SOUTH JORDAN, Utah, July 23, 2008 (PRIME NEWSWIRE) -- Merit Medical Systems, Inc. (Nasdaq:MMSI), a leading manufacturer and marketer of proprietary disposable devices used primarily in cardiology and radiology procedures, today announced record revenues of $57.4 million for its second quarter ended June 30, 2008, compared with $51.8 million for the second quarter of 2007, an increase of 11%. Revenues for the six-month period ended June 30, 2008 were a record $111.0 million, compared with $102.8 million for the same six-month period in 2007, a gain of 8%.
Net income for the second quarter ended June 30, 2008 was a record $5.8 million, up 62% to $0.21 per share, compared to $3.6 million, or $0.13 per share, for the comparable quarter of 2007. Net income for the six-month period ended June 30, 2008 was a record $10.1 million, up 54% to $0.36 per share, compared to $6.6 million, or $0.23 per share, for the same period of 2007.
"We are pleased that our plan for margin and profit improvement yielded record results for the quarter," said Fred P. Lampropoulos, Merit's Chairman and Chief Executive Officer. "We believe improvement in procedure rates, acceptance of our new products and the expansion of our market opportunities should continue to drive performance in the future."
"We continue to focus on the areas that have created these results such as automation, alternate site opportunities, overall efficiency and lean manufacturing," Lampropoulos added. "These results were accomplished despite headwinds with commodity prices and labor costs."
All product categories of Merit's business contributed to revenue growth in the second quarter of 2008, with catheter sales increasing 20%; stand-alone device sales growing 14%; inflation device sales rising 8%; and custom kit and tray sales increasing 7%.
For the six-month period ended June 30, 2008, catheter sales increased 15%; stand-alone device sales grew 10%; inflation device sales rose 7%; and custom kit and tray sales increased 4%.
Gross margins for the second quarter of 2008 were 42.7% of sales, compared to 37.7% of sales for the second quarter of 2007. Gross margins for the six-month period ended June 30, 2008 were 41.5% of sales, compared to 37.3% of sales for the same period of 2007. The 500-basis point increase in gross margins for the second quarter of 2008 and the 420-basis point increase for the six-month period ended June 30, 2008 can be attributed primarily to a reduction in production headcount, lower average fixed overhead costs through increased production, some customer price increases, product mix improvement from the discontinuance of lower-margin kits sold to an OEM customer, lower unit costs for products built in Mexico and product automation.
Selling, general and administrative expenses for the second quarter of 2008 were 22.4% of sales, compared to 22.9% of sales for the second quarter of 2007. For the six-month period ended June 30, 2008, selling, general and administrative expenses were 23.3% of sales, compared with 23.2% of sales for the first six months of 2007.
Research and development costs during the second quarter of 2008 were 4.6% of sales, compared to 4.3% of sales for the second quarter of 2007. Research and development costs were 4.1% of sales for the first six months of 2008, compared to 4.4% of sales for the same period of 2007.
Income from operations was a record $9.0 million, up 65% for the second quarter of 2008, compared to $5.5 million for the second quarter of 2007. For the six-month period ended June 30, 2008, income from operations was a record $15.6 million, up 57% compared to $10.0 million for the same period of 2007.
Merit's effective tax rate for the second quarter of 2008 was 36.5%, compared with 35.0% for the second quarter of 2007. For the six-month period ended June 30, 2008, Merit's effective tax rate was 36.3%, compared to 35.0% for the same period of 2007.
CONFERENCE CALL
Merit Medical invites all interested parties to participate in its conference call today, July 23rd, 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 800-218-9073, and the international number is 303-205-0033. 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.
INCOME STATEMENT
(Unaudited, in thousands except per share data)
Three Months Ended Six Months Ended
June 30, June 30,
----------------------- ----------------------
2008 2007 2008 2007
----------------------- ----------------------
SALES $ 57,441 $ 51,811 $ 110,994 $ 102,841
COST OF SALES 32,939 32,275 64,900 64,447
----------- ----------- ---------- ----------
GROSS PROFIT 24,502 19,536 46,094 38,394
OPERATING EXPENSES
Selling, general and
administrative 12,839 11,858 25,911 23,873
Research and
development 2,654 2,207 4,570 4,571
----------- ----------- ---------- ----------
Total 15,493 14,065 30,481 28,444
INCOME FROM
OPERATIONS 9,009 5,471 15,613 9,950
OTHER INCOME (EXPENSE)
Interest income 162 63 312 152
Other (expense) (16) (1) (21) (2)
----------- ----------- ---------- ----------
Total other income
- net 146 62 291 150
INCOME BEFORE INCOME
TAX EXPENSE 9,155 5,533 15,904 10,100
INCOME TAX EXPENSE 3,337 1,937 5,769 3,535
----------- ----------- ---------- ----------
NET INCOME $ 5,818 $ 3,596 $ 10,135 $ 6,565
----------- ----------- ---------- ----------
EARNINGS PER SHARE-
Basic $ 0.21 $ 0.13 $ 0.37 $ 0.24
=========== =========== ========== ==========
Diluted $ 0.21 $ 0.13 $ 0.36 $ 0.23
=========== =========== ========== ==========
AVERAGE COMMON
SHARES-
Basic 27,603,207 27,727,055 27,546,681 27,690,218
=========== =========== ========== ==========
Diluted 28,325,382 28,480,161 28,310,855 28,548,583
=========== =========== ========== ==========
BALANCE SHEET
(Unaudited in thousands)
June 30, December 31,
2008 2007
---------- -----------
ASSETS
Current Assets
Cash and cash equivalents $ 26,756 $ 17,574
Trade receivables, net 25,212 26,619
Employee receivables 130 144
Other receivables 800 1,140
Inventories 36,274 34,106
Prepaid expenses and other assets 1,655 1,297
Deferred income tax assets 2,087 811
Income tax refunds receivable 350 297
---------- -----------
Total Current Assets 93,264 81,988
Property and equipment, net 102,595 99,696
Other intangibles, net 6,429 6,163
Goodwill 11,680 9,527
Other assets 3,053 2,964
Deferred income tax assets 336 4
Deposits 78 78
---------- -----------
Total Assets $ 217,435 $ 200,420
========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Trade payables 11,709 10,275
Other payables 1,500
Accrued expenses 10,856 9,492
Advances from employees 341 267
Liabilities related to unrecognized tax
positions 1,023
Income taxes payable 846 737
---------- -----------
Total Current Liabilities 25,252 21,794
Deferred income tax liabilities 6,511 6,082
Liabilities related to unrecognized tax
positions 2,588 2,588
Deferred compensation payable 3,207 3,063
Deferred credits 2,052 2,105
Other long-term obligation 371 420
---------- -----------
Total Liabilities 39,981 36,052
Stockholders' Equity
Common stock 55,272 52,477
Retained earnings 122,082 111,947
Accumulated other comprehensive loss 100 (56)
---------- -----------
Total stockholders' equity 177,454 164,368
---------- -----------
Total Liabilities and Stockholders' Equity $ 217,435 $ 200,420
========== ===========
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 1,600 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, 2007. 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 supplier relationships, 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; 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; 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.