QuickLinks -- Click here to rapidly navigate through this documentExhibit 99.1
1600 West Merit Parkway • South Jordan, UT 84095
Telephone: 801-253-1600 • Fax: 801-253-1688
PRESS RELEASE
FOR IMMEDIATE RELEASE
| Date: | | April 21, 2005 |
| Contact: | | Anne-Marie Wright, Director of Corporate Communications |
| Phone: | | (801) 208-4167 E-mail: awright@merit.com Fax: (801) 253-1681 |
MERIT MEDICAL SYSTEMS REPORTS RECORD REVENUES
FOR FIRST QUARTER 2005
SOUTH JORDAN, UTAH—Merit Medical Systems, Inc. (NASDAQ:NMS:MMSI), a leading manufacturer and marketer of proprietary disposable accessories used primarily in cardiology and radiology procedures, today reported net income of $4.1 million, or $0.15 per share, on record revenues of $40.3 million, up 7% for its quarter ended March 31, 2005. For the comparable quarter of 2004, the Company reported net income of $4.4 million, or $0.16 per share, on revenues of $37.7 million. Earnings per share for the first quarter of 2005 were negatively impacted by a one-time buy-out of a distribution agreement and severance for two employees for a total of approximately $227,000 (net of tax), or $0.01 per share.
"Merit is actively developing the ability to provide full service in cardiology and radiology with our 'stick to stitch' strategy," said Fred P. Lampropoulos, Merit's Chairman and Chief Executive Officer. "As we plan for future growth, we continue to invest in the completion of new facilities and the introduction of many significant products this year."
All product categories of Merit's business contributed to revenue growth in the first quarter of 2005. Compared to the first quarter of 2004, custom kit sales increased 6%; catheter sales rose 6%; inflation device sales grew 5%; stand-alone device sales went up 5%; and procedure trays, a new category, contributed more than 1% to sales.
Gross margins were down slightly from 43.6% of sales in the first quarter of 2004 to 43.4% of sales in the first quarter of 2005, due primarily to Merit's newly acquired procedure tray business in Richmond, Virginia.
Selling, general and administrative expenses were 24.1% of sales for the first quarter of 2005, compared with 22.7% of sales in the previous year's comparable period. The increase in the first quarter of 2005 was primarily the result of costs associated with the buy-out of a distribution agreement and severance for two employees mentioned above.
Research and development costs for the first quarter of 2005 were 3.8% of sales, compared with 3.2% of sales for the same period last year. The increase in the first quarter of 2005 can be attributed to additional staff and expenses to support the launch of new products. Total operating expenses increased as a percentage of sales to 27.9%, compared with 25.8% for the same period of 2004.
Merit's effective tax rate for the three-month period ended March 31, 2005 was 36.0%, compared with 36.7% for the comparable period of 2004.
The Company's cash on hand was $28.6 million as of March 31, 2005. This cash balance is net of $4.7 million spent during the three months ended March 31, 2005 on land and construction of new facilities in South Jordan, Utah.
INCOME STATEMENT
(Unaudited, in thousands except per share data)
| | Three Months Ended March 31,
| |
|---|
| | 2005
| | 2004
| |
|---|
| SALES | | $ | 40,274 | | $ | 37,663 | |
| COST OF SALES | | | 22,813 | | | 21,230 | |
| | |
| |
| |
| GROSS PROFIT | | | 17,461 | | | 16,433 | |
OPERATING EXPENSES |
|
|
|
|
|
|
|
| | Selling, general and administrative | | | 9,707 | | | 8,536 | |
| | Research and development | | | 1,547 | | | 1,191 | |
| | |
| |
| |
| | | Total | | | 11,254 | | | 9,727 | |
INCOME FROM OPERATIONS |
|
|
6,207 |
|
|
6,706 |
|
OTHER INCOME (EXPENSE) |
|
|
|
|
|
|
|
| | Litigation settlement | | | | | | 100 | |
| | Interest income | | | 182 | | | 123 | |
| | Miscellaneous expense | | | (21 | ) | | (16 | ) |
| | |
| |
| |
| | | Total Other Income—net | | | 161 | | | 207 | |
INCOME BEFORE INCOME TAX EXPENSE |
|
|
6,368 |
|
|
6,913 |
|
INCOME TAX EXPENSE |
|
|
2,294 |
|
|
2,537 |
|
| | |
| |
| |
| NET INCOME | | $ | 4,074 | | $ | 4,376 | |
| | |
| |
| |
| EARNINGS PER SHARE | | | | | | | |
| | Basic | | $ | 0.15 | | $ | 0.17 | |
| | |
| |
| |
| | Diluted | | $ | 0.15 | | $ | 0.16 | |
| | |
| |
| |
| AVERAGE COMMON SHARES | | | | | | | |
| | Basic | | | 26,506,733 | | | 26,057,803 | |
| | |
| |
| |
| | Diluted | | | 27,598,050 | | | 27,771,834 | |
| | |
| |
| |
BALANCE SHEET
(Unaudited in thousands)
| | March 31,
2005
| | December 31,
2004
| |
|---|
| ASSETS | | | | | | | |
| Current Assets | | | | | | | |
| | Cash and cash equivalents | | $ | 28,617 | | $ | 33,037 | |
| | Trade receivables, net | | | 20,544 | | | 19,724 | |
| | Employee and other receivables | | | 203 | | | 157 | |
| | Inventories | | | 24,493 | | | 23,096 | |
| | Prepaid and other assets | | | 741 | | | 797 | |
| | Deferred income tax assets | | | 38 | | | 56 | |
| | |
| |
| |
| | | Total Current Assets | | | 74,636 | | | 76,867 | |
| Property and equipment, net | | | 61,227 | | | 52,492 | |
| Other intangibles, net | | | 2,767 | | | 1,990 | |
| Goodwill | | | 5,717 | | | 5,570 | |
| Other assets | | | 1,856 | | | 1,822 | |
| Note receivable | | | | | | 1,000 | |
| Deposits | | | 137 | | | 136 | |
| | |
| |
| |
| Total Assets | | $ | 146,340 | | $ | 139,877 | |
| | |
| |
| |
| LIABILITIES AND STOCKHOLDERS' EQUITY | | | | | | | |
| Current Liabilities | | | | | | | |
| | Current portion of long-term debt | | $ | 5 | | $ | 7 | |
| | Trade payables | | | 12,359 | | | 10,728 | |
| | Accrued expenses | | | 7,667 | | | 8,467 | |
| | Advances from employees | | | 146 | | | 221 | |
| | Deferred income tax liabilities | | | 449 | | | 227 | |
| | Income taxes payable | | | 3,237 | | | 2,273 | |
| | |
| |
| |
| | | Total Current Liabilities | | | 23,863 | | | 21,923 | |
| Deferred income tax liabilities | | | 2,412 | | | 2,580 | |
| Long-term debt | | | 5 | | | 5 | |
| Deferred compensation payable | | | 1,918 | | | 1,702 | |
| Deferred credits | | | 2,561 | | | 2,615 | |
| Other liabilities | | | 138 | | | | |
| | |
| |
| |
| | | Total Liabilities | | | 30,897 | | | 28,825 | |
| Stockholders' Equity | | | | | | | |
| | Common stock | | | 42,887 | | | 42,559 | |
| | Retained earnings | | | 72,965 | | | 68,891 | |
| | Accumulated other comprehensive loss | | | (409 | ) | | (398 | ) |
| | |
| |
| |
| | | Total stockholders' equity | | | 115,443 | | | 111,052 | |
| | |
| |
| |
| Total Liabilities and Stockholders' Equity | | $ | 146,340 | | $ | 139,877 | |
| | |
| |
| |
CONFERENCE CALL
Merit Medical invites all interested parties to join its officers in its first quarter earnings conference call to be held today, April 21, 2005, 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) 866-249-2157 and (international) 303-262-2006.
A live webcast as well as a rebroadcast of the conference call will be available at www.merit.com and www.fulldisclosure.com. To listen to the live broadcast, please enter the site 10-15 minutes prior to the call in order to download any necessary media players. To access the webcast, click on the "CCBN Webcast" logo on the lower right-hand corner of Merit's home page. The webcast will be archived on both sites. There is no other replay access to the call.
ABOUT MERIT
Founded in 1987, Merit Medical Systems, Inc. is engaged in the development, manufacture and distribution of proprietary disposable medical accessories used in interventional and diagnostic procedures, particularly in cardiology and radiology. Merit serves client hospitals worldwide with a domestic and international sales force totaling approximately 70 individuals. Merit employs approximately 1,360 people worldwide, with manufacturing facilities in Salt Lake City and South Jordan, Utah; Santa Clara, California; Angleton, Texas; Richmond, Virginia; Maastricht, The Netherlands; and Galway, Ireland.
Statements contained in this release which are not purely historical are forward-looking statements within the meaning of the Private Securities Litigation 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, 2004. Such risks and uncertainties include, market acceptance of new products, introduction of products in a timely fashion, product recalls, delays in obtaining regulatory approvals, or the failure to maintain such approvals, cost increases, fluctuations in and obsolescence of inventory, price and product competition, availability of labor and materials, development of new products and technology that could render or products obsolete, product liability claims, modification or limitation of governmental or private insurance reimbursement, infringement of our technology or the assertion that our technology infringes the rights of other parties, foreign currency fluctuations, challenges associated with the Company's growth strategy, changes in health care markets related to healthcare reform initiatives, litigation and other factors referred to in the Company's 10-K and other reports filed with the Securities and Exchange Commission. All subsequent forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these cautionary statements. Actual results 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.
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MERIT MEDICAL SYSTEMS REPORTS RECORD REVENUES FOR FIRST QUARTER 2005
