Full Press Release Details
SOUTH JORDAN, Utah, April 28, 2009 (GLOBE NEWSWIRE) -- Merit Medical Systems, Inc. (Nasdaq:MMSI), a leading manufacturer and marketer of proprietary disposable medical devices used in interventional and diagnostic procedures, particularly in cardiology, radiology and gastroenterology, today announced record sales of $58.4 million for the quarter ended March 31, 2009, an increase of 9% over sales of $53.6 million for the first quarter of 2008.
Net income for the first quarter of 2009 increased 28% to $5.5 million, or $0.19 per share, compared to net income of $4.3 million, or $0.15 per share, for the first quarter of 2008.
"During the first quarter we accomplished our goal of closing the Alveolus, Inc. and Biosearch Medical Products, Inc. transactions. We believe the technology and intellectual property acquired in these transactions will facilitate growth and opportunity in our new Merit Endotek(tm) division," said Fred P. Lampropoulos, Merit's Chairman and Chief Executive Officer. "Despite the worldwide economic slowdown and financial turmoil, Merit posted gains in sales and gross margins. Excluding sales of our largest OEM customer, our OEM sales grew 41%. We believe this was a result of efficient staffing and aggressive marketing of Merit's broad line of products for customers looking for stability and value."
Gross margins for the first quarter of 2009 were up 220 basis points to 42.5% of sales, compared to 40.3% of sales for the first quarter of 2008. The improvement in gross margins was primarily the result of overhead and manufacturing efficiencies attributable to higher production volumes, reduced material costs, and a favorable Euro to dollar exchange rate, which reduced costs in Merit's facility in Galway, Ireland.
Selling, general and administrative expenses for the first quarter of 2009 were 25.4% of sales, compared to 24.4% of sales for the first quarter of 2008. Approximately 130 basis points of the increase in SG&A expenses were related to acquiring the assets of Alveolus and operating the former Alveolus business during the last three weeks of the quarter ended March 31, 2009. Research and development costs were 3.6% of sales for both the first quarter of 2009 and the first quarter of 2008.
Income from operations for the quarter ended March 31, 2009 was $7.9 million, compared to $6.6 million for the first quarter of 2008.
For the first quarter of 2009, compared to the first quarter of 2008, catheter sales increased 25%; custom kit and tray sales rose 10%; stand-alone device sales grew 9%; and inflation device sales fell 4%. Inflation device sales were affected by deliveries of inflation devices to an OEM customer.
Merit's effective tax rate for the first quarter of 2009 was 31.4%, compared with 36.0% for the comparable period of 2008. This lower tax rate is primarily a result of higher profits in Merit's Irish facility, which are taxed at a lower rate.
Merit's cash position was $16.4 million on March 31, 2009, compared with $34.0 million on December 31, 2008. Approximately $20.2 million was paid from cash reserves during the first quarter of 2009 to acquire the assets of Alveolus and Biosearch, and $2.5 million was spent to repurchase outstanding shares of Merit's common stock.
Merit Medical invites all interested parties to participate in its conference call today, April 28, 2009, 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 800-240-4186, and the international number is 303-262-2137. A live webcast as well as a rebroadcast of the conference call can be accessed through the Investors page at www.merit.com or through the webcasts tab at www.fulldisclosure.com.
(Unaudited, in thousands except per share amounts)
SALES $ 58,371 $ 53,553
COST OF SALES 33,563 31,961
GROSS PROFIT 24,808 21,592
Selling, general and administrative 14,829 13,072
Research and development 2,079 1,916
INCOME FROM OPERATIONS 7,900 6,604
OTHER INCOME (EXPENSE)
Interest income 122 150
Other income (expense) 52 (5)
Total Other Income - net 174 145
INCOME BEFORE INCOME TAXES 8,074 6,749
INCOME TAX EXPENSE 2,537 2,432
NET INCOME $ 5,537 $ 4,317
EARNINGS PER COMMON SHARE-
Diluted $ 0.19 $ 0.15
AVERAGE COMMON SHARES-
Diluted 28,547 28,301
(Unaudited in thousands)
Cash and cash equivalents $ 16,430 $ 34,030
Trade receivables, net 29,794 27,749
Employee receivables 115 126
Other receivables 711 818
Inventories 42,953 38,358
Prepaid expenses and other assets 1,184 985
Deferred income tax assets 2,779 2,782
Income tax refunds receivable 626 607
Total Current Assets 94,592 105,455
Property and equipment, net 105,748 103,939
Other intangibles, net 17,344 6,913
Goodwill 21,124 13,048
Other assets 2,181 2,325
Deferred income tax assets 35 23
Total Assets $241,150 $231,776
LIABILITIES AND STOCKHOLDERS' EQUITY
Trade payables 13,724 10,622
Accrued expenses 11,020 9,973
Advances from employees 314 211
Income taxes payable 2,109 366
Total Current Liabilities 27,167 21,172
Deferred income tax liabilities 8,782 8,771
Liabilities related to unrecognized tax positions 2,818 2,818
Deferred compensation payable 2,205 2,348
Deferred credits 1,967 1,994
Other long-term obligation 395 368
Total Liabilities 43,334 37,471
Stockholders' Equity
Common stock 59,732 61,689
Retained earnings 138,211 132,674
Accumulated other comprehensive loss (127) (58)
Total stockholders' equity 197,816 194,305
Total Liabilities and Stockholders' Equity $241,150 $231,776
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 gastroenterology. Merit serves client hospitals worldwide with a domestic and international sales force totaling approximately 100 individuals. Merit employs approximately 1,780 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.globenewswire.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 Reform 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, 2008. Such risks and uncertainties include risks relating to: infringement of Merit's technology or the assertion that Merit's technology infringes the rights of other parties; downturn of the national economy and its affect on Merit's revenues, collections and supplier relations; termination of supplier relationships, or failure of suppliers to perform; product recalls and product liability claims; delays in obtaining regulatory approvals, or the failure to maintain such approvals; inability to successfully manage growth through acquisitions; 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; impact of Merit's business by force majeure factors, including severe weather conditions; failure to comply with applicable environmental laws and other factors referred to in Merit's Annual Report on Form 10-K for the year ended December 31, 2008, 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 will 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 Merit assumes no obligation to update or disclose revisions to those estimates.