SOUTH JORDAN, Utah, Feb. 14, 2008 (PRIME NEWSWIRE) -- Merit Medical Systems, Inc. (Nasdaq:MMSI), a manufacturer and marketer of proprietary disposable devices used primarily in cardiology and radiology procedures, today announced financial results for the fourth quarter and fiscal year ended December 31, 2007.
For the fourth quarter of 2007, the Company reported record revenue of $54.3 million, a 7% increase over revenue of $50.8 million for the fourth quarter of 2006. Net income for the fourth quarter of 2007 was $4.7 million, or $0.17 per share, up 55% compared to net income of $3.1 million, or $0.11 per share, reported for the fourth quarter of 2006.
For the year ended December 31, 2007, the Company reported record revenue of $207.8 million, a 9% increase over revenue of $190.7 million reported for the year ended December 31, 2006. In addition, the Company reported net income of $15.6 million, or $0.55 per share, for calendar year 2007, an increase of 27% compared to net income of $12.3 million, or $0.44 per share, for calendar year 2006.
For the fourth quarter of 2007, compared to the fourth quarter of 2006, catheter sales rose 15%; stand-alone device sales increased 12%; inflation device sales rose 6%; and custom kit and tray sales were essentially unchanged.
Sales in each of the Company's product categories grew for the year ended December 31, 2007, compared to the year ended December 31, 2006, as catheter sales rose 18%; stand-alone device sales increased 12%; custom kit and tray sales rose 7%; and inflation device sales rose 5%.
"We executed our plan for margin expansion and profitability while adding new technology and product opportunities," said Fred P. Lampropoulos, Merit's Chairman and Chief Executive Officer. "Our goals were accomplished in challenging market conditions. We believe our new product releases and continued attention to our profit and margin plan will contribute to efforts to reach our goals of improving gross margins 150 basis points and improving profits by at least 20% year over year."
Gross margins increased 250 basis points in the fourth quarter of 2007 to 39.8% of sales, up from 37.3% of sales in the fourth quarter of 2006. This was the third consecutive quarter of improvement in gross margins and was primarily due to higher productivity from our workforce, which allowed for a 13% reduction in manufacturing and engineering headcount, increased automation and other cost savings projects, and moving some production to Mexico. Gross margins were up slightly from 38.3% of sales for calendar year 2006 to 38.4% of sales for calendar year 2007.
Selling, general and administrative expenses were 23.1% and 23.2% of sales for the fourth quarter and calendar year 2007, respectively, compared with 23.4% and 23.9% of sales for the comparable periods of 2006, respectively.
Research and development costs were 3.9% and 4.2% of sales, for the fourth quarter and year ended December 31, 2007, respectively, compared to 4.6% and 4.5% of sales for the comparable periods of 2006, respectively.
Merit's effective tax rates for the fourth quarter and calendar year 2007 were 33.5% and 33.4%, respectively, compared to 35.5% and 35.9% for the same periods of 2006, respectively.
The Company earned a record $30.7 million in cash from operations for the year ended December 31, 2007, up from $19.1 million for the year ended December 31, 2006. The Company's cash position increased to $17.6 million on December 31, 2007, compared to $9.8 million on December 31, 2006. This cash position was net of $5.4 million spent for stock repurchases and $4.7 million spent on acquisitions.
INCOME STATEMENT
(Unaudited, in thousands except per share data)
Three Months Ended Twelve Months Ended
December 31, December 31,
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2007 2006 2007 2006
---------------------- ----------------------
SALES $ 54,343 $ 50,816 $ 207,768 $ 190,674
COST OF SALES 32,729 31,853 127,977 117,596
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GROSS PROFIT 21,614 18,963 79,791 73,078
OPERATING EXPENSES
Selling, general and
administrative 12,553 11,909 48,133 45,486
Research and
development 2,127 2,361 8,688 8,582
---------- ---------- ---------- ----------
Total 14,680 14,270 56,821 54,068
INCOME FROM OPERATIONS 6,934 4,693 22,970 19,010
OTHER INCOME (EXPENSE)
Interest income 145 70 393 250
Other (expense) 34 (29) 36 (76)
---------- ---------- ---------- ----------
Total other income
- net 179 41 429 174
INCOME BEFORE INCOME
TAX EXPENSE 7,113 4,734 23,399 19,184
INCOME TAX EXPENSE 2,385 1,681 7,811 6,883
---------- ---------- ---------- ----------
NET INCOME $ 4,728 $ 3,053 $ 15,588 $ 12,301
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EARNINGS PER SHARE-
Basic $ 0.17 $ 0.11 $ 0.57 $ 0.45
========== ========== ========== ==========
Diluted $ 0.17 $ 0.11 $ 0.55 $ 0.44
========== ========== ========== ==========
AVERAGE COMMON SHARES-
Basic 27,340,755 27,509,033 27,424,686 27,333,146
========== ========== ========== ==========
Diluted 28,037,986 28,630,264 28,204,235 28,244,948
========== ========== ========== ==========
BALANCE SHEET
(Unaudited in thousands)
December 31, December 31,
2007 2006
------------ ------------
ASSETS
Current Assets
Cash and cash equivalents $ 17,574 $ 9,838
Trade receivables, net 26,619 25,745
Employee receivables 144 194
Other receivables 1,140 192
Inventories 34,106 38,562
Prepaid expenses and other assets 1,297 1,031
Deferred income tax assets 3 2
Income tax refunds receivable 297 82
------------ ------------
Total Current Assets 81,180 75,646
Property and equipment, net 99,696 92,383
Other intangibles, net 6,163 4,350
Goodwill 9,527 7,541
Other assets 2,964 2,656
Deferred income tax assets 4 2
Deposits 78 90
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Total Assets $ 199,612 $ 182,668
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Trade payables 10,275 10,598
Accrued expenses 9,492 8,464
Advances from employees 267 245
Deferred income tax liabilities 35 190
Income taxes payable 737 1,177
------------ ------------
Total Current Liabilities 20,806 20,674
Deferred income tax liabilities 5,239 5,469
Liabilities related to unrecognized tax
positions 3,611
Deferred compensation payable 3,063 2,869
Deferred credits 2,105 2,239
Other long-term obligations 420 205
------------ ------------
Total Liabilities 35,244 31,456
Stockholders' Equity
Common stock 52,477 54,394
Retained earnings 111,947 96,969
Accumulated other comprehensive loss (56) (151)
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Total stockholders' equity 164,368 151,212
------------ ------------
Total Liabilities and Stockholders' Equity $ 199,612 $ 182,668
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CONFERENCE CALL
Merit Medical invites all interested parties to participate in its fourth quarter and year-end conference call today, February 14, 2008, 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 800-866-5043, and the international number is 303-262-2137. 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, particularly in cardiology and radiology. Merit serves client hospitals worldwide with a domestic and international sales force totaling approximately 90 individuals. Merit employs approximately 1,520 people worldwide, with facilities in Salt Lake City and South Jordan, Utah; Angleton, Texas; Richmond, Virginia; Maastricht and Venlo, The Netherlands; and Galway, Ireland.
The Merit Medical Systems, Inc. logo is available at http://www.primenewswire.com/newsroom/prs/?pkgid=3282
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; inability to successfully manage growth through acquisitions; delays in obtaining regulatory approvals, or the failure to maintain such approvals; 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, and fluctuations in and obsolescence of inventory; volatility of the market price of Merit's common stock; 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 Merit's Annual Report on Form 10-K 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 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.