Merit Medical Systems (MMSI) 25 Apr 182018 Q1 Earnings call transcript

Company Profile

Participants

Fred Lampropoulos	Chairman, President and CEO
Brian Lloyd	Chief Legal Officer and Corporate Secretary
Bernard Birkett	CFO
Joe Wright	CIO
Larry Biegelsen	Wells Fargo
Bob Hopkins	Bank of America
Matthew O'Brien	Piper Jaffray
Jason Mills	Canaccord
David Saxon	Needham & Company
Jayson Bedford	Raymond James
Jim Sidoti	Sidoti & Company
Mike Petusky	Barrington Research
Mark McGrath	Kenmare

Call transcript

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Operator

Good day, ladies and gentlemen, and welcome to the Merit Medical Systems’ Inc., Q1, 2018 Earnings Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] And as a reminder, this call is being recorded. I would now like to introduce your host for today’s conference, Fred Lampropoulos, Chairman and CEO. begin. may you Sir,

Fred Lampropoulos

We and Officer us welcome afternoon on Thank Brian? Lloyd, the Lake ladies going reporting. have ask read to in delighted our you City. Brian time. taking for with this Chief you forward gentlemen, afternoon, to we’re I’m Legal and our to Salt look to Good beautiful statement. spring opening

Brian Lloyd

you, Fred. Thank

update filings and of or today’s made do except with regarding of such statements, section are statements. we or information any obligation you be reference events, caution as in as statements. a presentation these whether only on not risks actual forward-looking may entitled our and result our today, of not statements We other required discussion by results unanticipated risks, not may that Please made any to or purely information as our the this forward-looking Please refer and reports our to Form are are anticipated be differ XX-K Exchange available in discussed Many date During our Any assume Securities events, projections, be regulation, of Statements in Forward-Looking those involve made is annual and other such new call important for and that materially to which events report historical. which website. statements. that on this aware in cause statements future all law uncertainties the could information, such otherwise. made to Disclosure considered Commission, call forward-looking historical Regarding from and statements anticipated purely

the generally with prepared are which United financial accordance in accepted are accounting Our States. principles statements in

the Please of performance set this investors our comparisons certain believe measures forth useful financial operations. financial data and and in our discussed operations Non-GAAP that in important sections refer the regarding a financial for we on income. GAAP this regarding The call to However, prepared discussed corresponding net Non-GAAP and reconciliations underlying release non-GAAP to, for included ongoing should presentation and financial business measures non-GAAP Measures not items statements. Financial period-over-period trends such be tables for to with measures affect some non-GAAP Measures useful on as in can Notes financial with to of our provide substitute consider information financial addition information supplemental entitled call. non-GAAP reporting GAAP. measures of and accordance measures exclude Readers Financial These

companies. with similarly Finally, these be other of titled not calculations comparable measures may

Fred Lampropoulos

thank an as here been again very thank and once it To busy quarter the we you a Dickinson you closed have Brian, and deal. understatement, us. would ladies Becton, say very, very much, has be it gentlemen, for that joining was active

transfers in activities literally for order taking many inventories of markets. We developing place of our the appropriate channels for and the of the all the major to and putting have completed the inventory, of customers and pass

clean number bottom I on rooms, In This and addition the is In teams for the for turn have specifics, million we time go the in line this able that to quarter. the a to numbers, minutes number are is very quarter is think doing of we candidly in on and track. a that all all Bernard during that this I'm well experienced to an more happy over be to the calls I've day committed the had time. that about to report first team. XXX This went going a of the is our team the teams we well to over of really know transition of the as and a in I issues. But locations schedules manufacturing we history, ordering hit few had really able and to order Merit's to that, be the our are over extraordinarily as of track. but completing I'm our preparing equipment I everything is this suppose

I been Laurane inventories also Irish and on bunch will and take a orders we now of we anymore Medical were able now of existing into and to think other the details other beat The is estimates explain than for now other think have capacity margins been Street important our able earnings moments. substantially. we our forward We launch. is in customers. and look have there I acquisition issues We which building product consolidated was as few that as facility, literally they not Couple whole beat to

exciting So, the this in XXX(k). press we a think release. number received We forward. I look new an They are as is opportunity us for of

top coating over would hydrophilic unique You I this of of as believe out cover to can is is with I a that many them, point couple and IDeal, read the but to to who a in a sheaths. flat I best sheath. blogs product a very, very well vascular also are and read candidly the our the read my important. One the substantial very now think is as believe wire like a you that's existing has very about This Prelude this And customers product. our physicians premium It fun it's the market. product and text performance talking to of of kind

only process my combine by of also together, And be used is product, going a of on have going the a these dramatic was with I market considered of to This that, Company you procedures. procedures, to it but in pending. products addition who this our to believe the a for received done closure be on knowledge, Europe. procedure area company to really in the is Dr. two radio best we proprietary terms father have that impact called that patents are When access the and the it's forward. a Box. also done is Kiemeneij we recently distal with Snuff XXX(k) It’s being a radio device may It the proposed SYNC. In in

about full. excited The pipeline is very are this product. We

We one had in even have over meeting and know R&D a as products coming sales though we January. XX we active you have up

that products new have We are a and still in acquisitions of the is market and our is operations, pipeline new our our so the lot there do. full. issues The capacities, making facilities work Netherland. of ongoing the Melbourne I The the coming of the of sure Chinese expansion issues and activity more growth think to to and facilities Tokyo to in accommodate and March

will and I very, to technology So about to NinePoint with to the slide very at Medical have of have deck you is me, issue look were a to is will to Medical. slide will go I few a we have active more also A is would individual in to see the notes, opportunity explain opportunity hope website. an that in and NinePoint have where located Massachusetts. talked I our this that time. we procedure, you technology going to it’s comments -- But on the Bedford, a this very, that if as their the you use. said one like this

it's strategy of technology. find to it's more part accessories will a this compelling It's you think accessories. interesting. model. We move a that to from But long-term therapeutic very our think has this I

fits part product this other balloons, in and has of are that probes and opportunities it resides Division. our and So Endotek

and coming the of And the over. will be that technology a welcome about yesterday sales lot in So be I that really will was future. group people a this is we opportunity talking to able

this, the So, our are is acquisitions it net well. and working of transitions

full. Our pipeline capacities our and is our initiatives are in place and

give that think comfortable I’m So, for numbers who with maybe projections. said, our with let's to I Bernard turn to and we And feel start some a over us moment. color the time Bernard Birkett, some going

go So by just ahead way. let's the

Bernard Birkett

Thanks, Fred.

Middle rates. sales shift Africa device currency did business million up update from show revenue XX.X% endoscopy for about of the all and doing growth this with to talked we perspective, completed those approximately in the regional drivers that perspective on QX. devices within From contributed that on showed margin reported from The basis. and we quarter product we've all were saw and sales, and there quarter, our standalone main margin acquisitions and growth revenue non-GAAP QX reported. China, margin our our had level mind was that We've saw integration will Asia-Pac, said we Europe, we X.X% the So XX.X% mix the perspective, impact a as $XXX the on that a our seen. performance endoscopy contributed again BDX East call gross inflation that’s with XX.X% in the quarter numbers, 'XX just just the QX our a high to also catheter of the and that was strong quick a number on sales, on our the we as completed of various all growth. Organic were and acquisition bear in first a in the quarter considerable in very to overall U.S which some while constant coming all division And within that based some be the in

so again with profitability. for expected pretty earnings QX and perspective, so overall with OpEx with the we EPS TSA of as on and a of much and again about that view, of of 'XX an track compare integration in if numbers improvement have that in QX exclude also in that for think $X.XX So QX an costs we at and us $X.XX 'XX percentage we increase 'XX, costs count from what I and in then our there. line would the to OpEx the an XX% included compared about were in significant of 'XX have QX point we line spoken sales, And share when again from

on track. we’re all-in-all So

Fred Lampropoulos

thank you, Bernard. I think --

revenue the we we a I side, would. that more mean than thought think I clearly, on little

be while. kind we this have and of sales bit about people little thing our In I going now had that. get we not of out from more We first a year. for have the first a surprising think may quarter, of all meetings so that of the but that's the the the of even is field surprising, interesting always

you this the And surprises again of getting any production is think business for expenses. were in this and don't back There generally additional first loss talked we after think holidays things I so there are at I in us are numbers, what additional had and -- I is the about at the all about. look that various you but costs think then to were some and there always up think ramp going quarter, when look speaking. on, those very And active

will second to And quarter that quarter, their on and as balance think numbers. but lot about so, the give the to for. talked what we I that but know do some the hopefully this numbers consensus was not look work there because to to our the are is, is comfortable were hoped comfort who that These one It I move doesn't of that I first had forth, I I concerned the mean analyst forward from numbers. think year. able were up exactly had we jump we they a to some the people transaction BD with the think there's of

other have that will We that area. complement particular product launch

were Our very, very inflation devices strong.

I'm Our that you the line was robust areas and the business standalone business but bottom again about, reporting. have forward strong. looking is of were to will questions future couple is There were sure

answer were So view go, give course in but on views get here us my your now you I extraordinary think guys And and to you that. say to quarter of there that questions. a is

your with a be that and very amount has know the of administrator. busy hopefully time, we'll we over I So time this the you our questions. it's been to and for in right take said, to being will kept turn

I can you. be with logs hours Following those course that and here the we all things specific of any clarify compliance will in the a with questions, to issues Bernard couple of off for the share

to with being to to again. it's said, turn I it questions. that we time our will think look administrator and over your So forward you Thank

Operator

Wells comes line from Fargo. Larry from Instructions] the of our [Operator Biegelsen first And question

Your line open. is now

Larry Biegelsen

the in start just are I just I on reiterating assume wanted you Are release. press the call? guidance QX see any didn’t the Bernard, the to you guidance. So laid -- out just should you we guidance on all

Bernard Birkett

had was think again, -- out QX guidance taken That's decided there correct. call. And place that And it on laid have based and and just guidance. where on integrating acquisitions to that that strong I maintain we the we these

on So, can that. it's we to -- compliment deliver it a end that sorry

Larry Biegelsen

The tax expecting. hold little the any of a lower rate we Bernard tax rate rest came year? bit why there reason are in for Is the this the XX% of than quarter wouldn’t

Bernard Birkett

we that little stock comp on a lower was bit the up -- X.X%. was, benefit picked that about It and based so

a So EPS. that is effectively translated of about penny

that range within to. back it than get the out we that was guided you have If

Larry Biegelsen

QX, comp you year. And able comps? so And to organic in to deliver of on you for a X.X% year besides grew of strong X% those the for XXXX? about toughest that's being Fred the on are what the congrats feeling your growth some X.X% that are to drivers and easier start organic How

Fred Lampropoulos

We We do guys let never easier you look at comps. that.

I We did everybody wheels It's is robust. getting where transaction engaged was this it strong. a think business and very getting Larry, this the actively those closed in in moving. quarter

have sales out so little meetings, We start have the bit holiday things and we slower.

sales have meetings. We

robust. the have transaction. stuff, We this that business of was all And despite

seeing. of because we're be new terms and it's In of of growth, will probably and actually organic products well the belief side what high estimates that on our these that my

by the product really ranges We depending to It's configuration up one competitor. way deal. really just I'm very about have excited IDeal this I've that a from It's is big $XX. on discussed. So $XX products the business, a the that's

We excited have device so very capacity area. be about the new that products will that several other rolling and inflation in out and we're

see from the be to continue, continue devices a this is As you very very, inflation product legacy strong. can numbers

market asking Merit products reintroduced And take I indulge we Just XX% the catheters. Cook the about we're Impress quarter. and will note to continue it's Cook lot deal. to see you'll yet up couple share. of our We're to other of is believe almost just a A is points, seeing. if in a essentially for moment, that This continued interesting peoples first their

have out So, coming there not are new products this I’m new we that is some to new products. to speak some embolic materials more anything products new that, in year. going than but

So engaged a at active sales have we ready force. stuffs of roll lot very that’s to

good But if So business imagine for excited, I’m reasons, and even thing. you excited. now I’m can excited such always the I’m more about

Larry Biegelsen

process? later like Last so than is you you details for gone guidance year? It would of and the deal the that this come in expected. me, you smoothly. at Can the to BDX have are were on integration very sounds a the high additional for you And happen, sales end where some what us EPS if to in closed little BDX share for with

Fred Lampropoulos

cleared timeframe really the to MOFCOM regulatory and get had and be So, to have up with get the issues approved. that

we staff any and those and maybe back of speed things. think control sooner. which more We issue have were But just catch. able this that sit order than the to shorter in Larry were important the the I we So, of really our to work wait rollover was and to is, done was in

So misunderstanding. me there by that, is so mean I say what no let

We the are all taking orders.

done so and outliers moved will Canada, some inventories all total distribution we of locations, our with been to the not control. it's that essentially There to have have in All have other are regulatory approvals, centers. Europe U.S., that but do the in soon

we provide the the with the have us simply and BD So ability inventory. that agreement what is for restraints just to

to here at end provided, the part I the is as to of to be then know think range. are exactly a to this Laurane likely that. We're at I I room say -- today little But is of need going that being as instead more supplies has on this. And product the lower would of bit have I be range to terms planned. think have of to range. delivered very that the to mid everything But have do And up in so may also our high we gone gone I have fine Medical just So, sure. I I a that see make point it's

devices have is already that, these enhance but set, of new about of then kind help Merit core addition are this that is market, hear R&D, to a the we to to very the biopsy which about. And project and excited stack I business are things going we that glove. are this the handling to all of that whole biopsy, biopsy then a something in about. in you this And be so think lot things products is development in Now, to going talked bone going under that new

issue So, the the the all with They transferred, have in all Mexican so remains now three to is and very Lake the after Salt products mostly move we last the years. products. to get and place our manufacturing the two when moved same to people facilities real plan people, that Mexico that our personnel moved who but the transition did

Ron our and and under a Mexico, guidance to team great to do ready folks we've So, we in Frost's it. got are go

while that the in expand that further do And wrapped So, start and the will that then, to even to we opportunity. are and all confident ability our offering up. we

So give appreciate and you that’s the the best answer question. I I can

I will think our we now to on move next question. then

Operator

from question comes the from line SunTrust next Humphrey. Nudell Robinson our of And Bruce

Your line is now open.

Unidentified Analyst

for This is actually on Bruce. [indiscernible]

Just XX FX first and million X.X mentioned question dollar acquisition million to for BD, acquisitions, XX.X stands? FX million modeling, million other for XX and million is the for to X that expected was still previously

Fred Lampropoulos

does. it Yes,

Unidentified Analyst

and Okay, Was that expected. impact EP the lower great. in CRM there than came any segment? in

Fred Lampropoulos

I Which didn’t hear the… segment

Bernard Birkett

EP.

Fred Lampropoulos

No, it's on of part issues, the get little the We way. it think delay that But production other the EP coming I than issues. a it don’t going did we a any see one some I in area bit just have of year out some for had We that will the products. had product same. out as see

Bernard Birkett

just how the were markets. regulatory previous in that international Can progressing? in the requirements and Okay there you update provide licensing that’s call you hurdles mentioned an

Fred Lampropoulos

quite doing that’s well. Yes,

that it signed of some other Japan just in China, had places over issues was few issued in Australia. be to Some including and

quarter. completed will will been those have be we things and behind of will or us. track on this are believe second all completed be those that of Most All in

Operator

of the Hopkins from line comes Bob Bank question next from of America. our And

now open. is line Your

Bob Hopkins

to quick a want and wondering did just on I integration couple when gross those that the here margins. the manifested in the I could away fade here? you was ask quantify quarter So questions to if of costs start

Bernard Birkett

We'd third effect of quarter. and We expect at end to to quarter should to and the start see taken second see the back the gradually shifts having place. then into major start them the

saw about all so first on we expectations. effect all basis of call, our QX talked the and point with acquisition, So had the the the realigned of from quarter, in that with on we boarding XX

quarter of and in we of absorb So second quarter this. you'll see most end the again some then by the should that the third

Bob Hopkins

course go you then, the starting gross guess a margins XX.X drivers? from bit for margin drives here over big guidance ending XX.X, gave the rest of to if just little somewhere cadence what the you year, rest of the so over previously mind of of cadence the to you'd of of maybe course and talk up gross just rest And over would of And the XXX at could the from and maybe a year higher this you sense giving us range you're the margin I where the then the of in that just the year?

Bernard Birkett

guide progressive don't see but improvement into and in QX. will QX QX, you by and we Typically, quarter

So we coming on earlier savings it the initiatives boarding will increase drivers in then groups. and that have quarter-over-quarter. cost already operations delivering said our And identified and the assets on we as mix from are major improvements BDX

Laurane so products is there Prelude we IDeal we'll to plus. pipeline, Medical and number R&D gain starting coming improvement some our of the devices, So, fronts The Corvocet higher again the revenue. biopsy will margin Products introduction of products, see a increase traction and through in

Fred Lampropoulos

a will power you've all our there, bunch that. there choice we so the whole to of is product and there in there contribute the thinking in for The showed

Bernard Birkett

that So of from number improvement as different come margin areas. I a said that the

Bob Hopkins

change real the what no beginning from at the year? of basically saying so you were Okay

Bernard Birkett

That's correct.

Bob Hopkins

year the lower sorry And tax miss sound given the tax was for if quarter slightly thing then is just expectations your I rate me, this. lastly rate changed? that a of for one Does for like the. the that I'm full But sort

Bernard Birkett

of that to stock X% for hard that's XX that's that we No, us first predict and kind size. of I were in as have still something quarter within range the and the XX. to so on benefit said And again

Operator

our question Matthew of line And O'Brien comes the next Piper from Jaffray. from

now Your open. is line

Matthew O'Brien

Just quick a gross follow-up margins. real on Bob's question on

in Just for you about, talking given the year we model versus the the the full to mix the dynamics should closer somewhere range of lower are end middle? Bernard that

Bernard Birkett

based I think we're we and somewhat competed the still on track on midpoint.

Matthew O'Brien

the a the fantastic. from and the questions And strength me seen talk Can of that the that driving bit in performance lot was are quarter the you that was then internationally? top line, seeing two the, about international on durability little you average just what's

Fred Lampropoulos

Korea, I continued all is of in strong growth the think the of it I situations some Asia. Japan, in both China, mean Southeast

Canada areas If those Vietnam, well. is at of you look doing well off course doing as are Thailand, well. all

So, are anything want seen We've that some we've those put it really and that effort products to in registrations Joe resources has time. online more you a continued coming approved kid new in being that? Wright, areas. of that for to long add

Joe Wright

biggest the is continuing still. strength Yes, China

Bernard Birkett

China the Okay, big so China. winner. it's is really

Brian Lloyd

where we to And that's continue investments. make

new are sales to remaining continue and We Chinese products register we strong. again force investing into our markets in growth and then seeing legacy there products very the

Matthew O'Brien

And are conversion BPH? you treat trained still bullish and that that's then on How pack? heard as as [Dexter conducting growth that's symposiums, the any can and and that of QX specifically the what in couple sorry still of they and how that are at the were was about still, which approach where technology haven't years? coming get we contribution is revenue far into contributing PAE I'm here are the that be device. Are Fred, to to

Fred Lampropoulos

behind can our XXX versus of [UFP] kin companies. let could We not that. a the The to five away And actually Form in good what actually did the in is That's am or way kind We to Matt about in our that I six. whole enthusiasm maybe is bring to of part at like talk group SIR per of the we the It say do can SwiftNINJA, the big guide like people their thing True of scan refresh there just physicians this is kind of you I’ll saw group of that at are products that is I me and booth. kind mean physicians of Merit had large for This really process. got were a something front well. best this there XXX this that just because other the on vial symposia something have of grade which It's is emerging moved players. me PAE procedure. not the some really And really that, and of is of meeting knowledge blocking I’d unique from In just our tell use embolic physicians. sale. their really the products the you best use XXX $X,XXX to everybody's of interventional up booth. many I of of one like memory booth. only cases, big third the the the Los all capabilities Matt, month radiologist. IDeal, things And that Angeles ago. video we -- competitors a wire. that or you of were to the those dynamics really the

for up our will again, catheters. and a that you XX%, take products in a to take up to about commodities enthusiastic that if products very it. the are if that up XX% that the you remind standalone And the we lot quarter. of of show look accessories from a you at our look be So, But the see catheters continue are

support, those the embolic So coming I’m products. but always the not you enthusiastic. number a big of that. this of smallest areas. that’s But most of you and procedure, of as product, to access, where challenge need it��s been one was with it's in But catheters, bullet know part it look That’s accessory wires, one still

of they on have end I are training now doing think now it We up we and and the year. offsite from are until filled classes site here the

So, that in it's still products. portfolio for and lot us interest of our entire radiologist of helps interventional a of course

Operator

line comes Jason from the of And Canaccord. our question Mills from next

Your line is now open.

Jason Mills

different asking Bernard, with continue gross with start the in on to way. I want margin, you a discussion just

So mid bullish gratify sounds me points the the of the year, you're range. rest commentary of like that get and your it here to about to

You term. those XX.X%, the stock you somewhere would expansion imply to but the half are from obviously low own is continuation we one some the back to obviously point margin the be talked it, the Investors business investors in is long-term are hear maybe committed XX%, year. going And XX% the in in to things seem investing mostly that of and longer of of and this them the about. over Fred in something

sure, improvement I know and outer and guidance but here I you basis just margin plan sort a given make to given want for points us it's of XXX So haven’t multiyear a year. years, have XXX you of included

level next How think about progression So, year that should year? latter as we XX% range. think about the part of from the being that maybe XX% we

Bernard Birkett

point, already it's the changed XXX basis improvement our And XXX and but to hasn’t it's communicated year-over-year. at we strive to guidance end obviously points have XXX. high of that at have guided XXX achievement, we still this As to keep at

the XX margin, mid like you and gross coming overall we to track get obviously that our know targets mid on XXs will is So to to term towards. longer continue

Jason Mills

sounds talk with the comment on a side, respect the you tend from product base? then to be margin a longer from quite you just for to is, portfolios asking. a give what a maybe that of Fred And customer breadth in or it part higher products both margin customer in portfolio, I confidence is product Bernard the bit give to Or portfolio your is about you two -- from term to that really forward am And margin looking portfolios it question standpoint my I new perhaps. is you you products graphically that those coming Fred assumption? out, end geographically product had confidence they other in guess ever your best it is portends And words, higher more what like think of the perspective? product the from a margin Did range? one

Fred Lampropoulos

I that the for question but have the ideal the mean value developing sticks I've either. products clinician of of in full food that they It's higher are frontend that marginal that. used time, get difficult we There's more is stitch, lot, to consequently, think both everything just the moving is position. to me brings no cheap chain Let value the a terms of between but is Company. up They the the but complexity, more -- more price it take but that example to its and that it doesn't true stick take in to Merit holds it it the is still that produce. And and and Jason. the And it prime

you at because $XX these about of but you $XX, with maybe $XX. be could sheath, talking capabilities If specifications, unique talking look their $XX you range, and sheaths about might a be particular

the that analyst is add that of being it’s products to hard continue to know as of so movement products, where with our said kind of that we see its and is So products you customers one opportunities broadly. the things, think in of so pieces need, But also this. Company complex I we lots all many

going the before but take let’s take margin bit get so about two think but it to of And I said, that to be growth. products talking these time or China improvement things volumes years an are the always that example approve, there of sustainability more speaks and three were little today it could takes being overseas, a and that to

long for in or of locations done distribution we modify reviewed now have past, were we've place direct the infrastructure and something time, it's there. we direct systems in these a have So many

which like point itself things and let’s first logistics be So customers the be August. of whether man it whether the sale, is in face-to-face not closer pipeline forget it be Rhapsody, the going with in to and to

start bit product is about stent. a that talked a about, is a little venous hear this. covered this we more Now you will This to central fully

better So customers as when and move to service to have help lab, types huge you’re going continued into for with of the aspect substantially devices to people things we shareholders. unique, think there walks what Merit there's our I ignore start every But opportunity therapeutic really to we road, down margins. procedure, see that a makes our don't. think that's Merit Merit, that's other we’re that a We and to of

pleased with were couldn’t heading. I date, Company So, maybe the be where where we importantly are more more

Bernard Birkett

it. three we a that again, and higher that confidence products, of but and these as outlined R&D that therapeutic already of number we this on the that components as the spoken you delivering different strategy, about last call, based at key higher drivers again future. Yes, will is That's aspect products There's we were four over one a margins. margins. key to more can we've But higher-margin hit give in looking of a in delivering years our on part margins

Jason Mills

I'm positive an to year of of you what any wondering, balance and would Within you sort the down I'll back the And having this margins question or are impact just on fluctuations from seemed with you impact? to help quarter to or whether have came we go the it there what earnings appreciate few to to claim of the were FX funds then Bernard, would expect nonetheless. although the balance conservative modeling it currency revenue get I queue as FX, beaten guys earnings than more for cover to little year the be P&L? so being you FX were you looks expecting or earlier mentioned But not and that, the color. bit in respect is to the you whether for negative impact sort have to you

Bernard Birkett

of in have all But question, modeled that forecast natural so seeing. with we predicted be based So, in on impact to had on have we margin a lot impacts to FX the that kind expectations. we inline quarter where first FX a of its on impact and the this first quarter, on what the it first happen and again been in part of of the on in it's happen the we've line pretty models again the and earnings our most would

remainder year. Now the mostly FX impact of in the

Operator

Mike of Company. from Matson And & the question Needham our next line from comes

now Your line is open.

Unidentified Analyst

Mike. is this Hi, Saxon David for on

it So if have quarter and target first the can year-end? was just, ratio event you of and I your talk guess where leverage you for about the

Fred Lampropoulos

quickly have answer to now that Correct, I'll Bernard. Bernard

Bernard Birkett

X.XX X.XX basis sorry, on growth net basis, it X.X X.X net on quarter. ratio, On the leverage a is the on the in -- and basis

David Saxon

And target? have a do year-end you

Bernard Birkett

X to within will be X.X be what range operated Typically, and the we in. will that we

David Saxon

would with funding off following more hold you debt? I consider just off mean until you a an on are acquisition I or that, stock little pay And going you

Fred Lampropoulos

our listen, time No, if the to always and is, and through at and that we currency, I what we've that that all that it's we and do the them within we're and it listen are we'd see question come shareholders at that. get look the oppotuXnities or asked there was company looking, us commitments they stick you've right acquisition are able made. the this with parameters we look done to

have these think all to I have they have, fit. to So

are that certainly the but leasing various we So we don’t, time. saying like is pending are have conversations number that, we any we of no engaged always deal at looking are and given in the we are we that levels saying at what

David Saxon

on pathway? guess I then to is radiologist? the over what interventional patient little a an a another And urologist PAE, can talk incentive referral about to a for you And referring

Fred Lampropoulos

it's about talk my referral to practice Well, patterns. not

and However, from that I me. they these listen that the just people will procedure various I’m getting are A it of these have hearing so lot to told of people the have to and in things things say listening what word-of-mouth. who lot coming positions, newspapers. about A are articles what in are

not their at it's the like saw and that because is and same their the that a if time, patients, me, you way. kind There look of physicians less but But choices, coming sound alternative. in the invasive seeing me But the away people where same there that heard patterns. willing to having don't an many So, It were man, at give like we we're it PAE. by shows it's listen to as away when the was USC I’m refer starts patients. physicians the thing

sales I think slogan. good that’s a

Operator

from James. our Raymond Jayson of And Bedford question from line next the comes

is now open. line Your

Jayson Bedford

integration if would XQ you the to sales said it of Berd, back the margins, 'XX was that OpEx in 'XX getting in have same that Is TSA couple, in XQ a a as as Just been cost. the I excluding correct? think head you percent right, I

Bernard Birkett

correct. that’s yes Yes,

Jayson Bedford

lift? those cost When integration TSA and do

Bernard Birkett

after see in QX, lift possibly and and We again then see you'll then probably of them -- that. QX, they half should will the in first

Jayson Bedford

anything Inflation devices about one-time what's percent, talk that plus can there? driving there you up, what of just kind XX growth? was And accelerate if not,

Bernard Birkett

it's signed agreement previous no I quarters co-exclusive and the of to in there. HPG two there that the companies now couple ABBOTT there we will with where on that some think but have about may I you is be this there, recall incidentally, this do talked going per Yes, But and of a moved was probably three going not at what least only that level, but se, my some belief mentioned as one-time accelerate. on I things back something with you Jayson, where see winners and calls, we other think is you Merit I that actually as at see two

Let me tell why. you

idea a products tremendous We matter everybody me I most a gives the the the number good is, was The show said and that up. Touch idea. was of tell you because it to which product, have have the pleasure of the one is fact it not

chassis. it’s Diamond have the We the Touch with new a now Blue DiamondTOUCH,

year we We year. have have and another this devices two more inflation one next

leader. So on in remember or procedures, Merit are procedures, in use pressures in peripheral are technologies forth. needs, two GI, in all market they use different coronary, different Merit technologies. products the so and has And these so they of sizes, several but used is kinds they

the So, has the customers is needs core technology done I thing of all we've that using meet that think a different aspects. our

think device any and but one have the a we the several along a one inflation go meeting have without different you it’s the for case. is not not wonderful inflation choices luck. you’re then So a conference is one-size-fits-all which with that device, to business And like and school a them. GI also just it's in market, and about peripheral, hemostatic coronary peripheral customers; that good the started not having than devices I Merit of go value and generally other they going market, tell use And we just needs there a

without having to their what kinds Thanks Merit that I leader. and why So for asking makes unique a those sense, you question. that's I question. There think global like of go.

Jayson Bedford

will little what And looked Last Is at Company. portfolio? on anything me comments? it’s talk one -- that device, it’s talk on imaging about is the in the sense as bit, selling then about little selling? here. Meaning, I my unclear for take you so since that just in some I there and you're a also are of else a you're bringing been the resources a kind debate the X.X you for it Can while

Bernard Birkett

very I haven’t been just scroll it calm, been itching, I I've in.

itching. you're think I

So you I will go a give ahead scratch and here.

we've Here the They while. chassis. known exactly a They've device. but Company we to go. to using device use spoke XX NinePoint the is big a on that been different inflation about. It’s just what from I go customer our

using uses instead the it esophagus. So in fluid, air of

to going the console. We’re selling be

several will we are and only We selling and United just will they been selling has those. I will other the balloons be be there Mark shortly in to Company States selling are the coming they they because we believe and going have but the products CE and limited will be that The improvements to that regulatory don't. action go and -- we had sure resources, have through on the I or make

gone that. of So valid to Merit CE do effort they in the for Europe reasons but haven't the Mark will

product sold Merit So this will will be iterations. be there a is globally several and will be that by

including biliary, there's a places I especially of the think number But looking OCT Technology if get at areas lung, is other to the color, of a esophagus. vascular. to start number you best into

and product appropriate the in of some very them what excited could means, the am products personnel. with moving actually MIT of came think up falls after be this legal will line had nine had They these about I Mass right filing. I General But a used discussion out that Now, terrific it ten we about Hospital. that chain. This out nine or food and salespeople is of

Some of sales them some four selling were were product. rep, this people essentially clinical and

build disposable and and the those that for for side. -- you both the $XXX,XXX exciting years, it take perfectly will fits will We console opportunities to and out both when and and $X,XXX the there new the over will and resources several the console somewhere next the on combine about between and R&D sales think this are sells clinical $X,XXX. So this the come over and continue that, disposable be

for at you little if look that website the says, a learn more. NinePoint, thing there Now is

click going of one on are just you the in video light. is little this Generally it a If used, you call reasons is to I'm we about that today, so while and see is and there it. excited there what how use

with physician not guessing. the But issues. laser, then with ablate are can when You're that And in in identify They will ablate go Oh, where samples. is put or take we're very techniques can and the at our look the then, interesting down can we go biopsy of back the esophagus. look can therapies, take in will and biopsy we and word, at you they and start mark it to to and we they itch We an care how use use you now layers. go are system, samples, Barrett's interesting. going will endoscope, to going beneath know other to or it goes you again areas various cryo then,

it's great And opportunity a all so global that the for it a think us will companies, a NinePoint Group. Endotek of for you lot of and as an at adds It this, technology look opportunity for I Merit if for -- And products expansion. you'll and have that see into great this think of I there pull-through well. other our a our and great is this opportunity give

I've itch. I hope So scratched your

Operator

Sidoti comes question Jim of Sidoti Company. line from next from the & Our

Jim Sidoti

press we for product capacity should product. constraints that through And of sort production? those levels now medical in in you the this the relying talked see rest accelerate full some So of Is the about year? release,

Fred Lampropoulos

of and a guys you we a the when were so owner this this because physicians said, product is number love developed to I Yes, have product, again, we need with this bought relationship product, facility was their and in product. demand can it Southern only existing and was is France. XX%, really and was they that problem very maybe small it eventually the meet in we a The bought

much said not talked And maintain to what then they what and Irish about we to we've the going but is, going business. again we're memory, we're this refresh move do a this, are everybody's facility. entire little our to capability to improvement in bit going to So -- going manufacturing be revenue we've to are

stock, All that and been product. lots which the building of first now substantially about has capabilities the improve our to will completed Irish launch is to facility actually now

Merit the really along It portfolio. that product take products very all almost with is got a product, the we biopsy exciting So has along of sudden BD unmatched very, the by Merit anybody else.

to got will get now days, of the see get are be going these a you've then CE I'm products, great you've what its maybe but going be to be about particularly there days talk for and done those and this start. future. quarter. thrilling the last approvals, to things to qualification, again sure full think teams they will got complex, XX mean well, really say the to And it's back to this the we're I be in are that these And going So to will and you'll locations, Mark, another, in in move capacity. it's Ireland You've start make XX year, capabilities we but launched have that we've launched to before they're got have lots I it half to And the launch producing it will are able got we covered full down to those in be do we'll

Jim Sidoti

of one little beat for of should the because bit it of the expense, was lower year quarterly the the probably to will I it BD we acquisition. interest of far the a just rest Bernard. know a then than Where basis And on the so expect expense rest timing Interest year?

Bernard Birkett

okay. X.X are I probably about million X to be you think We million should

Operator

line Research. comes from the question Petusky Mike next our Barrington And of from

line now Your open. is

Mike Petusky

use I at guess terms a capital? targets in past the you of of guess investment your the in as I have of sales allocation? that learned even of Is and guys in really R&D, your over of questions, What really what capital come? years learned executed years M&A? internally I I’m or curious you you've in last that executed you where to level, Couple returns high terms against is have few guys where few mean best have processes? Is best

Fred Lampropoulos

answer and I’ll Well, way it. I’ll to in let Bernard then

we think have learned I Mike. a things lot of

were the capacity like things at place. level. I people are then is lot if we can't time and think I is, capacity, this those But but infrastructure perform a you learned don’t because in a What that expenses, necessarily do one of put don’t investments. is the of that ago those to did that long global

does point other I product So in alternatives. line, fit we think at look at, this our it

look at is fits, this of way staff things think it the does that capital, what I at is something sorts and models Bernard his put this what it look what lowest cost forward. and it And have that you doesn’t fit. way, the that of brought. Those meet we

I we think modeling. our got better in have

Company. that but I back deals. the go make big. have the biggest look you dozen but the of out think and to you good. also think They pretty at couple got worked those they pretty always haven’t three Generally, been last the I that to are mistakes You we've always, development compared if mean I never learned two

that plan. You the thing transformative up don't do of messes some type

a then five And go then we are that. and on this, now to want that for plan to to do which And in is it three we we become to I looked see track. rewarded that going. plan want anybody company. year just allow see at what else, we're So us at what that is this to the performance We think like stay said we does keep do looked year we

the So performance, it’s but tough asset, good Bernard? a kinds of the around, lessons opportunities, products of a dialogue that I really a question the lot so think there question is it’s it’s because those a many. incentives and -- are

Bernard Birkett

we in allocation looking are at are in over last facility are years, we three also improvement, in approach the that but the side, at. it's have that’s in where on investment and at looking look what acquisition you Yes, and we we really investment it's if capital development, a improvement done. diversified Investment profit looking research

So structure put and best we that but also each we have growth to across to we diversify of to areas those rates into those allocated areas risk, that to drive to can, our the that support capital the returns in of are and also each place of and seeing. some help

not to are to it's area, of across each those all continuous drive investing one overly we capital reliant the So areas but about growth.

Mike Petusky

the I fantastic. last detail things. for whatever seeing lot higher pretty than -- be. a ROI areas M&A This case for you an level you like point other anything the that or a have really or executed might now? does because these have this one our high drive the two of to while a of I gosh, investment guess three dollars just wondering Oh, dollars is, seeing and that investment past we our same all when sort I was how in over was But you years or R&D, guess been

Fred Lampropoulos

at think we think and and to and an I I versus I the the it the to for of here talk day. driving mean up, look he to the faces say we me Yes, sitting same anything but might not him those how at execution take point a I makes eyebrow we're about. here. exercises. it I have don't markets there's doing goes should and I go talk is it’s want stuff, through me old plan idea there mature. does his long we do opportunity as over be Bernard think to

Now, room. is staff every of the member sitting in this

numbers. these know what know they their role what think I They is.

the things institutionalizing to a So done other that of job there performance internal I are think we've and the do better expectation.

strategies. we've a talk automation, cost the savings, about mix, think each tried a game words, doing the we’re the the those like things job think has other I person three like much but internal plan. sales a which better seems partner it's that I We learned on and

the whopping going the those have game of They it’s around boys Why? have the have from talk They you Jazz. that it’s just on a the Utah team. members But of If coaching, team. to a are game Hall area. the Fame plan, strategy, City Oklahoma three it’s and about they I'm the plan,

can’t win You an with individual.

team You with will a have what and here. that's we win

Mike Petusky

you the And you do be the on super quick. Two for was would comment Bernard, any Handy, CapEx it more, one what your if quarter? have for do year? in CapEx have expectation the

Bernard Birkett

then from projected XX.X investments and some we The and the more On were, CapEx in had is be that year we knew was have to that higher bit some the a little adding targets regarding and we facility, had quarter our production spends for and BDX the buildings the lines XX. we this in so land quarter acquisition also to that CapEx, from for years CapEx did XX going to first XX. the XX Mexico in in happens

Mike Petusky

us And the things executed hey, here that this, what Merit the doing way that for investors Fred, to the things there a asked or just but you Is they're multiple or it's if about that? one. one or then or you we're think, don't worked, transformed -- you and two to here. probably stock it are speak got quick last we were this what one saying underappreciated has two Obviously, like, one two it. do hey, you've about about fully is appreciate -- about really one feel investors Can release you business don't I never

Fred Lampropoulos

by products. Merit. understand it's of think we singles. it's think to actually once lot of company couple there easy saying this, that's a previously, oh, mentioned one the for show Merit not going of little about a bit when we’re we'd or and like future I to hard think in that, think are of understand what the think the we've But always hit all achieve toughest maybe to to of an talk a have I about think I But that little lot everybody do this to of Investor we dramatically, of maybe go getting pieces hard I thing because we doing. and it's to change is as of, hit out had muscle Every on all at we York, talked products. can and is hits I'm that the the I a Well, the breadth New a but kind there's we better in -- got where breadth while getting we ballpark. we’re I double, And couple I years It's And not but an its Day to bring can where to a explain I'll is point here. this part,

come people us. So understand come when will and invite they listening visit that's will here, out on and anybody I

think see when here depth I you the technology. you of come

on well mix a in four I quite he his depth years he of to as and that ago about if because and point that's made shareholders that was he things whole of well we kind well like then we've the investments rewarded You been see after the But great doing with has out know appreciation. here changed and have they think or has of be here largest product and own left came thought view, one concerned can our see just rewarded the us. we I with his that, of hung we you ought there eyes, doing. weren’t been

So I it. think part that's

think the I on a global building about talked investments I that about this call out infrastructure.

with have believe know that customer. that product you business of problem to You you you one goes products all risk, we if don’t away, these with some the here. have sale and And needed products, always as the you other the it's thing put don’t I've have at something that and of so be and important at your be point

much much, we're so it's a bold, could the company I spread because risk. be in many say if we ways can like to So larger

infrastructure, a the what you one we've So those us plan talked what years about South But to year the That presence. and plan. have Australia, done look execute it's to drives long-term, to the are going not And a warming-up. Saudi America, of talk of Look products, it's we've Central our Canada, global a XXX continue been and it's would also Asia, help That done short. were the for come. we years Russia, property, But people The would Arabia, nut it's years all it's to with idea can I business things XX stuff. products, whole infrastructure, the this Middle-East fine right, in that be you really deal, day margins. a line plans to you full big build business and hear lot facilities want don't long-term, a product they XX development. about the But in about that's things when would too. tell it's with talk doing because things great because think there you plan which cannot you be about and because I without IDeal. have no advantages ago, product a you out whether great it

more. seeing things are we've we've that But what as are do and I is we continue will underappreciated, executed on most and So, been years. to think done everything that I but do what think the things said to the for those plan I've can we

So go. you there

Operator

question Mark from next Kenmare. Our line the comes of McGrath Instructions] [Operator from

now Your open. is line

Mark McGrath

million is curious just generation? thinking And flow quick net a the XX I up I to the with you by you've in look you the looks acquisition, in million what free about think the went the regard Just or about quarter. are BD It for quarter. one. XXX through you debt year, like there know cash as XXX I'm spent in CapEx million B&D then and a had

Fred Lampropoulos

with Yes, big area on would the we probably high see was an focus and for And improvement in a to expect the the to close have XX working that in as improvement point again flow. to so expect capital million see free and I management. cash we side we the said CapEx year on

Mark McGrath

like to characterize you how it? than it or improvement leave more that Can you is just

Fred Lampropoulos

we leave. how to would like That’s

guided on on haven’t really we flow. We free guided -- haven’t cash

Bernard Birkett

Mark, your Mark, want for let to I me you if comment. I could just thank patience.

your you. that You have it, been appreciate for with we and hanging on long thank time line patience a so

Operator

Fred to our question I’d Lampropoulos over today. like that And you. closing back concludes the and to remarks. turn session call for answer Thank for

Fred Lampropoulos

hopefully Go from will future. calls I lot and think have will Well, or a a a been evening lot the here, for us and questions again, Bernard interest very of look help We very to Jazz. that’s that continued here. and we sign XX wishing support, Salt about it's Lake be good lot We with candidly thank spent, am I -- of final around. be and the City answering a understand explain for off XX will again, minutes. appreciate amazing we your now. better and time. we I to talk your you And in all forward gentlemen A you thank Good thoughts now better you night. your to you've your statement

Operator

conference. you the for Ladies may and a Everyone today's in gentlemen, day. your participation and thank This you great now concludes disconnect. program have

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