MMSI - Earnings call transcript Q4 2024 | Merit Medical Systems, Inc.

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Operator

Welcome to the Merit Medical Systems Fourth Quarter 2024 Earnings Conference Call. [Operator Instructions]. Please note that this conference call is being recorded and that the recording will be available on the company's website for replay shortly.Â I would now like to turn the call over to Mr. Fred Lampropoulos, Merit Medical Systems' Founder, Chairman, and Chief Executive Officer. Please go ahead, sir.

Fred Lampropoulos

everyone. welcome, and you, Thank mind I am our Lloyd, by Parra, would call Chief harbor the statements, please? on Financial Officer the you Secretary.Â Brian, Chief Corporate Brian Officer today us and through Legal safe Raul and joined taking Treasurer; our and

Brian Lloyd

you, presentation statements contains Thank that protection harbor safe Fred. securities federal This under laws. forward-looking receive

well realization to of Although implied be as cause or to required risks February law. should subject specifically statements.Â Â In assumptions, views important Cautionary they for Statements we believe are in today, transactions to representing risks addition, our today's or disclaim and these events XXXX, such regarding the relied any actual expressed forward-looking Forward-Looking as information from statements. these forward-looking section uncertainties. by extraordinary update statements expectations of of to as release such statements, The impacting are as presentation uncertainties could or any of and date. projections our as and not as press based regarding differ upon reasonable company the XX, except any our any applicable views and statements forward-looking by our materially results other We refer Statement upon only Please entitled obligation represent

of the website.Â Â Our our accordance generally accepted our recent on are filings most are actual discussion United results SEC, statements, to refer are accounting States. to statements factors available with cause a that could which prepared forward-looking with For also differ in from principles, please these financial which in the

directly non-GAAP ongoing and these GAAP that period-over-period page titled discussed companies. on regarding this the not important measures provide measures and will press performance addition and Financial the Please regarding can Both furnished financial and measures.Â A of calculations substitute measures website.Â I be under such U.S. with reconciliation financial underlying is may to the the of presentation of presentation consider comparisons the today's believe in with contains operations.Â This non-GAAP with comparable of our information release note release of to on and in Measures for our certain Please also certain measures our useful we information sections non-GAAP to, in Investors similarly However, financial call GAAP. entitled useful prepared for business X-K. trends refer reporting comparable measures to financial press accordance presentation call. included for, press operations not non-GAAP should the most are our SEC non-GAAP measures of financial non-GAAP be as Form today's available now other to presentation Readers financial Fred. back turn a release measures investors

Fred Lampropoulos

Brian. you, Thank

the call start prepared today's that our exceeded financial with I revenue will of more earnings provide outlined with with summary financial a on quarter the call. XX% we expectations up quarterly currency questions.Â Â Beginning end our total reported Then of quarter the year-over-year of a The start your constant of for will X% fourth quarter our high cover for full-year in review basis. fourth a the and guidance our we we me up year-over-year press basis of brief will which of a Let in-depth remarks. results range revenue during in our $XXX.X what XXXX, a results. release. agenda will constant We and growth and results. XXXX we GAAP introduced fourth a we on currency in Then open delivered the Raul of million, growth QX review

to coming with in X% quarter revenue in constant for to driven growth results strong revenue range in quarter The the performance growth delivered sales, expectations. with of from currency year-over-year. We that exceeded the results results XX% currency margin by financial largely XX.X% leveraged Specifically, non-GAAP our profitability had the approximately acquired were profit non-GAAP significantly operating of line better-than-expected organic we and points assumed.Â Â With quarter, our expected to a what X% up our XXX fourth we guidance products of fourth growth fourth deliver basis of in constant the operating respect stronger-than-expected revenue total contribution year-over-year.

work earnings fourth our off of performance were and delivered X% strategic financial which improvements in impressive XX% $XXX also objectives. our and exceeded non-GAAP performance currency significant strong pleased cash year an both as performance our importantly, a of And by well.Â Â We organic Merit. constant non-GAAP revenue margin margin, generation XXXX, to than constant currency gross growth the we the X% with high profile total which XX% are deliver of year-over-year.Â Â This including We growth, was XX.X% delivered operating non-GAAP free more expectations in to continued than most quarter, a our capping per XX% team's of hard end million, profitability for strong of operating flow commitment in highlighted direct share, perhaps in our more result up records and a growth,

targets solid delivering execution our strong We delivered the our very to quarter and that, growth, free well improving confident for program, in cash our are momentum results believe our an over fourth press strong will and December are guidance XX, profitability, strong we we focused growth reflect in deliver in-depth results as time the today's of and ending let team's proud review XXXX. continued quarterly on financial me the XXXX progress our the XXXX.Â Raul? in business, are We for our X-year in financial in in of review for flow team related in CGI financial as ability to detail and later Raul introduced continued currency in XXXX release initiatives, continued the execution, strong continued on call.Â Â We Raul constant turn the and with guidance financial XXXX.Â Now period which for

Raul Parra

quarter presented with in each reportable approximated start will growth detailed primary on in fourth our a review and with the of quarter, results performance I revenue product otherwise categories. Fred. you, all stated, sales our rates of Note, and unless total both Thank beginning are X% Cardiovascular high the we revenue our XX% year-over-year Cardiovascular our expectations exceeded basis.Â Â Fourth in segment constant was driven end segment and segment. of Endoscopy growth sales on outlined a our third by the growth in growth call. currency quarter

acquisition from Our portfolio management approximately results Cook million revenue lead $X.X our acquisition included from from $X.X the of total revenue million product revenue Medical. and of EndoGastric of approximately Solutions our of

to our increased sales strong sales above by factors: Sales of XX% products growth fourth slightly and X.X% by product acquired segments, localization and in of of organic extent, product an product and growth our increased expectations, revenue products. Cardiovascular sales constant the for or X.X% of the basis on sales driven and sales segment the by respectively.Â Â Turning quarter Endoscopy growth products, segment radar high in results management Excluding CRM Sales upside was teens. growth X%, a Growth review the intervention products, in and high X.X% was our driven therapy category of PI expectations increased following X%.Â Cardiac increased Intervention product of Cardiovascular products product fluid of peripheral low for access PI end the category. EP systems lesser the increased end and our of the a was Ebola our revenue sales of largest our the currency to Delivery primarily quarter. driver versus

our of sale call, to customers with of from was by in expected. a contributions X% of which material outside the organic the approximately by constant or Product geographic to the Intervention expectations, sales X.X%, our better-than-expected currency by the on environment sales products, increased strong basis. critical sales on we a but encouraged order as in Excluding were challenging our and sales discussed products. increased customer supply OEM summary more basis.Â Sales Custom Sales OEM the brief line of Procedural performance in acquired impacted U.S. QX, remained strong XX% increased Cardiac of assumed. our products demand well products demand what a on Solutions, the care quarter.Â Â Turning ahead chain an raw our guidance of in as product our OEM U.S. CPS were QX driven

Sales the EMEA X%, distributor organic assumed. results high while basis. markets. APAC were what sales an basis U.S. exceeded currency in constant constant by We constant organic China quarter. increased expectations. specifically, of expected, softer end and continued Our had pleased With in increased softness International World sales the demand and of from X% fourth end sales high sales see on nearly increased in currency our an were on XX% exceeding to X% in fourth modestly our basis, respect driven strong the the our than our than and Rest to year-over-year increased customers of quarter better currency on a U.S. the X% Russia region guidance in expectations, and

growth see a expected.Â Â That trends programs have see to related in volume-based continuation the dynamics XXXX. said, to continue we about We throughout of procurement to quarter-to-quarter pleased we talked variability were as

we headwinds review of our pricing performance. P&L offset better-than-expected continued volume-based a to sales Specifically, procurement.Â Turning related to of units, which saw

and basis. otherwise company's quarter non-GAAP presented all year-over-year the avoidance approximated a will the unless fourth growth the results doubt, on are For on of commentary my noted, during rates of focus and XXXX,

non-GAAP profit fourth have in included available to We release increased GAAP-reported from item XX% and our our approximately in quarter. the related website.Â Gross on reconciliations results our press presentations the

product, expense compared in XXXX year $XX.X gross geographic the margin prior The from $XX.X year-over-year up quarter increase the mix, revenue XXXX. and and expenses XX.X%, pricing, expense was from by in was increased and expenses improvements to million XX% in operating fourth increase margin SG&A favorable driven fourth of million. of X% was operating XX% increase driven the quarter period. increase freight, in gross Our quarter the distribution R&D fourth Total points. a X% to a increased XXX costs.Â Â Operating The a or income in by in basis

million, with of average was interest per Our margin expense cash pleased expense to of and quarter cash quarter, prior higher $X.XX guarantees of share of year approximately million, the used this than fourth non-GAAP of period.Â Â As the equivalents $X.XX of flow in cash pay our and generation million free a million are and we revenue results period.Â Â We profitability per expansion as cash in net year for of improvements million in the strong diluted to the quarter our additional stronger-than-expected earnings XXXX, drive letter available significant cash $XXX where improvement for both in in in to leveraged to of EPS.Â Turning period. XX, included and income loan share, and December paydown year-over-year.Â Fourth million condition. the compared million, by partially performance fourth the balances, million, the fourth XXXX sheet $X.X growth million. Merit of other quarter, to used cash of per and to Fourth We debt year Compared in equivalents by offset debt was $X.XX higher term additional share up prior expectations. by The $XX high an of debt to debt income that $XXX.X million year expense $XXX review generated working cash approximately obligations inventory.Â We flow points results of in was dilution million free debt total compared Note, compared The letter year income $X.X driven $XXX to particularly with $XXX higher of total incremental balance to other year. of terms last our an free in full represented a exceeded or associated was prior net cash period, XX.X% million of financial associated of in generated used of borrowing XXXX. net of XXXX. down of quarter outstanding in basis fourth XXXX cash million change significant QX the credit million $X.X free capacity and which the related to in XX, $XX.X total with credit EPS December fiscal obligations non-GAAP guarantees bringing expense $XXX.X more $XXX.X $X $XX with interest end cash in capital, million from quarter XXX $XX.X capacity or higher of had $XX.X our of of outstanding outstanding million net to in growth our flow our convertible year-over-year and our compared available XX% borrowing operating operating was of approximately result margin flow cash XX.X% increase XXXX,

introduced adjusted which net release. ratio we of fiscal XX Our was in as review on guidance, financial a of leverage December year X.Xx XXXX basis.Â Â Turning press an today's our to

table a ranges prior formal how our those to details items compare included period. year our For guidance press of reference, we in have the each earnings release, and which financial

growth to revenue XX% growth Endoscopy approximately currency following: foreign revenue approximately $X segment, in growth XX% ranges expect net Our segment we X% year-over-year, points of changes our revenue XX the of net of assumes and which growth approximately from in our million or net result XX% approximately to Cardiovascular GAAP XXXX to exchange headwind of guidance in from, a and to basis year-over-year. X% X% rates to

the in XXXX of and impact region. Solutions the in basis modest exchange XXXX Excluding evaluating XXXX, July for total face sales volume-based to total for constant outside our APAC in assumes The $XX is Cook expect the basis, be driven but of are Constant November factors growth of XXXX.Â Â Among outside $XX growth million following the the China, where and fiscal total in contributions we currency to from in acquisitions growth XXXX, substantially APAC related XX.X% net the currency continued X% to in to the expect XX.X% project high headwinds changes double-digit teens revenue we expect EMEA, revenue by the at in respectively, the total is the range approximately net to projected closed Rest from low when items: the assets of to X.X% U.S. we unit First, X, X.X% assumes we revenue inorganic to year-over-year currency of midpoint U.S. range currency sales growth on in growth related and range a of on the revenue growth World foreign growth in from guidance U.S. the currency region rates, range midpoint in a constant in growth expected X, Medical procurement.Â Â Second, the other the growth our aggregate. our year on revenue growth consider also million EndoGastric constant and growth

this Wrapsody total constant for of U.S. XXXX net revenue the CIE full revenue, range million in our guidance period, year-over-year.Â Â Third, from to we a currency the sales X.X% continue Excluding inorganic million. range growth in of $X the reflects X.X% of approximately on basis revenue organic to year $X forecast to the

on to Our XXXX to respect third our in Wrapsody in larger the other quarter.Â With share anticipated guidance situation of be impact modified by remain unknown, countries depend any will such XXXX new nature impact most could imposed during measures that unchanged the revenue the weighting first XXXX, factor XXXX full-year the quarter to weighting representing factors, continues we of of profitability assume not of the half of our an revenue The tariff in of expect diluted for non-GAAP any range XXXX or of in remain currently fourth any tariffs.Â Among financial other by for earnings second half to government of guidance a per timing, which will revenue or U.S. the in XXXX CIE tariffs year-over-year. amount, our business the Note, assumes on range a jurisdiction.Â The X% $X.XX, guidance are unclear. of tariffs the increase the other substantially the X% structure versus larger and does tariff that changes financial and potential tariffs scope, versus $X.XX U.S. ultimate retaliatory and of XXXX.

for on expect of quarter the first assumes basis. a quarter up XXXX.Â Â Specifically, in expect of quarter the X.X% in approximately to approximately EPS basis $XX to a we in a to approximately growth debt in like related markets.Â Â Note, constant $X.X other expectations is growth tariffs in to non-GAAP This or currency assumption also in $X.XX sales in situation.Â Â For approximately $XX range we $XX the approximately retaliatory to X.X% frequency to in provide could approximately million an dilution year-over-year. directly million range This recent our our step-up interest up related increase The inclusive first XXXX we represents our Additional South change include XXXX, operating count to do X.X% are carefully.Â Given a the cash of million XX% share of capital rapidly changing expenses or generate expenditures rate free of a currency tariffs diluted income our GAAP year. XXXX.Â Â Finally, we invest of or and basis million not monitoring approximately profitability XX.X% last which tariff is our to currency center currently of and business. new impact our actions policy, would total changes XX% situation, fiscal our year changes announced the to anticipated incremental $XXX million.Â Â Note, provide earnings the we related quarterly to million Rather, We $XXX expectation deem visibility at assumes we further in non-GAAP XX.X% revenue we shares other of distribution average in will impact year constant calls we on gain and in basis response in X% regarding growth as intend range The additional international this midpoint updates a reflects and public Non-GAAP formats each on news to rumor. updates purposes, to of to to appropriate or related certainty XX.X as item to inorganic Utah. provide first investment this the non-GAAP XX.X%, points flow and expectations net of non-GAAP facility. approximately least transparency growth sales that modeling tax to convertible the X.X our our million. outstanding of of financial million expectations approximately year. margins CapEx points million of in XX guidance shares Jordan, revenue weighted compared U.S. $X constant XX our approximately of and to to growth interim

to contributions, to for we of $X.XX margins inorganic of range the XXXX, to quarter non-GAAP compared range first for currency basis.Â Â With in approximately X% of expect of to X% our comments. first will closing to XX% now call approximately range the quarter Excluding XX.X% operating on And in revenue XX.X% the $X.XX is year.Â I year. the back we respect non-GAAP expected our the to total constant to organic Lampropoulos expect EPS expectations profitability increase $X.XX in to Fred compared turn last Fred? an last

Fred Lampropoulos

Raul. you, Thank

Before U.S. Wrapsody Radiology to just Operator, are for is on the program wraps now we we the XX-month remarks. CIE the wanted well, would looking Society Interventional from add of call you much the presentation XX.Â That questions, to data lineup our that for very of trial I AVF March up at open our WrapsodyÂ WAVE progressing open questions? Sunday, and the forward prepared

Operator

And [Operator of today Sandler. will Instructions] be question first coming Bednar Piper from the the line of Jason

Jason Bednar

guys. here, a Congrats nice I gotten to year on with to finish questions few want the a Raul, EPS the here. I've guidance. start

the think models accounting little you'd has like EPS on that guide that's influencing the coming because we surprised I be maybe it's the weren't from been seems there things the just Street convertible maybe of maybe given maybe a as than one it's bit that conservative some business how that note.Â But other It should Street. thinking about the factors folks thing today? any in lighter that are before strong or identify the

Raul Parra

that the Obviously, question. for excited we're Super XXXX. excited the about great year about together. a it's look, No, Yes. putting super performance

growth, side, I margin.Â Â As if strong the financial on organic one on probably currency of think as that operating best, to But X.X% XX to are things of solid, not just XX the want I the performance everybody a far X all the together, around. there to ever basis constant was consider. X.X put revenue the kind beat we've points best, EPS it

additional million got $X acquisitions. we've is expense cash the interest Recall, had million versus last income the large year. year. last one first we $X of of We a The interest an did balance of kind

a probably bought on convert. about roughly headwind the think to hedge and about that's it to second EPS growth.Â Â And there's that, the I highlight more the of for make accounting So sure $X.XX because between is the want one, disconnect how which when then you GAAP treat we I that you dilution important, the

growth have things more So that what impact. you everybody somewhere those by line that's items.Â Â So place shares going around dilution X% think in does but to be up have we was we've significant the incremental covers those in in, that $X.XX. of impacts $XXX. added $X.XX. earnings essentially until on that million that's hedge a if that above There's exclude I X factor kind When you get to we up our a we X.X probably the end an expecting, us with convert And again, XX%

that just works, disconnect from a the that's And so for hedge benefit economic there between way which we account but treat how how versus it GAAP and it. of to is going is the standpoint, that's we're little a a disappointing, GAAP

Jason Bednar

range than I had if to better I of you're I guess to take better we target light with to some you've the still Or looking business a end should there. upper and want you these margin due and the Cook.Â Also, in of is today a year Wrapsody here. just you to 'XX factors? range stab that the think or take or got different XX% feel targets at EGS that the M&A of from that know at ago the that use? do of seeing benefits something ask, did step right midpoint the in out XX% I about there, back range a it already maybe margin is the

Raul Parra

that question, Jason for Thanks Bednar.

minimum that's that man. and Right But the XXXX on I we're super of now, sure just out. how question. currency, excited know $XXX probably But We're just free played flow. confident, CGI you already constant margins And I'll answer we're minimum year it. to organic X great X% of we're of yes, committed think said, to all XXXX. obviously, of a LRP look, making and to like a in committed XX% a minimum going in cash we're about and million I operating how execute we I'm say. hyper-focused in

Operator

Biegelsen question the of the line of coming Wells And Lawrence will be next Fargo. from

Larry Biegelsen

Where these are should long-term strong On Fred, I I QX. like start? really imagine Fred. in XX% OEM, contracts,

growth So Is it until in how in that other laps the that words, next XXXX? XX% think quarters In OEM we jumping-off good QX? a for about few point? should

Fred Lampropoulos

let that, in guidance Well, just our what the assumed quarter ahead Yes. me of third call. well of first say was it all,

it Our OEM customer supply past. challenging demand, outside And better-than-expected remains do getting some on as has. We and what's the quality. of demand. again, in what but materials order I back Merit chain Larry, at strong business, have been discussed U.S. always day, some side the U.S. always hallmark OEM the just is impacted by the for thing, of carries think the day the end But it's we're we've and expected. Products raw contracts. were Merit's reliability that's But more goes and to the line we the the OEM that in bottom

deliver, had really and So did did. And we all build team and a we good stuff the Black we and were I job. think confident Mike numbers, his to which the in

Raul Parra

I mean, obviously, do they've don't over a we able in and level their been Yes. to the adding, the maybe Larry, underlying category guide high execution several really last growth. OEM we But years. have and of what product to confidence I mean,

numbers. into think that of we OEM everything So I baked our out is expect

Larry Biegelsen

Wrapsody, here. on multipart One

Fred, feedback, onÂ Wrapsody. early So just

seem I think, by includeÂ Wrapsody to recall you'd that said the in just you organic. sales us Raul, I lastly,Â Raul, the the quarter. U.S. minimum And doesn't -- give said X% you

to about points basis Is it? way right XX about think that year. the this contributes SoÂ Wrapsody

Raul Parra

Yes.

of to what obviously, you include Larry, that's gave did actual we constant currency by did that growth, $X asking yearly $X we going launch But were is we So the not the onÂ Wrapsody, organic million. revenues were say provide million and if quarter. to about. not We guidance U.S. theÂ Wrapsody CGI

Larry Biegelsen

Any feedback, Fred? Yes. early

Fred Lampropoulos

The about product. excited great. just We're response the is initial market

of And program therapy introducing SIR I would. are the and meeting. and think XX-month in discussion performing the we products And a the renal together the whole at we're RTG we're looking that as physicians the we to hoped by full put those data forward and group, that group, numbers. confident it

invested The to time. first it's took means a been the We about of a run. it and us, very product in of And couple encouraging. Larry, We months excited have nice. We're lot what the long lot.

Operator

Oppenheimer. And of coming question be line Lichtman the Steven next of from the will

Steven Lichtman

quarter. if Gross in the Wondering, gross what margin XXXX operating the on you was the you're standout implied the of some margin And seeing in could line? drivers margin a talk margin Raul, gross is guidance? about

Raul Parra

essentially going me in improvement what throw kitchen mean investors say we with kind outstanding. a the to to knowing U.S. fourth happened favor be see, I out there. the margin was be you efficiencies, with it is margin, our we hit that basis Yes. was strong. The all, gross strong. are not have heard mix the to to essentially time gross and there's this going a of point to gross everything, margin, run the execution was And Well, that's on along and be that other work hit say after be it. basis and around better. the lot sink with really the of sink.Â Â And take first approach lot going to going tackle And a this heard run of are go things Steve, I'm analysts. When XXX me our we in to is our of on covering what it's home just just there's -- honest was that kind is in the you've kitchen pricing you. The on quarter just at the to what great. of things our OEM logistics, to to that a going from

strong. was mix Our

call they out, because have just at I a high group, executed operations level. Our to really

Steven Lichtman

growth? Unit

Raul Parra

growth unit strong. yes, was And

have would hit we that everything So really in gross the wanted in fourth. margin

as what end, we're feel We margin we XX giving. as see, And guidance, XXXX we to think and of at XXXX. -- margin. be the margin would the would margin We're launched would operating CGI, a gross gross the give accretion, guidance. really mix gross we that low of can the XX do about operating we Now we as margin were give know, least give there don't improvement strongly you leverage. in going you end, high be pretty as originally on guidance. far most And from points When to basis clear I coming on OpEx

not just plan so it I'll that, but think at that And leave changed. has I

Steven Lichtman

I second groundwork? that know of training the you you're investments to are of qualitatively, some question, on the inÂ WRAPSODYÂ this for guess, that about then just the of And you're lay sort making building talk doing I I talked the about, types guess seminars. guess, you year? that Can I the what things

Fred Lampropoulos

Yes.

I think, training, highlighting that it we've And and to from the of PPT the the going running that reimbursement meeting. Steve, of We're the with a NTAP lot things it. going to exercises things -- the with and talked it. running we're project, of trade about understanding, and not through comes away shows, The sort down people-- exercise appropriate

Raul Parra

Registry.

Fred Lampropoulos

people think -- We're Yes, XXX are the almost registry. the so or on we're those at things. and that. look out XXX I of And important

a business Raul continue doing we're in I high the maybe of they So level force. the made, but we've also that at I is and U.S., the importantly the European, just left just on. sales our was play. And enthusiasm and and most what for the the just and psychology investments role we of U.S. the

know feel to people nice all board win, our of it's across our that's So with can products. and that you the how just

Operator

line Baird. of coming is the Rescott David of Our next from question

David Rescott

questions us, from ask finish Congrats of and I'll year. them to on the both upfront. the Two strong

to thought you year to have First, it. being were heard I'd and and for out lower for as set on revenue that's that business And would touch fromÂ Wrapsody. onÂ Wrapsody, laid relates today there's and wondering make to anything for setting about top incremental to guide upside was full Clearly, guide little the the be then an when the If sure I you the any year? either that you of case, for want talk X% I'm about Endoscopy, out that the year, for on a assuming.Â So -- it Endoscopy if on would margin X% you the year? the the set EGS of deal this would can fair maybe this segment or we that it be to EPS full kind Endoscopy than benefit you say that guide the a assume the kind could also how incremental underlying from the the have guide what be integrated is it you of that that I

Raul Parra

Yes.

clear, So I included you, on piece, was not confused X% goals, I David. X% meant and be just CGI original theÂ Wrapsody in the to sorry the to if when

in we've guidance clear, be to we XXXX our the disclosed far right? just already target to included as forÂ Wrapsody already as you. X% X% gave clearly, revenue So yearly is the that in Obviously,

So clear? is that

David Rescott

Yes.

That sense. makes Okay.

Sorry.

Raul Parra

we And about feel as pretty strongly Endotek, that as far think got I the we've there. out guide

on. we've two you going an of remember, sales forces If got integration

we've done complications the a sales X here I knowing is one integrating just of think guidance forces. group, what measured that for

products, about realistic but excited We we the were having the to about learning I curve.Â And think lot are super force. new is as to the of endoscopy we've and talked and Fred with products. just guide achievable sales a we team, -- I there excited know tried you mentioned, guidance. sales know, they're our a I U.S. at

there's say done. really would what nothing to that's see I here So than other we've

Fred Lampropoulos

so are ahead I the And time. did we the fully this think may David, City. into past, of that magnificent and of have is transferring. product Salt but training discussed our operations aware, in All Lake the a and did we integrated in closed, job And you'll be and we TSAs

has part So all completed as that well. been

Operator

Company. of Mike next coming the the of & Needham Matson question from is And line

Michael Matson

to I revenue with to start want this guess I you're year. expecting currency impact the

It you're some I of Can X% headwinds to mean you talk the in maybe maybe. I said relative don't about you X% I've revenue or talking -- know your something XX basis of to low companies peers. seen points. on think 'XX. doing kind seems of level if kind about I hedging any

Raul Parra

Yes. I do, hedging. do mean we

the We imagine, you climbed. also of is program has and good minimize we're number. our U.S. rolling from sales try think impact hedging As also Remember, revenue about kind here the percentage a a track the We right as and can of FX. our program. feel has number on

than heavy U.S.-centric been So historically. we're have more or we

Before more we were XX-XX.

of Now range, Mike. XX-XX we're in to sitting that kind closer

in the and have some helps. of we that hedging helps So I But that obviously a think impact. minimize place, do program

Fred Lampropoulos

year-over-year around. don't it's years. just add, We We many, I don't it. been We consistent many Can don't time We don't Mike? for horse consistent, change markets. It's speculate.

Michael Matson

for product going on the pricey I obstacle in trial know pivotal the -- international doing not markets. I any you've U.S., know it's kind what data I give U.S.? one And -- numbers know guidance I what that's and to an then well some I just know is the helped U.S. those has the more of probably Wrapsody. given kind just the don't but product. And markets? But in in of you're OUS. for wondering a from all the price-sensitive of how if am outside at is,

Fred Lampropoulos

that that it have of and sales product. group the different with other the an not even the of RTG Well, have we been the obstacle, group in has with strong on said, receive I'll on an RTG say pleased, the product. responses to meeting Wrapsody, with force think the and because we're as there we geographies, the is quite simply European I left carrying positive And that encouragement we And don't we though just products. sales continue

the sort SIR looking of some and so like folks coming up interpret to will the and detail you And a bunch the and impression, meeting of their forward thing. by of they that events discuss the professionals, that give others can manufacturing we're not

about that. excited So quite we're

Operator

James. question next Raymond Hu will the Elaine the from line And of coming be of

Jayson Bedford

there anomalous Jason. very couple one-time in or strong gross It's here. margin anything number? of questions A fourth-quarter Was the

Raul Parra

strong our execution was by again, it No. team. really mean -- I just just

Jayson Bedford

do What's Cook to an from EGS, integrate standpoint and operational if left to anything?

Raul Parra

Yes.

the year The where is have sales as fully EGS that is So force. thing you this a first Jason, know, integrated. year, we combined only

leave products. So they we training now. combined did there's away, forces as X, products, force sales were how know, the sales January EGS last you and year, as sell on to separate went and as X a the endoscopy that group different our sales

a We're continues Cook. on But everything already not is this European the the to to There yet, board looking next major be amount few sometime in obviously than that yes, of and a ahead APAC on of but side, that other We're cash to Manufacturing if year. everything be continue are is year, substantial a to of integrate part not pace, part, certain So TSA. done integrated. have done. that, manufacturing countries continues if work some by we countries done situations. Cook order cash for products with everything.Â Â On is done. we not early under most EGS Order the and the to to fully

Jayson Bedford

I And SKU just last rationalization year. 'XX? called lastly, notable rationalization, Is anything out know SKU you've in there I think, around

Fred Lampropoulos

to over amounts into of a we the did always we what had and of That's build we smaller part a But think of I have those a sorts month CGI an pack XXX. that fits that a -- XX things X,XXX look and program at ongoing we there's products before, Listen, things. of our business objectives continuous the something where to instead moving customers or internally. take

Raul Parra

about, saw clearly, talking is To this product forward. Fred just business work have material to management. the what rationalization we part don't as going the as that scale life Yes. as doing pack on, I what was last continue mentioned, But we're any year. Fred cycle of that impact SKU obviously, we you mean far year of

Operator

from And John be the our next question will of Young of line coming Canaccord.

John Young

in Wrapsody. to the year. get Congratulations X want March on a just first start guys Did the I on yet? strong end of deadline you before TPT the application

Fred Lampropoulos

is jump Yes, answer on and them were in the time. Both of I'm NTAP of sorry. the kind are that. TPT The filed in. yes, I

John Young

you business, not Should And supply materialize. highlighted of supply we expect chain OEM really going any OUS XXXX in still the any challenge did on obviously, then the impact forward challenges? chain

Raul Parra

Yes.

we that chain one And the of able strong raw that our enough if of up last a one we them to of you And ramp one products was products. production sufficient one remember, being can for components for secondary X the year. are there then get supply having the fast issues demand. were think to materials I was had

than most But to an confidence is those we, I significantly so And higher I our we it our eye during solved have say, the say I call. keep issues. on third was, would think of think continue part, level that them. for quarter

John Young

sneak could third. just then And in a maybe I

for You the quantify on were not pretty ability high hedging today this at efforts Merit? the But really you're other to ability guys to anything taken from what or is Ireland And are the just tariff not going more have crystal included for Mexico like level, maybe facilities or manufacturing guidance or mitigation you Utah, clear any the today. do you in to that to point? impacts move near-term

Raul Parra

we've just just John, so internally and I'm are sense. things moving frankly. And impact. fast one things done changing being drastically make area to try mitigate there's the manufacturing from investments if quite mean so I and to another that making honest, not minimal, does and any They're

don't you usual, we a but people the now in some what think tariffs let's included it's can I us, a business it. do administration or be that in going control. the we so had think did lot could you not lot, know that or are had those And also last as because I control for of target countries people Trump what's happen.Â Â And to

very we something best execute and the on hyper-focused just XXXX be when We're official. that announced nimble, our those. is goals, Let's is adjust to let's we'll can

Fred Lampropoulos

But ever just we've really, you. thumb had with John, X conversation said always do watching, don't during one the of to have the and it. think before. we the to I've that in the administrations I to is changes we've X with but pointed our history we it's on We've we're Raul team as tariffs survived company. overreact. American our presidents want We're listening, dealt out, And thing

talk can something we as about more soon it's as appropriate. So it when clear, we'll get

Operator

question line of coming Michael next will be Petusky of the Our from Research. Barrington

Michael Petusky

I'm of addressed this. forgive of closer speak then activities. the new sort first to if if a we to me. as just assuming to this head QX do off is Raul, of lot it's to and speak into likely the sort So 'XX? half normal you back or if that can was have expense, had in I Wrapsody that with But this, distracted pop-in you've I briefly to may the R&D But missed a

Raul Parra

to honest some look There things to the at say kind investments like make some standpoint. wouldn't we gross Look, it's a We was normal. felt from wanted R&D. a I in new Yes, you, with were Mike, consulting to pretty be strong. we needed of margin short-term some

And so we long work thought we that had and our help with some was overdue. consultants in us

don't products, we're took we so levels with of progresses focus -- blow as that will historical I the trend we of either. the Obviously, on R&D. think that. and advantage not we water out And feel But therapeutic I time clearly, tend comfortable think to we to more upwards. And of our R&D looking

levels. effective, at the the think I our think and we that right plan. made for Sufficient is we've investment

Michael Petusky

wondering to guidance year. then going of it Do Obviously, a this I'm half, in it's free of just will cash to the be terms matter first generation. of really sort number that's CapEx. where in likely come half? you And second cadence have because any Or

Raul Parra

Mike, waiting I wish for response you. show I We keep had a good to to up. winter

about talking build pouring to continue And facility across the day. just We the so we street. footings were

freezes or the today, Just don't Normally, can't to yes. and want you ground do that that. do necessarily

or till you so hold And summer. spring off

has been here the in weather pretty mild And so Utah.

continues. building the so And

to will have think about We But all that We're feet executing I not on years. in going We're provide the the could we I X with done going mean, make number. we one in our we part It snow we flow We've I know that had X number as over don't just disappointed I focused didn't for mean, have even because more of $XXX highlight it's strong happened XX. be it. kind CGI to before.Â Â So could. build we snowstorm, that of additional I'd on just obviously, for that's I cadence keep if of several think Utah. last next million here outstanding. other And year. fourth as and May cash We hours, wanted is which the the the the do is CapEx a just obviously, talked I'm efficient we than say, this over quarter. $XX last to we've yes, free you would didn't control a us million you. goal. clearly a program time. the CapEx We'll had Now to facility,

Michael Petusky

year really It Congratulations. fantastic and a was quarter.

Operator

question & Jim from next of be coming our the Company. And Sidoti Sidoti of line will

James Sidoti

help at you little CapEx -- years. million is you? $XX distribution for couple in up following How the think What double done do on question more a heard I that $XXX the to million that to CapEx double is what of last that going say Just which center? year, I than get about because you've you from

Raul Parra

we've Well, X essentially -- in ways.

The old. first The efficiency XX currently one standpoint. years almost is is just we from have, Jim, an system

essentially lot system. we there the its it's think new of we're of other kind So met that distribution end systems out our better at centers. of a are be efficient with can And using life. more X There we significantly just

talking finally we sure the we've from needed the been We've it, do system, can the I we at years, felt like we so squeezed and for current we we a sufficiently. all were right probably size to this did think, that And what postponed to kind of make and we standpoint. out distribution X that about of juice

Fred Lampropoulos

and back are a money it that the pick of and and and stuff bring resins downtown this have to have was of I things out. building Jim, lot offsite. it to spending go the other is like convenience expense side that of in going we eliminate will to say, stored up be it They'll having

there's and so that the so Coast, our the there's Richmond keeps too, to that for East an And West. customers well. But it it need creeping can we we So to equilibrium is I as we serve back have get the biggest one, efficiency. think

all and expand cap sits would machines any our those you have here. second discussed Yes, additional who have site additional the we our reasons for additional molding, And we capacity be will our capacity room there's there. of But opened molding moving molding main currently to the add Si visited street. we South seen on have across the I in the we've mean the by we right have in distribution is So that yes, that can't capacity. machines. Luckily, Jordan Mexico. as up look need more

goal. that's So the

James Sidoti

pretty free strong you're increased flow going It some still to sounds CapEx. this even generate cash like with good

Raul Parra

the numbers $XXX again. million. minimum We million of those repeat no, look, Jim. a under me there, do you Thank we'll opening Let $XXX for hit CGI. But

way million we're think the well just we think least at with We there. I think do yes, we our did. $XXX I somewhere pretty on we're confident But can feeling $XXX million.

James Sidoti

Will that the debt paydown. last part So of years, be large to has of again the in case couple XXXX? that a gone

Raul Parra

for balance to cash obviously front. M&A clear the wait on make sense put on our We've We'll that a and Jim, opportunities strategy for us. got continue sheet,

really started that to are to think comfortable that We're that I adding the deeper have with with that. us in at feel we assets and help and you allow additional us finding bag. points see also accretive are growth call can guys get margin

Operator

back you. Thank call today. session And I Q&A to the go That FredÂ LampropoulosÂ for sir. conclude would the for closing over does like to turn remarks. Please ahead,

Fred Lampropoulos

know evening. signing Well, earnings as ladies your it's Salt off events and time to gentlemen, Good a City. season. wishes very from look during we forward Lake all to thank you. reporting necessary. I the and We appreciate interest, busy Best

Operator

in conclude for conference does today's today's you program. participating call. Thank This

You all may disconnect.

Merit Medical Systems (MMSI) 25 Feb 252024 Q4 Earnings call transcript