[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section presents the unaudited consolidated financial statements and condensed notes for Q1 2023 and 2022 [Item 1. Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20%28Unaudited%29) This section presents the unaudited consolidated financial statements and condensed notes for Q1 2023 and 2022 [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) The consolidated balance sheets show a slight increase in total assets and stockholders' equity, with a decrease in total liabilities as of March 31, 2023 | Metric | March 31, 2023 (in thousands) | December 31, 2022 (in thousands) | Change (vs. Dec 31, 2022, in thousands) | | :----- | :---------------------------- | :------------------------------- | :-------------------------------------- | | Total Assets | $1,684,109 | $1,663,966 | +$20,143 | | Total Liabilities | $512,454 | $519,569 | -$7,115 | | Total Stockholders' Equity | $1,171,655 | $1,144,397 | +$27,258 | | Cash and cash equivalents | $57,945 | $58,408 | -$463 | | Inventories | $289,581 | $265,991 | +$23,590 | [Consolidated Statements of Income](index=6&type=section&id=Consolidated%20Statements%20of%20Income) These statements detail revenues, expenses, and net income for Q1 2023 and 2022, showing significant year-over-year growth across key profitability metrics | Metric | Three Months Ended March 31, 2023 (in thousands) | Three Months Ended March 31, 2022 (in thousands) | YoY Change (in thousands) | YoY Growth | | :----- | :----------------------------------------------- | :----------------------------------------------- | :------------------------ | :--------- | | Net sales | $297,565 | $275,415 | +$22,150 | +8.0% | | Cost of sales | $159,203 | $154,508 | +$4,695 | +3.0% | | Gross profit | $138,362 | $120,907 | +$17,455 | +14.4% | | Income from operations | $26,383 | $15,233 | +$11,150 | +73.2% | | Net income | $20,703 | $10,545 | +$10,158 | +96.3% | | Basic EPS | $0.36 | $0.19 | +$0.17 | +89.5% | | Diluted EPS | $0.36 | $0.18 | +$0.18 | +100.0% | [Consolidated Statements of Comprehensive Income](index=7&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) These statements report net income and other comprehensive income components for Q1 2023 and 2022, showing a significant year-over-year increase in total comprehensive income | Metric | Three Months Ended March 31, 2023 (in thousands) | Three Months Ended March 31, 2022 (in thousands) | YoY Change (in thousands) | | :----- | :----------------------------------------------- | :----------------------------------------------- | :------------------------ | | Net income | $20,703 | $10,545 | +$10,158 | | Other comprehensive income | $621 | $1,338 | -$717 | | Total comprehensive income | $21,324 | $11,883 | +$9,441 | [Consolidated Statements of Stockholders' Equity](index=8&type=section&id=Consolidated%20Statements%20of%20Stockholders%27%20Equity) These statements detail changes in stockholders' equity for Q1 2023 and 2022, reflecting an increase driven by net income and other comprehensive income | Metric | March 31, 2023 (in thousands) | January 1, 2023 (in thousands) | Change (in thousands) | | :----- | :---------------------------- | :----------------------------- | :-------------------- | | Total Stockholders' Equity | $1,171,655 | $1,144,397 | +$27,258 | | Common Stock Amount | $681,108 | $675,174 | +$5,934 | | Retained Earnings | $501,476 | $480,773 | +$20,703 | [Consolidated Statements of Cash Flows](index=9&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) These statements break down cash flows for Q1 2023 and 2022, showing increased operating cash flow and a significant decrease in cash used in financing activities | Metric | Three Months Ended March 31, 2023 (in thousands) | Three Months Ended March 31, 2022 (in thousands) | YoY Change (in thousands) | | :-------------------------------- | :----------------------------------------------- | :----------------------------------------------- | :------------------------ | | Net cash provided by operating activities | $14,545 | $12,010 | +$2,535 | | Net cash used in investing activities | $(14,856) | $(9,868) | -$4,988 | | Net cash used in financing activities | $(497) | $(14,240) | +$13,743 | | Net decrease in cash, cash equivalents and restricted cash | $(432) | $(11,987) | +$11,555 | | End of period cash, cash equivalents and restricted cash | $60,126 | $55,763 | +$4,363 | [Condensed Notes to Consolidated Financial Statements](index=11&type=section&id=Condensed%20Notes%20to%20Consolidated%20Financial%20Statements) These notes provide additional disclosures for the unaudited consolidated financial statements, covering key accounting policies, financial instruments, and operational details [Note 1. Basis of Presentation and Other Items](index=11&type=section&id=Note%201.%20Basis%20of%20Presentation%20and%20Other%20Items) This note clarifies the unaudited nature and U.S. GAAP compliance of interim financial statements, noting that Q1 results may not predict full-year performance - Interim financial statements are unaudited and prepared under U.S. GAAP, including normal recurring accruals[20](index=20&type=chunk) - Results for the three-month period are not necessarily indicative of full-year performance[20](index=20&type=chunk) [Note 2. Recently Issued Financial Accounting Standards](index=11&type=section&id=Note%202.%20Recently%20Issued%20Financial%20Accounting%20Standards) This note discusses recent FASB ASUs on Reference Rate Reform (LIBOR transition), noting the company has not modified any contracts due to this reform - FASB issued ASUs 2020-04, 2021-01, and 2022-06 regarding Reference Rate Reform (LIBOR transition), deferring the sunset date of guidance to December 31, 2024[21](index=21&type=chunk) - As of March 31, 2023, the company had not modified any contracts as a result of reference rate reform[21](index=21&type=chunk) [Note 3. Revenue from Contracts with Customers](index=11&type=section&id=Note%203.%20Revenue%20from%20Contracts%20with%20Customers) This note details the company's unchanged revenue recognition policy and disaggregates revenue by segment, product, and geography, showing an **8.0%** year-over-year increase - Revenue is recognized when customers obtain control of promised goods, reflecting the expected consideration[23](index=23&type=chunk) - Revenue is disaggregated by reporting segment (cardiovascular, endoscopy), product category (peripheral intervention, cardiac intervention, custom procedural solutions, OEM, endoscopy devices), and geographical region (United States, International)[24](index=24&type=chunk)[25](index=25&type=chunk) Revenue by Segment and Region | Segment/Region | Three Months Ended March 31, 2023 (in thousands) | Three Months Ended March 31, 2022 (in thousands) | YoY Change (in thousands) | YoY Growth | | :------------- | :----------------------------------------------- | :----------------------------------------------- | :------------------------ | :--------- | | Cardiovascular | $287,976 | $266,936 | +$21,040 | +7.9% | | Endoscopy | $9,589 | $8,479 | +$1,110 | +13.1% | | United States | $171,360 | $152,992 | +$18,368 | +12.0% | | International | $126,205 | $122,423 | +$3,782 | +3.1% | | Total Revenue | $297,565 | $275,415 | +$22,150 | +8.0% | [Note 4. Acquisitions](index=13&type=section&id=Note%204.%20Acquisitions) This note reports a **$2.0 million** equity investment in Solo Pace Inc. in January 2023, acquiring a **19%** ownership stake - In January 2023, the company invested **$2.0 million** to acquire a **19%** equity interest in Solo Pace Inc., recorded as an equity investment at cost[25](index=25&type=chunk) [Note 5. Inventories](index=13&type=section&id=Note%205.%20Inventories) This note details inventory composition, showing an increase from **$266.0 million** to **$289.6 million** as of March 31, 2023, primarily in finished goods and raw materials Inventory Composition | Inventory Category | March 31, 2023 (in thousands) | December 31, 2022 (in thousands) | Change (in thousands) | | :----------------- | :---------------------------- | :------------------------------- | :-------------------- | | Finished goods | $153,275 | $147,051 | +$6,224 | | Work-in-process | $34,646 | $29,534 | +$5,112 | | Raw materials | $101,660 | $89,406 | +$12,254 | | Total inventories | $289,581 | $265,991 | +$23,590 | [Note 6. Goodwill and Intangible Assets](index=13&type=section&id=Note%206.%20Goodwill%20and%20Intangible%20Assets) This note reports goodwill at **$360.3 million** as of March 31, 2023, with no Q1 2023 impairment, but notes a **$1.7 million** intangible asset impairment in Q1 2022 - Goodwill balance was **$360.3 million** as of March 31, 2023, with no impairment charges in Q1 2023 or Q1 2022[26](index=26&type=chunk) - Total accumulated goodwill impairment losses remained at **$8.3 million** as of March 31, 2023[26](index=26&type=chunk) - A **$1.7 million** impairment charge for intangible assets was recorded in Q1 2022 due to the planned divestiture of the STD Pharmaceutical business[30](index=30&type=chunk) Intangible Assets Net Carrying Amount | Intangible Asset Category | March 31, 2023 Net Carrying Amount (in thousands) | December 31, 2022 Net Carrying Amount (in thousands) | | :------------------------ | :------------------------------------------------ | :--------------------------------------------------- | | Developed technology | $227,203 | $237,522 | | Other intangible assets | $36,681 | $38,350 | | Goodwill | $360,291 | $359,821 | [Note 7. Income Taxes](index=16&type=section&id=Note%207.%20Income%20Taxes) This note reports Q1 2023 income tax expense of **$4.8 million**, with the effective tax rate decreasing to **18.8%** due to discrete items and higher pre-tax income Income Tax Expense and Effective Tax Rate | Metric | Three Months Ended March 31, 2023 (in thousands) | Three Months Ended March 31, 2022 (in thousands) | YoY Change (in thousands) | | :----- | :----------------------------------------------- | :----------------------------------------------- | :------------------------ | | Income tax expense | $4,797 | $3,626 | +$1,171 | | Effective tax rate | 18.8% | 25.6% | -6.8 pp | - Decrease in effective tax rate primarily due to increased benefit from discrete items (contingent liabilities, deferred compensation)[33](index=33&type=chunk) - Increase in income tax expense primarily due to increased pre-tax book income[33](index=33&type=chunk) [Note 8. Revolving Credit Facility and Long-Term Debt](index=16&type=section&id=Note%208.%20Revolving%20Credit%20Facility%20and%20Long-Term%20Debt) This note details **$197.7 million** in long-term debt as of March 31, 2023, under a credit agreement providing **$150 million** term loan and **$600 million** revolving credit, with the company in compliance Long-Term Debt | Debt Type | March 31, 2023 (in thousands) | December 31, 2022 (in thousands) | Change (in thousands) | | :-------- | :---------------------------- | :------------------------------- | :-------------------- | | Term loans | $121,875 | $124,688 | -$2,813 | | Revolving credit loans | $75,948 | $73,500 | +$2,448 | | Total long-term debt | $197,673 | $198,009 | -$336 | - The Third Amended Credit Agreement provides for a **$150 million** term loan and a **$600 million** revolving credit commitment, maturing July 31, 2024[35](index=35&type=chunk) - As of March 31, 2023, the company had **$197.8 million** outstanding borrowings and approximately **$521 million** available borrowing capacity[40](index=40&type=chunk)[123](index=123&type=chunk) - The company was in compliance with all financial covenants (Consolidated Total Leverage Ratio, Consolidated Interest Coverage Ratio, Facility Capital Expenditures) as of March 31, 2023[37](index=37&type=chunk)[38](index=38&type=chunk)[39](index=39&type=chunk) [Note 9. Derivatives](index=18&type=section&id=Note%209.%20Derivatives) This note explains the company's use of interest rate swaps and foreign currency forward contracts to mitigate market risks, recognized at fair value - The company uses interest rate swaps and foreign currency forward contracts to mitigate interest rate and foreign currency exchange rate risks[42](index=42&type=chunk)[44](index=44&type=chunk)[49](index=49&type=chunk) - As of March 31, 2023, the company had a pay-fixed, receive-variable interest rate swap with a notional amount of **$75 million**, fixing the one-month LIBOR rate at **1.71%** until July 31, 2024[47](index=47&type=chunk) - As of March 31, 2023, the company had **$98.0 million** in notional foreign currency forward contracts designated as cash flow hedges and **$129.0 million** not designated as hedges[51](index=51&type=chunk)[52](index=52&type=chunk) Derivative Fair Values | Derivative Type | Balance Sheet Location | March 31, 2023 Fair Value (in thousands) | December 31, 2022 Fair Value (in thousands) | | :-------------- | :--------------------- | :--------------------------------------- | :------------------------------------------ | | Interest rate swaps (Asset) | Other assets (long-term) | $2,791 | $3,444 | | Foreign currency forward contracts (Assets) | Prepaid expenses and other assets / Other assets (long-term) | $4,401 | $4,783 | | Foreign currency forward contracts (Liabilities) | Accrued expenses / Other long-term obligations | $(3,459) | $(3,986) | [Note 10. Commitments and Contingencies](index=23&type=section&id=Note%2010.%20Commitments%20and%20Contingencies) This note discloses legal proceedings, including an ongoing U.S. SEC inquiry into the China subsidiary's business activities, with an uncertain material outcome - The company is involved in various legal proceedings, actions, and claims, including product liability, intellectual property, and contract disputes[57](index=57&type=chunk) - The U.S. SEC Division of Enforcement is conducting an inquiry into the business activities of the company's China subsidiary, specifically interactions with hospitals and healthcare officials[58](index=58&type=chunk) - The company is cooperating with the SEC inquiry but cannot predict its scope, timing, significance, or outcome, which could have a material adverse effect on its reputation, business, financial condition, or cash flows[58](index=58&type=chunk)[59](index=59&type=chunk)[141](index=141&type=chunk) [Note 11. Earnings Per Common Share (EPS)](index=23&type=section&id=Note%2011.%20Earnings%20Per%20Common%20Share%20%28EPS%29) This note provides the computation of basic and diluted EPS for Q1 2023 and 2022, showing a year-over-year increase in both metrics Earnings Per Common Share | Metric | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | YoY Change | | :-------------------------------- | :-------------------------------- | :-------------------------------- | :--------- | | Net income (in thousands) | $20,703 | $10,545 | +$10,158 | | Basic EPS | $0.36 | $0.19 | +$0.17 | | Diluted EPS | $0.36 | $0.18 | +$0.18 | | Weighted average shares outstanding (Basic, in thousands of shares) | 57,352 | 56,593 | +759 | | Weighted average shares outstanding (Diluted, in thousands of shares) | 58,183 | 57,531 | +652 | [Note 12. Stock-Based Compensation Expense](index=23&type=section&id=Note%2012.%20Stock-Based%20Compensation%20Expense) This note details stock-based compensation expense, which decreased to **$4.0 million** in Q1 2023, covering various equity awards and their unrecognized costs Stock-Based Compensation Expense by Category | Expense Category | Three Months Ended March 31, 2023 (in thousands) | Three Months Ended March 31, 2022 (in thousands) | YoY Change (in thousands) | | :--------------- | :----------------------------------------------- | :----------------------------------------------- | :------------------------ | | Cost of sales | $441 | $588 | -$147 | | Research and development | $428 | $486 | -$58 | | Selling, general and administrative | $3,100 | $3,568 | -$468 | | Total stock-based compensation expense | $3,969 | $4,642 | -$673 | - Total remaining unrecognized compensation cost for non-vested stock options was **$25.5 million**, expected to be recognized over a weighted average period of **2.6 years** as of March 31, 2023[65](index=65&type=chunk) - Total remaining unrecognized compensation cost for stock-settled performance stock units was **$15.9 million**, expected to be recognized over a weighted average period of **2.4 years** as of March 31, 2023[69](index=69&type=chunk) - Total remaining unrecognized compensation cost for cash-settled performance-based share-based awards (Liability Awards) was **$4.5 million**, expected to be recognized over a weighted average period of **2.3 years** as of March 31, 2023[71](index=71&type=chunk) [Note 13. Segment Reporting](index=27&type=section&id=Note%2013.%20Segment%20Reporting) This note reports financial information for the cardiovascular and endoscopy segments, both showing increased net sales and operating income in Q1 2023 - The company operates in two segments: cardiovascular (peripheral intervention, cardiac intervention, custom procedural solutions, OEM) and endoscopy (gastroenterology and pulmonology devices)[73](index=73&type=chunk)[95](index=95&type=chunk) Segment Net Sales and Income from Operations | Segment | Three Months Ended March 31, 2023 (in thousands) | Three Months Ended March 31, 2022 (in thousands) | YoY Change (in thousands) | YoY Growth | | :------ | :----------------------------------------------- | :----------------------------------------------- | :------------------------ | :--------- | | **Net Sales** | | | | | | Cardiovascular | $287,976 | $266,936 | +$21,040 | +7.9% | | Endoscopy | $9,589 | $8,479 | +$1,110 | +13.1% | | **Income from Operations** | | | | | | Cardiovascular | $23,934 | $13,126 | +$10,808 | +82.3% | | Endoscopy | $2,449 | $2,107 | +$342 | +16.2% | [Note 14. Fair Value Measurements](index=29&type=section&id=Note%2014.%20Fair%20Value%20Measurements) This note details fair value measurements for financial assets and liabilities, including contingent consideration which decreased from **$18.1 million** to **$16.0 million** - Marketable securities are valued using Level 1 inputs (active market prices)[77](index=77&type=chunk) - Interest rate and foreign currency contracts are valued using Level 2 inputs[80](index=80&type=chunk) - Contingent consideration liabilities are re-measured at fair value each reporting period using Level 3 unobservable inputs (discount rates, projected payments, probability of milestone achievement)[79](index=79&type=chunk)[81](index=81&type=chunk)[82](index=82&type=chunk) Fair Value Items | Fair Value Item | March 31, 2023 (in thousands) | December 31, 2022 (in thousands) | Change (in thousands) | | :-------------- | :---------------------------- | :------------------------------- | :-------------------- | | Marketable securities | $103 | $138 | -$35 | | Interest rate contract asset | $2,791 | $3,444 | -$653 | | Foreign currency contract assets | $4,401 | $4,783 | -$382 | | Foreign currency contract liabilities | $(3,459) | $(3,986) | +$527 | | Contingent consideration liabilities | $(16,000) | $(18,073) | +$2,073 | [Note 15. Accumulated Other Comprehensive Income (Loss)](index=36&type=section&id=Note%2015.%20Accumulated%20Other%20Comprehensive%20Income%20%28Loss%29) This note presents changes in accumulated other comprehensive income (loss) components, which decreased from **$(11.55) million** to **$(10.93) million** in Q1 2023 Accumulated Other Comprehensive Income (Loss) Components | Component | Balance as of March 31, 2023 (in thousands) | Balance as of January 1, 2023 (in thousands) | Change (in thousands) | | :-------- | :------------------------------------------ | :------------------------------------------- | :-------------------- | | Cash Flow Hedges | $3,081 | $4,366 | -$1,285 | | Foreign Currency Translation | $(14,010) | $(15,916) | +$1,906 | | Total Accumulated Other Comprehensive Loss | $(10,929) | $(11,550) | +$621 | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=37&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial condition and results of operations for Q1 2023, covering performance, liquidity, and accounting policies [Overview](index=37&type=section&id=OVERVIEW) This overview summarizes Q1 2023 financial performance, highlighting an **8.0%** increase in net sales, improved gross profit margin, and significant net income growth - Net sales increased by **8.0%** to **$297.6 million** in Q1 2023, driven by stronger than anticipated demand in the U.S. and favorable international sales trends, particularly in the EMEA region[96](index=96&type=chunk)[98](index=98&type=chunk) - Gross profit as a percentage of sales increased to **46.5%** in Q1 2023 from **43.9%** in Q1 2022[97](index=97&type=chunk) - Net income for Q1 2023 was **$20.7 million** (**$0.36** per share), up from **$10.5 million** (**$0.18** per share) in Q1 2022[97](index=97&type=chunk) - The Foundations for Growth program helped offset inflationary cost pressures in certain raw materials, shipping, and freight expenses[98](index=98&type=chunk) [Results of Operations](index=39&type=section&id=RESULTS%20OF%20OPERATIONS) This section provides a detailed analysis of Q1 2023 financial performance, covering sales, gross profit, operating expenses, and net income [Sales](index=39&type=section&id=Sales) Net sales increased **8.0%** year-over-year to **$297.6 million**, driven by **7.9%** cardiovascular and **13.1%** endoscopy sales growth, with strong U.S. and EMEA performance Net Sales by Category | Category | Three Months Ended March 31, 2023 (in thousands) | Three Months Ended March 31, 2022 (in thousands) | YoY Change (in thousands) | YoY Growth | | :-------------------------- | :----------------------------------------------- | :----------------------------------------------- | :------------------------ | :--------- | | **Total Net Sales** | $297,565 | $275,415 | +$22,150 | +8.0% | | **Cardiovascular Sales** | $287,976 | $266,936 | +$21,040 | +7.9% | | Peripheral Intervention | $113,783 | $105,773 | +$8,010 | +7.6% | | Cardiac Intervention | $85,328 | $81,487 | +$3,841 | +4.7% | | Custom Procedural Solutions | $47,701 | $46,262 | +$1,439 | +3.1% | | OEM | $41,164 | $33,414 | +$7,750 | +23.2% | | **Endoscopy Sales** | $9,589 | $8,479 | +$1,110 | +13.1% | - U.S. sales increased by **12.0%** to **$171.4 million**, driven primarily by U.S. Direct and OEM businesses[104](index=104&type=chunk) - International sales increased by **3.1%** to **$126.2 million**, with EMEA operations growing **11.7%** and ROW operations growing **6.7%**, partially offset by a **4.9%** decrease in Asia Pacific[105](index=105&type=chunk) [Gross Profit](index=41&type=section&id=Gross%20Profit) Gross profit as a percentage of sales increased to **46.5%** in Q1 2023, driven by favorable product mix, operational efficiencies, and reduced costs Gross Profit as Percentage of Sales | Metric | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | Change (pp) | | :----- | :-------------------------------- | :-------------------------------- | :---------- | | Gross profit as % of sales | 46.5% | 43.9% | +2.6 | - Increase in gross profit percentage driven by favorable product mix, efficiencies gained in the Foundations for Growth program, lower freight and distribution costs, lower intangible asset amortization expense as a percentage of sales, and lower obsolescence expense as a percentage of sales[106](index=106&type=chunk) [Operating Expenses](index=41&type=section&id=Operating%20Expenses) SG&A increased **7.3%**, R&D rose **22.6%** due to regulatory costs, and contingent consideration expense decreased significantly in Q1 2023 Operating Expenses by Category | Expense Category | Three Months Ended March 31, 2023 (in thousands) | Three Months Ended March 31, 2022 (in thousands) | YoY Change (in thousands) | YoY Growth | % of Sales (2023) | % of Sales (2022) | | :--------------- | :----------------------------------------------- | :----------------------------------------------- | :------------------------ | :--------- | :---------------- | :---------------- | | SG&A | $90,144 | $84,015 | +$6,129 | +7.3% | 30.3% | 30.5% | | R&D | $21,314 | $17,387 | +$3,927 | +22.6% | 7.2% | 6.3% | | Impairment charges | $0 | $1,672 | -$1,672 | -100.0% | 0.0% | 0.6% | | Contingent consideration expense | $521 | $2,600 | -$2,079 | -80.0% | 0.2% | 0.9% | - Increase in SG&A primarily due to increased labor-related costs associated with headcount and severance, as well as increased travel and marketing costs[107](index=107&type=chunk) - Increase in R&D largely due to higher regulatory expenses incurred to comply with the E.U. Medical Device Regulation (MDR)[108](index=108&type=chunk) [Operating Income](index=43&type=section&id=Operating%20Income) Total operating income significantly increased by **73.2%** to **$26.4 million**, with both cardiovascular and endoscopy segments showing strong growth Operating Income by Segment | Segment | Three Months Ended March 31, 2023 (in thousands) | Three Months Ended March 31, 2022 (in thousands) | YoY Change (in thousands) | YoY Growth | | :------ | :----------------------------------------------- | :----------------------------------------------- | :------------------------ | :--------- | | Total Operating Income | $26,383 | $15,233 | +$11,150 | +73.2% | | Cardiovascular Operating Income | $23,934 | $13,126 | +$10,808 | +82.3% | | Endoscopy Operating Income | $2,449 | $2,107 | +$342 | +16.2% | - Cardiovascular operating income increase primarily a result of higher sales and higher gross margin, partially offset by higher SG&A and R&D expenses[111](index=111&type=chunk) - Endoscopy operating income increase primarily a result of increased sales and gross margin, offset partially by higher SG&A expenses[112](index=112&type=chunk) [Other Expense – Net](index=43&type=section&id=Other%20Expense%20%E2%80%93%20Net) Other expense decreased to **$0.9 million** in Q1 2023, primarily due to lower foreign currency losses, partially offset by higher interest expense Other Expense – Net | Metric | Three Months Ended March 31, 2023 (in thousands) | Three Months Ended March 31, 2022 (in thousands) | YoY Change (in thousands) | | :----- | :----------------------------------------------- | :----------------------------------------------- | :------------------------ | | Total other expense – net | $(883) | $(1,062) | +$179 | - Change in other expense primarily related to decreased expense from realized and unrealized foreign currency losses, partially offset by an increase in interest expense associated with rising interest rates[113](index=113&type=chunk) [Effective Tax Rate](index=43&type=section&id=Effective%20Tax%20Rate) The effective tax rate decreased to **18.8%** in Q1 2023, primarily due to increased benefits from discrete items, despite higher pre-tax income Effective Tax Rate | Metric | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | Change (pp) | | :----- | :-------------------------------- | :-------------------------------- | :---------- | | Effective tax rate | 18.8% | 25.6% | -6.8 | - Decrease in the effective income tax rate primarily due to increased benefit from discrete items such as contingent liabilities and deferred compensation[114](index=114&type=chunk) - Increase in the income tax expense primarily due to increased pre-tax book income[114](index=114&type=chunk) [Net Income](index=45&type=section&id=Net%20Income) Net income for Q1 2023 significantly increased to **$20.7 million**, driven by higher sales and gross margins, partially offset by increased operating expenses Net Income | Metric | Three Months Ended March 31, 2023 (in thousands) | Three Months Ended March 31, 2022 (in thousands) | YoY Change (in thousands) | YoY Growth | | :----- | :----------------------------------------------- | :----------------------------------------------- | :------------------------ | :--------- | | Net income | $20,703 | $10,545 | +$10,158 | +96.3% | - Increase in net income primarily the result of higher sales and higher gross margins as a percentage of sales, partially offset by higher SG&A and R&D expenses[116](index=116&type=chunk) [Liquidity and Capital Resources](index=45&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) Current assets exceeded liabilities by **$341.3 million** as of March 31, 2023, with increased operating cash flow and significant available borrowing capacity - Current assets exceeded current liabilities by **$341.3 million** as of March 31, 2023[117](index=117&type=chunk) - Cash, cash equivalents, and restricted cash totaled **$60.1 million** as of March 31, 2023, with **$32.2 million** held by the China subsidiary[98](index=98&type=chunk)[117](index=117&type=chunk) Cash Flow Activities | Cash Flow Activity | Three Months Ended March 31, 2023 (in thousands) | Three Months Ended March 31, 2022 (in thousands) | YoY Change (in thousands) | | :----------------- | :----------------------------------------------- | :----------------------------------------------- | :------------------------ | | Operating Activities | $14,545 | $12,010 | +$2,535 | | Investing Activities | $(14,856) | $(9,868) | -$4,988 | | Financing Activities | $(497) | $(14,240) | +$13,743 | - Capital expenditures for property and equipment were **$12.8 million** in Q1 2023, with an anticipated **$55-$60 million** for the full year 2023[118](index=118&type=chunk) - Cash outflows for acquisitions in Q1 2023 were **$2.0 million** related to the investment in Solo Pace Inc[119](index=119&type=chunk) - Contingent consideration payments decreased significantly to **$2.6 million** in Q1 2023 from **$24.5 million** in Q1 2022[122](index=122&type=chunk) - The company has approximately **$521 million** in additional available borrowing capacity under its Third Amended Credit Agreement[98](index=98&type=chunk)[123](index=123&type=chunk) [Critical Accounting Policies and Estimates](index=47&type=section&id=CRITICAL%20ACCOUNTING%20POLICIES%20AND%20ESTIMATES) This section confirms no changes to critical accounting policies and estimates were made during Q1 2023 - No changes to critical accounting policies and estimates were made in Q1 2023[125](index=125&type=chunk) [Cautionary Notice Regarding Forward-Looking Statements](index=47&type=section&id=CAUTIONARY%20NOTICE%20REGARDING%20FORWARD-LOOKING%20STATEMENTS) This section warns that forward-looking statements are subject to risks and uncertainties, and actual results may differ materially, with no obligation to update - The report includes forward-looking statements, which are subject to inherent risks and uncertainties, and actual results may differ materially from those projected or assumed[126](index=126&type=chunk) - The company assumes no obligation to update any forward-looking statement[127](index=127&type=chunk) [Notice Regarding Trademarks](index=49&type=section&id=NOTICE%20REGARDING%20TRADEMARKS) This section clarifies that the report includes trademarks and tradenames, and the omission of symbols does not waive proprietary rights - The report includes trademarks, tradenames, and service marks that are the company's property or the property of others, and the absence of symbols does not waive the company's or any applicable licensor's rights to these marks[129](index=129&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=49&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section refers to the 2022 Form 10-K for market risk disclosures, noting no material changes in Q1 2023 - No material changes to quantitative and qualitative disclosures about market risk were reported in Q1 2023 compared to the 2022 Annual Report on Form 10-K[130](index=130&type=chunk) [Item 4. Controls and Procedures](index=49&type=section&id=Item%204.%20Controls%20and%20Procedures) This section details the evaluation of disclosure controls and procedures and reports on changes in internal control over financial reporting [Evaluation of Disclosure Controls and Procedures](index=49&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that disclosure controls and procedures were effective as of March 31, 2023 - Management, with CEO and CFO participation, concluded that disclosure controls and procedures were effective as of March 31, 2023, providing reasonable assurance that required information is recorded, processed, summarized, and reported timely[131](index=131&type=chunk) [Changes in Internal Control Over Financial Reporting](index=49&type=section&id=Changes%20in%20Internal%20Control%20Over%20Financial%20Reporting) This section reports no material changes in internal control over financial reporting during Q1 2023 - No material changes in internal control over financial reporting occurred during Q1 2023[132](index=132&type=chunk) [PART II. OTHER INFORMATION](index=49&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section provides additional information including legal proceedings, risk factors, and exhibits [Item 1. Legal Proceedings](index=49&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to Note 10 "Commitments and Contingencies" for detailed information regarding legal proceedings - Legal proceedings information is detailed in Note 10 "Commitments and Contingencies" of the financial statements[134](index=134&type=chunk) [Item 1A. Risk Factors](index=49&type=section&id=Item%201A.%20Risk%20Factors) This section updates risk factors, highlighting international operations and anti-bribery compliance risks, including an ongoing SEC inquiry into the China subsidiary - The company's international operations expose it to the U.S. Foreign Corrupt Practices Act (FCPA) and similar anti-bribery laws, with potential for civil and criminal penalties for non-compliance[138](index=138&type=chunk)[139](index=139&type=chunk)[140](index=140&type=chunk) - The ongoing SEC inquiry into the China subsidiary's business activities (interactions with hospitals and healthcare officials) could materially and adversely affect the company's reputation, business, results of operations, financial condition, or cash flows[141](index=141&type=chunk) [Item 6. Exhibits](index=52&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the 10-Q report, including corporate governance documents, compensation agreements, and certifications - Exhibits include corporate governance documents (Articles of Incorporation, Bylaws), executive compensation agreements (Performance Stock Unit Award Agreements), Sarbanes-Oxley certifications (CEO, CFO), and financial data in iXBRL format[143](index=143&type=chunk) [SIGNATURES](index=53&type=section&id=SIGNATURES) This section contains the official signatures of the company's principal executive and financial officers [Signatures Details](index=53&type=section&id=SIGNATURES_details) The report was signed on April 28, 2023, by the President and CEO, and the CFO and Treasurer of Merit Medical Systems, Inc - The report was signed by Fred P. Lampropoulos (President and CEO) and Raul Parra (CFO and Treasurer) on April 28, 2023[149](index=149&type=chunk)

Merit Medical Systems, Inc. (NASDAQ:MMSI) Q1 2023 Earnings Call Transcript April 26, 2023 5:00 PM ET Company Participants Fred Lampropoulos - Chairman and Chief Executive Officer Raul Parra - Chief Financial Officer Brian Lloyd - Chief Legal Officer and Corporate Secretary Conference Call Participants Steve Lichtman - Oppenheimer Jayson Bedford - Raymond James Mike Matson - Needham & Company Jim Sidoti - Sidoti & Company Jason Bednar - Piper Sandler Michael Petusky - Barrington Research William Plovanic - C ...

Merit Medical Investor Call April 26, 2023 an 2 TRADEMARKS 3 m In thousands, except percentages 5 5 6 6 7 • constant currency revenue; • constant currency revenue, organic; • non-GAAP gross profit and margin; • non-GAAP operating income and margin; • non-GAAP net income; • non-GAAP earnings per share; and • free cash flow. Readers should consider non-GAAP measures used in this presentation in addition to, not as a substitute for, financial reporting measures prepared in accordance with GAAP. These non-GAAP ...

Business Segments - The company operates through two segments: cardiovascular and endoscopy, with a focus on medical devices for vascular access and minimally invasive procedures [25]. - Cardiovascular segment includes product categories such as peripheral intervention, cardiac intervention, custom procedural solutions, and OEM [27]. - The endoscopy segment includes gastroenterology and pulmonary products, with a variety of kits and accessories for procedures [46]. Sales and Market Performance - U.S. sales accounted for 57% of net sales for the years ended December 31, 2022, 2021, and 2020 [55]. - In 2022, international sales grew by 7.4% compared to 2021, accounting for 43% of net sales, with China representing 13% of net sales at $149.3 million [56]. - The company achieved the highest annual revenue in its history in 2022, following growth in global sales as demand for products increased post-COVID-19 [58]. Product Development and Innovation - The company emphasizes rapid product development to meet customer needs, involving cross-departmental project teams for new product introductions [54]. - New product additions in 2022 included Prelude Roadster®, Sync EZ™, Safeguard Focus Cool™, and Scout BX™ [66]. - The company operates research and development facilities in California, Texas, Utah, Ireland, France, and Singapore, emphasizing innovation for continued growth [67]. Regulatory Compliance and Quality Standards - The company maintains a Corporate Integrity Agreement with the Office of Inspector General, requiring compliance with federal healthcare regulations [82]. - The company has received various ISO certifications for its facilities, ensuring adherence to international quality standards [68]. - Compliance with quality system regulations (QSR) is critical, as failure could lead to manufacturing shutdowns or product recalls, significantly impacting business operations [89]. Competition and Market Challenges - The company faces competition from larger firms such as Medtronic and Boston Scientific, but believes it holds a leading position in digital inflation technology [75]. - The company operates in a highly competitive market, facing competition from larger firms with greater resources [158]. - Consolidation in the healthcare industry has led to demands for price concessions, negatively impacting revenues [157]. Financial and Operational Risks - Elevated commodity and supply chain costs were experienced in 2022, with expectations for continued inflation in 2023 [149]. - The company faces challenges in passing increased costs onto customers due to the competitive nature of the healthcare industry [150]. - The company incurred substantial costs related to acquisitions and may face challenges in integrating acquired businesses, which could adversely affect financial results [166]. Legal and Regulatory Scrutiny - The company anticipates continued scrutiny from government authorities, which may increase compliance costs and expose it to litigation risks [188]. - The company is subject to various laws targeting fraud and abuse in the healthcare industry, with violations potentially leading to substantial fines and exclusion from healthcare programs [189]. - The company paid $18.7 million to resolve a DOJ investigation into past marketing practices, which included interest and fees, and is now operating under a Corporate Integrity Agreement (CIA) [187]. Data Privacy and Security - Privacy and data security compliance is increasingly complex, with potential fines for violations of laws such as GDPR and PIPL impacting operational costs [108]. - The company faces stringent privacy regimes, including GDPR in the EU, which imposes severe penalties for non-compliance and requires prompt notification of data breaches [109]. - Cyber-attacks could lead to unauthorized access to sensitive information, resulting in regulatory sanctions and damage to the company's reputation [222]. Employee and Talent Management - As of December 31, 2022, the company had 6,846 employees across approximately 40 countries, emphasizing the importance of attracting and retaining talent in the competitive medical device industry [126]. - The company achieved its eighth consecutive year of zero healthcare plan cost increases for U.S. employees participating in group healthcare plans, reflecting its focus on competitive health and wellness benefits [131]. - The company hired its first Director of Global Talent Management in 2021 to enhance global talent management programs, with a performance management program set to launch in 2023 [132]. Sustainability and Corporate Responsibility - The company has established a Corporate Sustainability Council to drive long-term Environment, Social, and Governance (ESG) goals across its enterprise [121]. - The company has identified sustainability opportunities, including programs to reduce waste and greenhouse gas emissions, as part of its business strategy [123]. - In 2022, the company supported humanitarian missions through product donations in five countries, including Haiti and Kenya [133].

Merit Medical Systems, Inc. (NASDAQ:MMSI) Q4 2022 Earnings Conference Call February 22, 2023 5:00 PM ET Company Participants Fred Lampropoulos - Founder, Chairman & Chief Executive Officer Brian Lloyd - Chief Legal Officer & Corporate Secretary Raul Parra - Chief Financial Officer & Treasurer Conference Call Participants Steve Lichtman - Oppenheimer Jayson Bedford - Raymond James Mike Matson - Needham & Company Jim Sidoti - Sidoti & Company Lawrence Biegelsen - Wells Fargo Michael Petusky - Barrington Resea ...

Merit Medical Investor Call February 22, 2023 Fred Lampropoulos Chairman and CEO Raul Parra CFO m CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS This presentation and any accompanying management commentary include "forward-looking statements," as defined within applicable securities laws and regulations. All statements in this presentation, other than statements of historical fact, are "forward-looking statements", including, without limitation, statements regarding Merit's forecasted plans, net ...

Merit Medical Systems, Inc. (NASDAQ:MMSI) Q3 2022 Earnings Conference Call October 26, 2022 5:00 PM ET Company Participants Fred Lampropoulos - President & CEO Brian Lloyd - Chief Legal Officer & Corporate Secretary Raul Parra - CFO Conference Call Participants Jayson Bedford - Raymond James Larry Biegelsen - Wells Fargo Mike Matson - Needham & Company William Plovanic - Canaccord Genuity Jason Bednar - Piper Sandler Jim Sidoti - Sidoti & Company Michael Petuski - Barrington Research Operator Good day and t ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to . Commission File Number 0-18592 MERIT MEDICAL SYSTEMS, INC. (Exact name of registrant as specified in its charter) Utah 87-0447695 (State or other j ...

Call Start: 17:00 January 1, 0000 6:00 PM ET Merit Medical Systems, Inc. (NASDAQ:MMSI) Q2 2022 Earnings Conference Call July 27, 2022 17:00 ET Company Participants Fred Lampropoulos - President & Chief Executive Officer Brian Lloyd - Chief Legal Officer & Corporate Secretary Raul Parra - Chief Financial Officer Conference Call Participants Jayson Bedford - Raymond James Larry Biegelsen - Wells Fargo Steve Lichtman - Oppenheimer & Company Jim Sidoti - Sidoti & Company Mike Matson - Needham & Company William ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to . Commission File Number 0-18592 MERIT MEDICAL SYSTEMS, INC. (Exact name of registrant as specified in its charter) Utah 87-0447695 (State or other ...