Articles
3 September 2010

Merit Medical Reports Record Sales And Earnings

by PR or News Wire

03 September 2010—

Merit Medical Systems, Inc., 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 percent 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 percent 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 percent of sales for the year ended December 31, 2009, compared to 41.1 percent 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 percent.

Earnings for the fourth quarter of 2009 were $5.1 million, down 6 percent 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 percent 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 percent and we surpassed our initial forecast of EN Snare® devices by more than 50 percent.  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 percent; stand-alone device sales rose 12 percent; custom kit and tray sales increased 12 percent; and inflation device sales fell 1 percent.  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 percent 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 percent; stand-alone device sales increased 13 percent; custom kit and tray sales grew 9 percent; and inflation device sales increased 9 percent due partially to increased deliveries to the OEM customer described above.  Excluding sales to that OEM customer, inflation device sales were up 4 percent for the fourth quarter of 2009, compared to the fourth quarter of 2008. 

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

Research and development costs were 4.3 percent of sales for both the fourth quarter and year ended December 31, 2009, compared to 4.1 percent and 4.0 percent 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 percent and 31.9 percent, respectively, compared to 36.9 percent and 34.9 percent 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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