Exhibit 99.1
1600 West Merit Parkway · South Jordan, UT 84095
Telephone: 801-253-1600 · Fax: 801-253-1688
PRESSRELEASE
FOR IMMEDIATE RELEASE
Date: | February 5, 2009 |
Contact: | Anne-Marie Wright, Vice President, Corporate Communications |
Phone: | (801) 208-4167 e-mail: awright@merit.com Fax: (801) 253-1688 |
MERIT MEDICAL REPORTS RECORD SALES AND EARNINGS
FOR THE YEAR ENDED DECEMBER 31, 2008
SOUTH JORDAN, UTAH— Merit Medical Systems, Inc. (NASDAQ: MMSI), a manufacturer and marketer of proprietary disposable devices used primarily in cardiology and radiology procedures, today announced record revenues of $227.1 million for the year ended December 31, 2008, an increase of 9% over revenues of $207.8 million for the year ended December 31, 2007.
Earnings for the year ended December 31, 2008 were a record $20.7 million, up 33% compared to $15.6 million for the year ended December 31, 2007. Earnings per share for the year 2008 were $0.73, up from $0.55 per share for the year 2007.
Gross margins improved to 41.1% of sales for the year ended December 31, 2008, compared to 38.4% of sales for the year ended December 31, 2007, an improvement of 270 basis points.
“Merit’s performance for 2008 exceeded our original estimates for the year and are a reflection of the efforts of many employees during a difficult economic environment,” said Fred P. Lampropoulos, Merit’s Chairman and Chief Executive Officer. “The volatile prices of commodities we have experienced during the past year were overcome by our focus on efficiency, new product introductions and productivity.”
Revenues for the quarter ended December 31, 2008 were $58.0 million, compared with revenues of $54.3 million for the quarter ended December 31, 2007, an increase of 7%.
Earnings for the quarter ended December 31, 2008 were $5.4 million, up 14% compared to $4.7 million for the quarter ended December 31, 2007. Earnings per share for the fourth quarter of
2008 were $0.19, up from $0.17 per share for the fourth quarter of 2007. Earnings for the fourth quarter of 2008 were negatively impacted by an increase in income tax expense of $356,000 for losses in life insurance investments related to Merit’s deferred compensation plan which are not deductible for income tax reporting purposes.
Gross margins for the fourth quarter of 2008 were 40.5% of sales, up from 39.8% of sales for the fourth quarter of 2007.
Sales in each of Merit’s product categories grew for the year ended December 31, 2008, compared to the year ended December 31, 2007, as catheter sales rose 20%; custom kit and tray sales rose 11%; stand-alone device sales increased 9%; and inflation device sales grew 4%.
For the fourth quarter of 2008, compared to the fourth quarter of 2007, catheter sales rose 23%; custom kit and tray sales grew 15%; stand-alone device sales increased 4%; and inflation device sales decreased 4%.
Sales during the fourth quarter of 2008 were affected by deliveries of inflation devices to an OEM customer, foreign exchange rates, and the recovery process of Merit’s facility in Angleton, Texas, which was damaged by Hurricane Ike.
Selling, general and administrative expenses were 22.2% and 23.4% of sales for the fourth quarter and year ended December 31, 2008, respectively, compared with 23.1% and 23.2% of sales for the comparable periods of 2007, respectively.
Research and development costs were 4.1% and 4.0% of sales for the fourth quarter and year ended December 31, 2008, respectively, compared to 3.9% and 4.2% of sales for the comparable periods of 2007, respectively.
Merit’s effective tax rates for the fourth quarter and calendar year 2008 were 36.9% and 34.9%, respectively, compared to 33.5% and 33.4% for the same periods of 2007, respectively.
Merit earned $28.3 million in cash from operations for the year ended December 31, 2008, compared to $32.1 million for the year ended December 31, 2007. Merit’s cash position increased to $34.3 million on December 31, 2008, compared to $17.6 million on December 31, 2007.
During the quarter ended December 31, 2008, Merit received 510(k) clearance from the Food and Drug Administration for its new Maestro™ microcatheters, and the Miser™, a newly designed contrast management system.
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, 2008. Merit does not anticipate those adjustments, if any, to be material.
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INCOME STATEMENT
(Unaudited, in thousands except per share data)
| | Three Months Ended | | Twelve Months Ended | |
| | December 31, | | December 31, | |
| | 2008 | | 2007 | | 2008 | | 2007 | |
| | | | | | | | | |
SALES | | $ | 57,996 | | $ | 54,343 | | $ | 227,143 | | $ | 207,768 | |
| | | | | | | | | |
COST OF SALES | | 34,503 | | 32,729 | | 133,872 | | 127,977 | |
| | | | | | | | | |
GROSS PROFIT | | 23,493 | | 21,614 | | 93,271 | | 79,791 | |
| | | | | | | | | |
OPERATING EXPENSES | | | | | | | | | |
Selling, general and administrative | | 12,887 | | 12,553 | | 53,127 | | 48,133 | |
Research and development | | 2,404 | | 2,127 | | 9,160 | | 8,688 | |
Total | | 15,291 | | 14,680 | | 62,287 | | 56,821 | |
| | | | | | | | | |
INCOME FROM OPERATIONS | | 8,202 | | 6,934 | | 30,984 | | 22,970 | |
| | | | | | | | | |
OTHER INCOME | | | | | | | | | |
Interest income | | 286 | | 145 | | 781 | | 393 | |
Other income | | 55 | | 34 | | 80 | | 36 | |
Total Other income - net | | 341 | | 179 | | 861 | | 429 | |
| | | | | | | | | |
INCOME BEFORE INCOME TAX EXPENSE | | 8,543 | | 7,113 | | 31,845 | | 23,399 | |
| | | | | | | | | |
INCOME TAX EXPENSE | | 3,151 | | 2,385 | | 11,118 | | 7,811 | |
| | | | | | | | | |
NET INCOME | | $ | 5,392 | | $ | 4,728 | | $ | 20,727 | | $ | 15,588 | |
| | | | | | | | | |
EARNINGS PER SHARE- | | | | | | | | | |
Basic | | $ | 0.19 | | $ | 0.17 | | $ | 0.75 | | $ | 0.57 | |
| | | | | | | | | |
Diluted | | $ | 0.19 | | $ | 0.17 | | $ | 0.73 | | $ | 0.55 | |
| | | | | | | | | |
AVERAGE COMMON SHARES- | | | | | | | | | |
Basic | | 28,069,589 | | 27,340,755 | | 27,769,479 | | 27,424,686 | |
| | | | | | | | | |
Diluted | | 28,750,369 | | 28,037,986 | | 28,549,825 | | 28,204,235 | |
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BALANCE SHEET
(Unaudited in thousands)
| | December 31, | | December 31, | |
| | 2008 | | 2007 | |
ASSETS | | | | | |
Current Assets | | | | | |
Cash and cash equivalents | | $ | 34,304 | | $ | 17,574 | |
Trade receivables, net | | 27,749 | | 26,619 | |
Employee receivables | | 126 | | 144 | |
Other receivables | | 818 | | 1,140 | |
Inventories | | 38,358 | | 34,106 | |
Prepaid expenses and other assets | | 985 | | 1,297 | |
Deferred income tax assets | | 2,782 | | 811 | |
Income tax refunds receivable | | 607 | | 297 | |
Total Current Assets | | 105,729 | | 81,988 | |
| | | | | |
Property and equipment, net | | 103,939 | | 99,696 | |
Other intangibles, net | | 6,963 | | 6,163 | |
Goodwill | | 12,998 | | 9,527 | |
Other assets | | 2,051 | | 2,964 | |
Deferred income tax assets | | 23 | | 4 | |
Deposits | | 73 | | 78 | |
Total Assets | | $ | 231,776 | | $ | 200,420 | |
| | | | | |
LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | |
Current Liabilities | | | | | |
Trade payables | | 10,622 | | 10,275 | |
Accrued expenses | | 9,973 | | 9,492 | |
Advances from employees | | 366 | | 267 | |
Liabilities related to unrecognized tax positions | | | | 1,023 | |
Income taxes payable | | 211 | | 737 | |
Total Current Liabilities | | 21,172 | | 21,794 | |
| | | | | |
Deferred income tax liabilities | | 8,771 | | 6,082 | |
Liabilities related to unrecognized tax positions | | 2,818 | | 2,588 | |
Deferred compensation payable | | 2,348 | | 3,063 | |
Deferred credits | | 1,994 | | 2,105 | |
Other long-term obligations | | 368 | | 420 | |
Total Liabilities | | 37,471 | | 36,052 | |
| | | | | |
Stockholders’ Equity | | | | | |
Common stock | | 61,689 | | 52,477 | |
Retained earnings | | 132,674 | | 111,947 | |
Accumulated other comprehensive loss | | (58 | ) | (56 | ) |
Total stockholders’ equity | | 194,305 | | 164,368 | |
| | | | | |
Total Liabilities and Stockholders’ Equity | | $ | 231,776 | | $ | 200,420 | |
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CONFERENCE CALL
Merit invites all interested parties to participate in its fourth quarter and year-end conference call today, February 5, 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 800-366-7449, and the international number is 303-262-2140. 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.
ABOUT MERIT
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 and radiology. Merit serves client hospitals worldwide with a domestic and international sales force totaling approximately 100 individuals. Merit employs approximately 1,650 people worldwide, with facilities in Salt Lake City and South Jordan, Utah; Angleton, Texas; Richmond, Virginia; Maastricht and Venlo, 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, 2007. Such risks and uncertainties include infringement of Merit’s technology or the assertion that Merit’s technology infringes the rights of other parties; product recalls and product liability claims; 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; inability to successfully manage growth through acquisitions; delays in obtaining regulatory approvals, or the failure to maintain such approvals; 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; and other factors referred to in Merit’s Annual Report on Form 10-K for the year ended December 31, 2007, 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.
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