• Q4 worldwide revenue of $138.4 million ($141.0 million constant currency), up 4.2% as reported, up 6.2% on a comparable, constant currency basis
  • Q4 non-GAAP diluted EPS were $0.24; GAAP EPS were $0.14
  • FY15 revenue of $542.1 million ($553.4 million in constant currency), up 6.4% as reported, up 8.6% on a comparable, constant currency basis
  • FY15 non-GAAP diluted EPS were $0.87; GAAP EPS were $0.53
  • Merit generated $69.5 million in cash from operations for the year ended December 31, 2015, compared to $53.3 million for the year ended December 31, 2014

SOUTH JORDAN, Utah, Feb. 22, 2016 (GLOBE NEWSWIRE) -- Merit Medical Systems, Inc. (NASDAQ:MMSI), a leading manufacturer and marketer of proprietary disposable devices used primarily in cardiology, radiology and endoscopy, today announced fourth quarter revenues of $138.4 million ($141.0 million in constant currency), an increase of 4.2% over reported revenues and 6.2% on a comparable, constant currency basis over $132.8 million for the quarter ended December 31, 2014.  Fourth quarter non-GAAP earnings were $10.8 million, or $0.24 per share, down 4.4% compared to $11.3 million, or $0.26 per share, for the quarter ended December 31, 2014.  As reported, net income for the quarter ended December 31, 2015 was $6.4 million or $0.14 per diluted share. 

Revenues for the year ended December 31, 2015 were a record $542.1 million ($553.4 million in constant currency), an increase of 6.4% over reported revenues and 8.6% on a comparable, constant currency basis over $509.7 million for the year ended December 31, 2014.  Merit's non-GAAP net income and diluted earnings per share for the year ended December 31, 2015 were a record $38.5 million, or $0.87 per share, an increase of 14.1% and 11.5%, respectively, compared to $33.8 million, or $0.78 per share, for the year ended December 31, 2014.  GAAP net income for the year ended December 31, 2015 was $23.8 million, or $0.53 per diluted share, an increase of 3.6% and 0.0%, respectively, compared to $23.0 million or $0.53 per diluted share for the year ended December 31, 2014.

Revenues from Merit's core business grew 3.5% and 5.9% for the quarter and year ended December 31, 2015, respectively, compared to the corresponding periods of 2014.

For the quarter ended December 31, 2015, compared to the quarter ended December 31, 2014, Endotek sales increased 24%; stand-alone device sales rose 11%; catheter sales were up 6%; inflation device sales increased 2%; Malvern sales fell 1%; custom kit and tray sales declined 2%; and BioSphere sales decreased 4%.

For the year ended December 31, 2015, compared to the year ended December 31, 2014, Endotek sales were up 18%; catheter sales increased 11%; stand-alone device sales were up 8%; custom kit and tray sales increased 5%; BioSphere sales grew 3%; Malvern sales rose 3%; and inflation device sales rose 1%.

Merit recently announced the receipt of regulatory approvals for four new products:

Merit's Centros® Dialysis Catheter has received CE Marking.  The device has been available in the United States since 2014 and can now be marketed in European territories.

Merit also received CE Marking for HepaSphere™ Microspheres with irinotecan indication, which is expected to complement the doxorubicin indication.

In the United States, Merit received FDA approval for the Elation® Wireguided Balloon Dilation Catheter with biliary indication, which is expected to complement the company's esophageal indication.

Additionally, Merit’s Prelude SNAP™ Splittable Hydrophilic Sheath gained approval from the FDA and is expected to complement Merit’s existing uncoated sheath.

Management believes these four new approvals will considerably strengthen Merit’s product portfolio and that upon successful launch of these products, Merit will be able to achieve greater market penetration, which, in turn, is expected to drive top-line growth.  Merit also boasts an encouraging product pipeline, which includes a safety centesis catheter, the PAL™ Planner and the 40 atm. BasixTouch™ Inflation Device.
"We are pleased we accomplished our forecasted top-line and non-GAAP results for the year," said Fred P. Lampropoulos, Merit's Chairman and Chief Executive Officer.  “Not every aspect of our plan was on point, but we believe the important parameters were met and will propel us into year two of our three-year plan.  Despite a slow second half of 2015, we hit our revenue expectation at the midpoint.  We believe that transitioning to direct sales from distributors in Canada and Australia; the momentum of product introductions in the second half of 2015 such as our Elation™ balloon line, the Prelude SNAP™ splittable sheath, the AEROmini® tracheobronchial stent, and our global distribution agreement for the SwiftNINJA® steerable microcatheter; and new product introductions early this year, will accelerate our growth in 2016.  We also believe that our introduction of the HeRO® Graft and the opportunities in vascular surgery will contribute to growth as well.”

Management today announced that it has named Brian G. Lloyd Merit’s new Chief Legal Officer effective April 1, 2016.  Lloyd has been a member of the business transactions group at Parr Brown Gee & Loveless for more than 20 years.  His experience includes advising public and private companies, as well as investors, on corporate governance, securities regulation, mergers, acquisitions, and financing transactions, including public offering, private equity and venture capital transactions. He has represented a number of Utah’s leading publicly held companies, including Merit, counseling clients on financing transactions, corporate governance issues and regulatory matters. Lloyd has been recognized as one of the top corporate/mergers and acquisitions lawyers in Utah in the 2003-2015 editions of Chambers USA –America’s Leading Business Lawyers and has been honored by Best Lawyers in America from 2007-2016, including recognition in Utah as “Lawyer of the Year” in Corporate Compliance in 2015.  He earned a B.A. from Brigham Young University and a J.D. from Columbia University.

Based upon information currently available to Merit's management, Merit estimates that for the year ending December 31, 2016, absent non-recurring transactions, Merit's revenues will be in the range of $587-$597 million, an increase of approximately 8-10%, compared to revenues of $542.1 million for the year ended December 31, 2015.  Also, based on information currently available to Merit's management, Merit estimates that, absent non-recurring transactions, Merit's GAAP earnings per share for 2016 will be in the range of $0.74-$0.80 and non-GAAP earnings per share will be in the range of $0.97-$1.03.

Merit invites all interested parties to participate in its fourth quarter and year-end conference call (conference ID 42311430) today, February 22, 2016, at 5:00 p.m. Eastern (4:00 p.m. Central, 3:00 p.m. Mountain, and 2:00 p.m. Pacific).  The telephone numbers to call are (domestic) 877-313-5341; and (international) 253-336-8671.  A live webcast will also be available at merit.com.

(In thousands)  
 December 31, December 31, 
  2015   2014  
Current Assets    
Cash and cash equivalents$    4,177  $    7,355  
Trade receivables, net   70,292     72,717  
Employee receivables   217     173  
Other receivables   6,799     7,507  
Inventories   105,999     91,773  
Prepaid expenses    5,634     5,012  
Prepaid income taxes   2,955     1,273  
Deferred income tax assets   7,025     6,375  
Income tax refunds receivable   905     155  
Total Current Assets   204,003     192,340  
Property and equipment, net   267,778     244,171  
Other intangibles, net   109,354     110,308  
Goodwill   184,472     184,464  
Deferred income tax assets     9  
Other assets   13,121     15,873  
Total Assets$    778,728  $    747,165  
Current Liabilities    
Trade payables   37,977     29,810  
Accrued expenses   37,846     33,826  
Current portion of long-term debt   10,000     10,000  
Advances from employees   589     381  
Income taxes payable   1,498     1,413  
Total Current Liabilities   87,910     75,430  
Deferred income tax liabilities   10,985     6,385  
Liabilities related to unrecognized tax benefits   768     1,353  
Deferred compensation payable   8,500     8,635  
Deferred credits   2,721     2,891  
Long-term debt   197,593     214,490  
Other long-term obligation   4,148     2,722  
Total Liabilities   312,625     311,906  
Stockholders' Equity    
Common stock   197,826     187,709  
Retained earnings   273,764     249,962  
Accumulated other comprehensive income    (5,487)    (2,412) 
Total stockholders' equity   466,103     435,259  
Total Liabilities and Stockholders' Equity$    778,728  $    747,165  


(Unaudited, in thousands except per share amounts)
 Three Months Ended Twelve Months Ended 
 December 31,  December 31,  
  2015   2014   2015   2014  
SALES$    138,404  $    132,780  $    542,149  $    509,689  
COST OF SALES   78,097     72,646     306,368     284,467  
GROSS PROFIT   60,307     60,134     235,781     225,222  
Selling, general and administrative   40,941     36,212     156,348     147,894  
Research and development   11,421     9,523     40,810     36,632  
Intangible asset impairment charge         1,102  
Contingent consideration benefit   (105)    182     80     (572) 
Acquired in-process research and development         1,000    
Total   52,257     45,917     198,238     185,056  
INCOME FROM OPERATIONS   8,050     14,217     37,543     40,166  
Interest income   62     30     272     217  
Interest (expense)   (1,453)    (1,862)    (6,229)    (8,829) 
Other income (expense)   (105)    (34)    (386)    18  
Total other (expense) - net   (1,496)    (1,866)    (6,343)    (8,594) 
INCOME BEFORE INCOME TAX EXPENSE   6,554     12,351     31,200     31,572  
INCOME TAX EXPENSE   145     3,680     7,398     8,598  
NET INCOME$    6,409  $    8,671  $    23,802  $    22,974  
Basic$    0.14  $    0.20  $    0.54  $    0.53  
Diluted$    0.14  $    0.20  $    0.53  $    0.53  
Basic 44,216   43,411   44,036     43,143  
Diluted 44,642   43,690   44,511     43,409  

Although Merit's financial statements are prepared in accordance with accounting principles which are generally accepted in the United States of America (“GAAP”), Merit's management believes that certain non-GAAP financial measures provide investors with useful information regarding the underlying business trends and performance of Merit's ongoing operations and can be useful for period-over-period comparisons of such operations.  The following table sets forth supplemental financial data and corresponding reconciliations to GAAP financial statements for the three- and twelve-month periods ended December 31, 2015 and 2014.  Readers should consider these non-GAAP measures in addition to, not as a substitute for, financial reporting measures prepared in accordance with GAAP.  These non-GAAP financial measures exclude some, but not all, items that affect Merit's net income. Additionally, these calculations may not be comparable with similarly titled measures of other companies. The non-GAAP income adjustments referenced in the subsequent table do not reflect stock-based compensation expense of approximately $600,000 and $455,000 for the three-month periods ended December 31, 2015 and 2014, respectively, and stock-based compensation of approximately $2.2 million and $1.5 million for the years ended December 31, 2015 and 2014, respectively.  The constant currency revenue adjustments of $2.6 million and $11.3 million for the three- and twelve-month periods ended December 31, 2015, respectively, were calculated using the average foreign exchange rates for 2014.

(Unaudited, in thousands except per share amounts)  
 Three Months Ended Twelve Months Ended 
 December 31,  December 31,  
  2015   2014   2015   2014  
GAAP net income $    6,409  $    8,671  $    23,802  $    22,974  
Acquisition costs   1,841     9     2,305     98  
Severance   1,217       2,934     149  
Termination Fee (a)       800    
Long-term asset impairment charges (b)   42     (27)    141     690   
Intangible asset impairment charge (c)         1,102   
Long-term debt issuance charges   246     248     987     989   
Acquired in-process research and development       1,000    
Amortization of intangible assets        
Cost of sales   2,857     2,785     11,255     11,096  
SG&A expense   910     991     3,563     3,842  
FV adjustment to contingent consideration (d)   (105)    182     80     (572) 
Income tax effect of reconciling items (e)   (2,649)    (1,592)    (8,346)    (6,610) 
Non-GAAP net income $    10,768  $    11,267  $    38,521  $    33,758  
Non-GAAP net income per share$0.24  $0.26  $0.87  $0.78  
Diluted shares used to compute Non-GAAP net income per share     44,642     43,690     44,511     43,409  


(a) Costs associated with the termination of our agreement with a third-party contract manufacturer in Tijuana, Mexico.
(b) Represents abandoned patents and some property and equipment.
(c) Represents impairment charges of certain intangible assets.
(d) Represents changes in the fair value of contingent consideration liabilities for recent acquisitions.
(e) Tax effect of the non-GAAP adjustments.


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 endoscopy.  Merit serves client hospitals worldwide with a domestic and international sales force totaling approximately 200 individuals.  Merit employs approximately 3,850 people worldwide with facilities in South Jordan, Utah; Pearland, Texas; Richmond, Virginia; Malvern, Pennsylvania; Rockland, Massachusetts; Maastricht and Venlo, The Netherlands; Paris, France; Galway, Ireland; Beijing, China; Tijuana, Mexico; Joinville, Brazil; Markham, Ontario, Canada; and Melbourne, Australia.

Statements contained in this release which are not purely historical, including, without limitation, statements regarding our future performance, 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 our Annual Report on Form 10-K for the year ended December 31, 2014. Such risks and uncertainties include risks relating to our potential inability to successfully manage growth through acquisitions, including the inability to commercialize technology acquired through recent, proposed or future acquisitions; costs and expenses associated with our pursuit of a strategic plan to grow through acquisitions; product recalls and product liability claims; potential restrictions on our liquidity or our ability to operate our business by our current credit agreement, and the consequences of any default under that agreement; possible infringement of our technology or the assertion that our technology infringes the rights of other parties; the potential imposition of fines, penalties, or other adverse consequences if our employees or agents violate the U.S. Foreign Corrupt Practices Act or other laws or regulations; expenditures relating to research, development, testing and regulatory approval or clearance of our products and the risk that such products may not be developed successfully or approved for commercial use; greater governmental scrutiny and regulation of the medical device industry; reforms to the 510(k) process administered by the U.S. Food and Drug Administration; laws targeting fraud and abuse in the healthcare industry; potential for significant adverse changes in, or our failure to comply with, governing regulations; availability and pricing of commodity components; negative changes in economic and industry conditions in the United States and other countries; termination, modification or interruption of our relationships with our suppliers, or failure of such suppliers to perform; fluctuations in Euro and GBP exchange rates; our need to generate sufficient cash flow to fund our debt obligations, capital expenditures, and ongoing operations; concentration of our revenues among a few products and procedures; development of new products and technology that could render our existing products obsolete; market acceptance of new products; volatility in the market price of our common stock; modification or limitation of governmental or private insurance reimbursement policies; changes in health care markets related to health care reform initiatives; failures to comply with applicable environmental laws; changes in key personnel; work stoppage or transportation risks; uncertainties associated with potential healthcare policy changes which may have a material adverse effect on Merit; introduction of products in a timely fashion; price and product competition; availability of labor and materials; cost increases; fluctuations in and obsolescence of inventory; and other factors referred to in our Annual Report on Form 10-K for the year ended December 31, 2014, and other materials filed with the Securities and Exchange Commission.  All subsequent forward-looking statements attributable to our company or persons acting on our behalf are expressly qualified in their entirety by these cautionary statements. Actual results will likely 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 we assume no obligation to update or disclose revisions to those estimates. 

Contact: Anne-Marie Wright, Vice President, Corporate Communications
Phone: (801) 208-4167  e-mail: awright@merit.com  Fax: (801) 253-1688