Full Press Release Details
SOUTH JORDAN, Utah, Feb. 18, 2010 (GLOBE NEWSWIRE) -- Merit Medical Systems, Inc. (Nasdaq:MMSI), 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% 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% 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% of sales for the year ended December 31, 2009, compared to 41.1% 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%.
Earnings for the fourth quarter of 2009 were $5.1 million, down 6% 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% 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% and we surpassed our initial forecast of EN Snare devices by more than 50%. 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%; stand-alone device sales rose 12%; custom kit and tray sales increased 12%; and inflation device sales fell 1%. 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% 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%; stand-alone device sales increased 13%; custom kit and tray sales grew 9%; and inflation device sales increased 9% due partially to increased deliveries to the OEM customer described above. Excluding sales to that OEM customer, inflation device sales were up 4% for the fourth quarter of 2009, compared to the fourth quarter of 2008.
Selling, general and administrative expenses were 25.0% and 25.2% of sales for the fourth quarter and year ended December 31, 2009, respectively, compared with 22.2% and 23.4% of sales for the comparable periods of 2008, respectively.
Research and development costs were 4.3% of sales for both the fourth quarter and year ended December 31, 2009, compared to 4.1% and 4.0% 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% and 31.9%, respectively, compared to 36.9% and 34.9% 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.
| INCOME STATEMENT | ||||
| (Unaudited, in thousands except per share amounts) | ||||
| Three Months Ended | Twelve Months Ended | |||
| December 31, | December 31, | |||
| 2009 | 2008 | 2009 | 2008 | |
| SALES | $ 67,495 | $ 57,996 | $ 257,462 | $ 227,143 |
| COST OF SALES | 40,179 | 34,503 | 148,660 | 133,872 |
| GROSS PROFIT | 27,316 | 23,493 | 108,802 | 93,271 |
| OPERATING EXPENSES | ||||
| Selling, general and administrative | 16,891 | 12,887 | 64,787 | 53,127 |
| Research and development | 2,904 | 2,404 | 11,168 | 9,160 |
| Total | 19,795 | 15,291 | 75,955 | 62,287 |
| INCOME FROM OPERATIONS | 7,521 | 8,202 | 32,847 | 30,984 |
| OTHER INCOME | ||||
| Interest income | 14 | 286 | 178 | 781 |
| Other income | 66 | 55 | 69 | 80 |
| Total other income - net | 80 | 341 | 247 | 861 |
| INCOME BEFORE INCOME TAX EXPENSE | 7,601 | 8,543 | 33,094 | 31,845 |
| INCOME TAX EXPENSE | 2,534 | 3,151 | 10,564 | 11,118 |
| NET INCOME | $ 5,067 | $ 5,392 | $ 22,530 | $ 20,727 |
| EARNINGS PER SHARE-- | ||||
| Basic | $ 0.18 | $ 0.19 | $ 0.80 | $ 0.75 |
| Diluted | $ 0.18 | $ 0.19 | $ 0.79 | $ 0.73 |
| AVERAGE COMMON SHARES-- | ||||
| Basic | 28,091 | 28,070 | 28,011 | 27,769 |
| Diluted | 28,761 | 28,750 | 28,606 | 28,550 |
| BALANCE SHEET | ||
| (Unaudited in thousands) | ||
| December 31, | December 31, | |
| 2009 | 2008 | |
| ASSETS | ||
| Current Assets | ||
| Cash and cash equivalents | $ 6,133 | $ 34,030 |
| Trade receivables, net | 30,954 | 27,749 |
| Employee receivables | 145 | 126 |
| Other receivables | 827 | 818 |
| Inventories | 47,170 | 38,358 |
| Prepaid expenses and other assets | 1,801 | 985 |
| Deferred income tax assets | 3,289 | 2,782 |
| Income tax refunds receivable | 835 | 607 |
| Total Current Assets | 91,154 | 105,455 |
| Property and equipment, net | 114,646 | 103,939 |
| Other intangibles, net | 26,898 | 6,913 |
| Goodwill | 33,002 | 13,048 |
| Other assets | 5,813 | 2,325 |
| Deferred income tax assets | -- | 23 |
| Deposits | -- | 73 |
| Total Assets | $ 271,513 | $ 231,776 |
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||
| Current Liabilities | ||
| Trade payables | 13,352 | 10,622 |
| Accrued expenses | 12,196 | 9,973 |
| Advances from employees | 212 | 211 |
| Line of credit | 7,000 | -- |
| Income taxes payable | 148 | 366 |
| Total Current Liabilities | 32,908 | 21,172 |
| Deferred income tax liabilities | 11,251 | 8,771 |
| Liabilities related to unrecognized tax positions | 2,945 | 2,818 |
| Deferred compensation payable | 3,382 | 2,348 |
| Deferred credits | 1,874 | 1,994 |
| Other long-term obligation | 344 | 368 |
| Total Liabilities | 52,704 | 37,471 |
| Stockholders' Equity | ||
| Common stock | 63,690 | 61,689 |
| Retained earnings | 155,204 | 132,674 |
| Accumulated other comprehensive loss | (85) | (58) |
| Total stockholders' equity | 218,809 | 194,305 |
| Total Liabilities and Stockholders' Equity | $ 271,513 | $ 231,776 |
Merit invites all interested parties to participate in its fourth quarter and year-end conference call today, February 18th, 2010, 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 (877) 941-0844, and the international number is (480) 629-9645. 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.
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, primarily in cardiology, radiology and gastroenterology. Merit serves client hospitals worldwide with a domestic and international sales force totaling approximately 125 individuals. Merit employs approximately 1,880 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: healthcare policy changes which may have a material adverse effect on Merit; 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 effect 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, including the inability to commercialize the Vysera technology as currently anticipated; 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; 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 force majeure events on Merit's business, 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.