Merit Medical Reports Fourth Quarter and Full Year 2024 Results and Issues Fiscal Year 2025 Guidance

Fourth Quarter Highlights†

Reported revenue of $355.2 million, up 9.4%

Constant currency revenue* and constant currency revenue, organic* up 10.1% and up 6.1%, respectively

GAAP operating margin of 10.3%, compared to 10.4% in prior year period

Non-GAAP operating margin* of 19.6%, compared to 16.6% in prior year period

GAAP EPS $0.46, down 2.6%,

Non-GAAP EPS* $0.93, up 25.8%, and

Free cash flow* generation of $65.3 million, up 18.4%

Fiscal Year 2024 Highlights†

Reported revenue of $1.357 billion, up 7.9%

Constant currency revenue* and constant currency revenue, organic* up 8.5% and up 6.0%, respectively

GAAP operating margin of 11.5 %, compared to 9.9% in prior year

Non-GAAP operating margin* of 19.0%, compared to 17.2% in prior year

GAAP EPS $2.03, up 25.3%,

Non-GAAP EPS* $3.46, up 21.3%, and

Free cash flow* generation of $185.7 million, up 67.5%

Fourth Quarter Business Developments

Completed the acquisition of lead management portfolio of medical devices and certain related assets from Cook Medical Holdings, LLC

Announced FDA premarket approval of the Wrapsody® Cell-Impermeable Endoprosthesis device, which is intended to extend long-term vessel patency in dialysis patients

Substantially completed integration of the production, distribution and sale of the EsophyX® Z+ device previously acquired from Endogastric Solutions, Inc.

Fiscal Year 2025 Guidance

Revenue of $1.470 billion to $1.490 billion, up 8% - 10% year-over-year

Non-GAAP EPS of $3.58 to $3.70, up 4% - 7% year-over-year

† Comparisons noted in the bullet points are calculated for the current quarter compared with the fourth quarter of 2023 or for the current year compared with fiscal year 2023, as applicable, unless otherwise specified. Amounts in this release are rounded while percentages are calculated from the underlying amounts.

* Constant currency revenue; constant currency revenue, organic; non-GAAP gross profit and margin; non-GAAP operating income and margin; non-GAAP net income; non-GAAP EPS; and free cash flow figures (used here and below) are non-GAAP financial measures. A reconciliation of these financial measures to their most directly comparable GAAP financial measures is included under the heading “Non-GAAP Financial Measures” below.

SOUTH JORDAN, Utah, Feb. 25, 2025 (GLOBE NEWSWIRE) -- Merit Medical Systems, Inc. (NASDAQ: MMSI), a leading global manufacturer and marketer of healthcare technology, today announced revenue of $355.2 million for the quarter ended December 31, 2024, an increase of 9.4% compared to the quarter ended December 31, 2023. Constant currency revenue for the fourth quarter of 2024 increased 10.1% compared to the prior year period and increased 6.1% compared to the prior year period on a constant currency revenue, organic, basis. Revenue for the year ended December 31, 2024 was $1.357 billion, an increase of 7.9% compared to the year ended December 31, 2023. Constant currency revenue for 2024 increased 8.5% compared to the prior year and increased 6.0% compared to the prior year on a constant currency revenue, organic, basis.

“We finished 2024 with strong momentum by delivering better-than-expected financial results in the fourth quarter, reflecting continued strong execution,” said Fred P. Lampropoulos, Merit’s Chairman and Chief Executive Officer. “Our constant currency revenue, organic, and our constant currency total revenue exceeded the high-end of our expectations in the fourth quarter. We delivered impressive year-over-year improvements in our non-GAAP operating margin and our non-GAAP earnings per share, which increased 305 basis points and 26%, respectively, year-over-year. We also delivered strong free cash flow generation in the fourth quarter and generated more than $185 million in fiscal year 2024, representing an increase of 67% year-over-year.”

Mr. Lampropoulos continued: “We are introducing 2025 financial guidance which reflects confidence in our team’s ability to deliver continued strong execution, stable constant currency growth, improving profitability and solid free cash flow generation. We also remain focused on our Continued Growth Initiatives Program and on achieving the related financial targets for the three-year period ending December 31, 2026.”

Merit’s revenue by operating segment and product category for the three and twelve-month periods ended December 31, 2024 and 2023 was as follows (unaudited; in thousands, except for percentages):

Merit’s GAAP gross margin for the fourth quarter of 2024 was 48.7%, compared to GAAP gross margin of 46.4% for the fourth quarter of 2023. Merit’s non-GAAP gross margin* for the fourth quarter of 2024 was 53.5%, compared to non-GAAP gross margin* of 50.4% for the fourth quarter of 2023. GAAP gross margin for fiscal year 2024 was 47.4%, compared to GAAP gross margin of 46.4% for fiscal year 2023. Non-GAAP gross margin* for fiscal year 2024 was 51.7%, compared to non-GAAP gross margin* of 50.4% for fiscal year 2023.

Merit’s GAAP net income for the fourth quarter of 2024 was $27.9 million, or $0.46 per share, compared to GAAP net income of $27.6 million, or $0.47 per share, for the fourth quarter of 2023. Merit’s non-GAAP net income* for the fourth quarter of 2024 was $56.3 million, or $0.93 per share, compared to non-GAAP net income* of $43.1 million, or $0.74 per share, for the fourth quarter of 2023. GAAP net income for fiscal year 2024 was $120.4 million, or $2.03 per share, compared to GAAP net income of $94.4 million, or $1.62 per share, for fiscal year 2023. Non-GAAP net income* for fiscal year 2024 was $205.4 million, or $3.46 per share, compared to non-GAAP net income* of $166.5 million, or $2.85 per share, for fiscal year 2023.

As of December 31, 2024, Merit had cash and cash equivalents of $376.7 million, total debt obligations of $747.5 million, and outstanding letter of credit guarantees of $2.9 million, compared to cash and cash equivalents of $587 million, total debt obligations of $846.6 million, and outstanding letter of credit guarantees of $2.7 million as of December 31, 2023. Merit had additional available borrowing capacity of approximately $697 million as of December 31, 2024.

Fiscal Year 2025 Financial Guidance

Based upon the information currently available to Merit’s management, for the year ending December 31, 2025, absent material acquisitions, non-recurring transactions or other factors beyond Merit’s current expectations, Merit anticipates the following financial results:

Revenue and Earnings Guidance*

*Percentage figures approximated; dollar figures may not foot due to rounding

**Merit’s non-GAAP earnings per share reflect the dilutive impact of its 3.00% Convertible Senior Notes due 2029 (the “Convertible Notes”) calculated using the if-converted method of approximately $.02 and $0.11 for the years ending December 31, 2024 and 2025 respectively. Any offsetting impacts of the capped call associated with the Convertible Notes are not considered.

2025 Net Sales Guidance - % Change from Prior Year (Constant Currency) Reconciliation*

*Percentage figures approximated and may not foot due to rounding

Merit does not provide guidance for GAAP reported financial measures (other than revenue) or a reconciliation of forward-looking non-GAAP financial measures to the most directly comparable GAAP reported financial measures (other than revenue) because Merit is unable to predict with reasonable certainty the financial impact of various items which could impact Merit’s future financial results, such as expenses related to acquisitions or other extraordinary transactions, non-cash expenses related to amortization or write-off of previously acquired tangible and intangible assets, certain employee termination benefits, performance-based stock compensation expenses, expenses resulting from non-ordinary course litigation or administrative proceedings and resulting settlements, governmental proceedings, and changes in governmental or industry regulations. These items are uncertain, depend on various factors, and could have a material impact on GAAP reported results for the guidance period. For the same reasons, Merit is unable to address the significance of the unavailable information, which could be material to future results. Specifically, Merit is not, without unreasonable effort, able to reliably predict the impact of these items and Merit believes inclusion of a reconciliation of these forward-looking non-GAAP measures to their GAAP counterparts could be confusing to investors or cause undue reliance.

Merit’s financial guidance for the year ending December 31, 2025 is subject to risks and uncertainties identified in this release and Merit’s filings with the U.S. Securities and Exchange Commission (the “SEC”).

Merit will hold its investor conference call today, Tuesday, February 25, 2025, at 5:00 p.m., Eastern Time. To access the conference call, please pre-register using the following link. Registrants will receive confirmation with dial-in details. A live webcast and slide deck will also be available at merit.com.

Non-GAAP Financial Measures

Although Merit’s financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”), Merit’s management believes that the non-GAAP financial measures referenced in this release may 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. Non-GAAP financial measures used in this release include:

constant currency revenue;

constant currency revenue, organic;

non-GAAP gross profit and margin;

non-GAAP operating income and margin;

non-GAAP net income;

non-GAAP earnings per share; and

Merit’s management team uses these non-GAAP financial measures to evaluate Merit’s profitability and efficiency, to compare operating and financial results to prior periods, to evaluate changes in the results of its operating segments, and to measure and allocate financial resources internally. However, Merit’s management does not consider such non-GAAP measures in isolation or as an alternative to measures determined in accordance with GAAP.

Readers should consider non-GAAP measures used in this release in addition to, not as a substitute for, financial reporting measures prepared in accordance with GAAP. These non-GAAP financial measures generally exclude some, but not all, items that may affect Merit’s net income. In addition, they are subject to inherent limitations as they reflect the exercise of judgment by management about which items are excluded. Merit believes it is useful to exclude such items in the calculation of non-GAAP gross profit and margin, non-GAAP operating income and margin, non-GAAP net income, and non-GAAP earnings per share (in each case, as further illustrated in the reconciliation tables below) because such amounts in any specific period may not directly correlate to the underlying performance of Merit’s business operations and can vary significantly between periods as a result of factors such as acquisition or other extraordinary transactions, non-cash expenses related to amortization or write-off of previously acquired tangible and intangible assets, certain employee termination benefits, expenses resulting from non-ordinary course litigation or administrative proceedings and resulting settlements, governmental proceedings or changes in tax or industry regulations, gains or losses on disposal of certain assets, and debt issuance costs. Merit may incur similar types of expenses in the future, and the non-GAAP financial information included in this release should not be viewed as a statement or indication that these types of expenses will not recur. Additionally, the non-GAAP financial measures used in this release may not be comparable with similarly titled measures of other companies. Merit urges readers to review the reconciliations of its non-GAAP financial measures to their most directly comparable GAAP financial measures included herein, and not to rely on any single financial measure to evaluate Merit’s business or results of operations.

Constant Currency Revenue

Merit’s constant currency revenue is prepared by converting the current-period reported revenue of subsidiaries whose functional currency is a currency other than the U.S. dollar at the applicable foreign exchange rates in effect during the comparable prior-year period and adjusting for the effects of hedging transactions on reported revenue, which are recorded in the U.S. dollar. The constant currency revenue adjustments of $2.2 million and $7.2 million to reported revenue for the three and twelve-month periods ended December 31, 2024, respectively, were calculated using the applicable average foreign exchange rates for the three and twelve-month periods ended December 31, 2023.

Constant Currency Revenue, Organic

Merit’s constant currency revenue, organic, is defined, with respect to prior fiscal year periods, as GAAP revenue. With respect to current fiscal year periods, constant currency revenue, organic, is defined as constant currency revenue (as defined above), less revenue from certain acquisitions. For the three-month period ended December 31, 2024, Merit’s constant currency revenue, organic, excludes revenues attributable to (i) the assets acquired from Cook Medical Holdings, LLC (“Cook Medical”) in November 2024 and (ii) the assets acquired from EndoGastric Solutions, Inc. (“EGS”) in July 2024. For the twelve-month period ended December 31, 2024, Merit’s constant currency revenue, organic, excludes revenues attributable to (a) the assets acquired from EGS in July 2024, (b) the assets acquired from Cook Medical in November 2024 and (c) the assets acquired from AngioDynamics, Inc. in June 2023.

Non-GAAP Gross Profit and Margin

Non-GAAP gross profit is calculated by reducing GAAP cost of sales by amounts recorded for amortization of intangible assets, corporate restructuring charges, and inventory mark-up related to acquisitions. Non-GAAP gross margin is calculated by dividing non-GAAP gross profit by reported net sales.

Non-GAAP Operating Income and Margin

Non-GAAP operating income is calculated by adjusting GAAP operating income for certain items which are deemed by Merit’s management to be outside of core operations and vary in amount and frequency among periods, such as expenses related to acquisitions or other extraordinary transactions, non-cash expenses related to amortization or write-off of previously acquired tangible and intangible assets, certain employee termination benefits, performance-based stock compensation expenses, expenses resulting from non-ordinary course litigation or administrative proceedings and resulting settlements, governmental proceedings, and changes in governmental or industry regulations, as well as other items referenced in the tables below. Non-GAAP operating margin is calculated by dividing non-GAAP operating income by reported net sales.

Non-GAAP net income is calculated by adjusting GAAP net income for the items set forth in the definition of non-GAAP operating income above, as well as for expenses related to debt issuance costs, gains or losses on disposal of certain assets and other items set forth in the tables below.

Non-GAAP EPS is defined as non-GAAP net income divided by the diluted shares outstanding for the corresponding period.

Free cash flow is defined as cash flow from operations calculated in accordance with GAAP, less capital expenditures for property and equipment calculated in accordance with GAAP, as set forth in the consolidated statement of cash flows.

Non-GAAP Financial Measure Reconciliations

The following tables set forth supplemental financial data and corresponding reconciliations of non-GAAP financial measures to Merit’s corresponding financial measures prepared in accordance with GAAP, in each case, for the three and twelve-month periods ended December 31, 2024 and 2023. The non-GAAP income adjustments referenced in the following tables do not reflect non-performance-based stock compensation expense of approximately $3.7 million and $3.5 million for the three-month periods ended December 31, 2024 and 2023, respectively and $13.2 million and $12.7 million for the twelve-month periods ended December 31, 2024 and 2023, respectively.

Reconciliation of GAAP Net Income to Non-GAAP Net Income

(Unaudited, in thousands except per share amounts)

_________________________

Note: Certain per-share impacts may not sum to totals due to rounding.

Reconciliation of GAAP Net Income to Non-GAAP Net Income

(Unaudited; in thousands except per share amounts)

_________________________

Note: Certain per-share impacts may not sum to totals due to rounding.

Reconciliation of Reported Operating Income to Non-GAAP Operating Income

(Unaudited, in thousands except percentages)

_________________________

Note: Certain percentages may not sum to totals due to rounding.

Reconciliation of Reported Revenue to Constant Currency Revenue (Non-GAAP), and Constant Currency Revenue, Organic (Non-GAAP)

(Unaudited, in thousands except percentages)

_________________________

(a) A non-GAAP financial measure. For a definition of this and other non-GAAP financial measures, see the section of this release entitled “Non-GAAP Financial Measures.”

Reconciliation of Reported Gross Margin to Non-GAAP Gross Margin (Non-GAAP)

(Unaudited, as a percentage of reported revenue)

_________________________

Note: Certain percentages may not sum to totals due to rounding.