
|
•
|
failure to maintain or establish sales capabilities on our own or through third parties, which may result in our inability to commercialize any of our products in countries where we lack direct sales and marketing capabilities;
|
•
|
employees, independent contractors, consultants, manufacturers and distributors engaging in misconduct or other improper activities, including noncompliance;
|
•
|
the addressable market for our product groups being smaller than our estimates;
|
•
|
consolidation in the healthcare industry, group purchasing organizations or public procurement policies leading to demands for price concessions;
|
•
|
our inability to compete in markets, particularly if there is a significant change in relevant practices or technology;
|
•
|
fluctuations in foreign currency exchange rates negatively impacting our financial results;
|
•
|
inability to accurately forecast customer demand for our products or manage our inventory;
|
•
|
international and national economic and industry conditions constantly changing;
|
•
|
changes in general economic conditions, geopolitical conditions, U.S. trade policies and other factors beyond our control;
|
•
|
failure to comply with export control laws, customs laws, sanctions laws and other laws governing our operations in the U.S. and other countries, which could subject us to civil or criminal penalties, other remedial measures and legal expenses;
|
•
|
inability to generate sufficient cash flow to fund our debt obligations, capital expenditures, and ongoing operations;
|
•
|
risks relating to our revenues being derived from a few products and medical procedures;
|
•
|
risks relating to work stoppage, transportation interruptions, severe weather and natural disasters;
|
•
|
fluctuations in our effective tax rate adversely affecting our business, financial condition or results of operations;
|
•
|
limits on reimbursement imposed by governmental and other programs;
|
•
|
failure to comply with applicable environmental laws and regulations;
|
•
|
volatility of the market price of our common stock and potential dilution from future equity offerings; and
|
•
|
other factors referenced in our press releases and in our reports filed with the Securities and Exchange Commission (the “SEC”).
|
•
|
Although uncertainty over the future of Brexit negotiations in the United Kingdom continues, we currently believe that due to our newly operational distribution and training center in Reading, United Kingdom and other plans we have in place, we are prepared to avoid material disruption to our business.
|
•
|
Several new products are scheduled for introduction in the remainder of 2019, including the TEMNO Elite™ biopsy device, next generation Heartspan® transseptal needle, PreludeSYNC DISTAL hemostasis device and HeRO® arterial graft component, among others. We currently believe these new products will contribute to future sales growth and margin improvement.
|
•
|
Our transition of the manufacturing activities associated with the products we acquired from BD in February 2018 to our facility in Tijuana, Mexico is currently on schedule to be completed by the end of 2019.
|
•
|
Our acquisition of Cianna Medical is complete, and our integration of the Cianna Medical operations continues according to our expectations. We currently expect regulatory approval of the SAVI SCOUT
®
product for sale in Europe in the coming months.
|
|
Three Months Ended March 31,
|
||
|
2019
|
|
2018
|
Net sales
|
100%
|
|
100%
|
Gross profit
|
43.9
|
|
43.4
|
Selling, general and administrative expenses
|
32.8
|
|
32.0
|
Research and development expenses
|
6.7
|
|
7.1
|
Contingent consideration expense
|
0.3
|
|
0.0
|
Income from operations
|
4.0
|
|
4.3
|
Other expense - net
|
(1.1)
|
|
(1.2)
|
Income before income taxes
|
2.9
|
|
3.1
|
Net income
|
2.6
|
|
2.6
|
|
|
|
Three Months Ended March 31,
|
||||||
|
% Change
|
|
2019
|
|
2018
|
||||
Cardiovascular
|
|
|
|
|
|
|
|||
Stand-alone devices
|
14.6%
|
|
95,427
|
|
|
83,246
|
|
||
Cianna Medical
|
n/a
|
|
12,849
|
|
|
—
|
|
||
Custom kits and procedure trays
|
(1.0)%
|
|
32,943
|
|
|
33,272
|
|
||
Inflation devices
|
(1.8)%
|
|
22,017
|
|
|
22,419
|
|
||
Catheters
|
27.1%
|
|
43,039
|
|
|
33,865
|
|
||
Embolization devices
|
(6.0)%
|
|
11,827
|
|
|
12,587
|
|
||
CRM/EP
|
18.3%
|
|
12,378
|
|
|
10,466
|
|
||
Total
|
17.7%
|
|
230,480
|
|
|
195,855
|
|
||
|
|
|
|
|
|
||||
Endoscopy
|
|
|
|
|
|
||||
Endoscopy devices
|
9.6%
|
|
7,869
|
|
|
7,180
|
|
||
|
|
|
|
|
|
||||
Total
|
17.4%
|
|
$
|
238,349
|
|
|
$
|
203,035
|
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
Operating Income
|
|
|
|
|
|||
Cardiovascular
|
$
|
7,619
|
|
|
$
|
6,397
|
|
Endoscopy
|
1,904
|
|
|
2,384
|
|
||
Total operating income
|
$
|
9,523
|
|
|
$
|
8,781
|
|
•
|
Euro (EUR)
|
•
|
Chinese Yuan Renminbi (CNY), and
|
•
|
British Pound (GBP).
|
•
|
Hong Kong Dollar (HKD),
|
•
|
Mexican Peso (MXN),
|
•
|
Australian Dollar (AUD),
|
•
|
Canadian Dollar (CAD),
|
•
|
Brazilian Real (BRL),
|
•
|
Swiss Franc (CHF),
|
•
|
Swedish Krona (SEK),
|
•
|
Danish Krone (DKK),
|
•
|
Singapore Dollars (SGD),
|
•
|
South Korean Won (KRW), and
|
•
|
Japanese Yen (JPY).
|
Currency
|
Symbol
|
Forward Notional Amount
|
|
Australian Dollar
|
AUD
|
3,100
|
|
Canadian Dollar
|
CAD
|
3,850
|
|
Swiss Franc
|
CHF
|
2,125
|
|
Chinese Renminbi
|
CNY
|
238,000
|
|
Danish Krone
|
DKK
|
15,725
|
|
Euro
|
EUR
|
18,065
|
|
British Pound
|
GBP
|
4,915
|
|
Japanese Yen
|
JPY
|
1,305,000
|
|
Korea Won
|
KRW
|
3,750,000
|
|
Mexican Peso
|
MXN
|
215,500
|
|
Swedish Krona
|
SEK
|
25,180
|
|
Currency
|
Symbol
|
Forward Notional Amount
|
|
Australian Dollar
|
AUD
|
11,400
|
|
Brazilian Real
|
BRL
|
9,000
|
|
Canadian Dollar
|
CAD
|
1,136
|
|
Swiss Franc
|
CHF
|
500
|
|
Chinese Renminbi
|
CNY
|
50,920
|
|
Danish Krone
|
DKK
|
4,550
|
|
Euro
|
EUR
|
7,293
|
|
British Pound
|
GBP
|
3,350
|
|
Hong Kong Dollar
|
HKD
|
11,000
|
|
Japanese Yen
|
JPY
|
265,000
|
|
Korean Won
|
KRW
|
5,500,000
|
|
Mexican Peso
|
MXN
|
18,000
|
|
Swedish Krona
|
SEK
|
12,000
|
|
Singapore Dollar
|
SGD
|
8,500
|
|
Exhibit No.
|
|
Description
|
|
3.1
|
|
||
|
|
|
|
3.2
|
|
||
|
|
|
|
10.1
|
|
||
|
|
|
|
10.2
|
|
||
|
|
|
|
10.3
|
|
||
|
|
|
|
31.1
|
|
||
|
|
|
|
31.2
|
|
||
|
|
|
|
32.1
|
|
||
|
|
|
|
32.2
|
|
||
|
|
|
|
101
|
|
The following financial information from the quarterly report on Form 10-Q of Merit Medical Systems, Inc. for the quarter ended March 31, 2019, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Statements of Income, (ii) Consolidated Balance Sheets, (iii) Consolidated Statements of Comprehensive Income, (iv) Consolidated Statements of Cash Flows, and (v) Condensed Notes to the Consolidated Financial Statements
|
(1)
|
Incorporated by reference from our Current Report on Form 8-K filed on May 31, 2018 (as amended).
|
(2)
|
Incorporated by reference from our Registration Statement on Form S-8 filed on June 4, 2018.
|
|
|
||
Date: May 3, 2019
|
By:
|
/s/ FRED P. LAMPROPOULOS
|
|
|
|
|
Fred P. Lampropoulos, President and
|
|
|
|
Chief Executive Officer
|
|
|
|
|
Date: May 3, 2019
|
By:
|
/s/ RAUL PARRA
|
|
|
|
|
Raul Parra
|
|
|
|
Chief Financial Officer and Treasurer
|
|
|
|
|
|
|
|
|
1 Year Merit Medical Systems Chart |
1 Month Merit Medical Systems Chart |
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