Merit Medical (MMSI) came out with quarterly earnings of $0.86 per share, beating the Zacks Consensus Estimate of $0.75 per share. This compares to earnings of $0.77 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 14.67%. A quarter ago, it was expected that this maker of disposable medical devices would post earnings of $0.83 per share when it actually produced earnings of $0.93, delivering a surprise of 12.05%.Over the last f ...

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) The unaudited consolidated financial statements for Q1 2025 and 2024 show overall growth in sales, income, assets, and equity [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) Consolidated Balance Sheet Summary (in thousands) | Metric | March 31, 2025 | December 31, 2024 | Change | | :-------------------------- | :------------- | :---------------- | :------- | | Total assets | $2,467,973 | $2,418,603 | +$49,370 | | Total liabilities | $1,039,550 | $1,039,244 | +$306 | | Total stockholders' equity | $1,428,423 | $1,379,359 | +$49,064 | Current Assets (in thousands) | Metric | March 31, 2025 | December 31, 2024 | Change | | :-------------------------- | :------------- | :---------------- | :------- | | Cash and cash equivalents | $395,529 | $376,715 | +$18,814 | | Trade receivables — net | $199,550 | $190,243 | +$9,307 | | Inventories | $317,936 | $306,063 | +$11,873 | | Total current assets | $958,635 | $923,774 | +$34,861 | Current Liabilities (in thousands) | Metric | March 31, 2025 | December 31, 2024 | Change | | :-------------------------- | :------------- | :---------------- | :------- | | Total current liabilities | $196,823 | $216,402 | -$19,579 | [Consolidated Statements of Income](index=6&type=section&id=Consolidated%20Statements%20of%20Income) Consolidated Statements of Income (Three Months Ended March 31, in thousands, except per share amounts) | Metric | 2025 | 2024 | Change | YoY Growth | | :-------------------------- | :--- | :--- | :------- | :--------- | | Net sales | $355,351 | $323,508 | +$31,843 | 9.8% | | Cost of sales | $183,331 | $171,793 | +$11,538 | 6.7% | | Gross profit | $172,020 | $151,715 | +$20,305 | 13.4% | | Income from operations | $41,033 | $35,922 | +$5,111 | 14.2% | | Net income | $30,147 | $28,240 | +$1,907 | 6.7% | | Basic EPS | $0.51 | $0.49 | +$0.02 | 4.1% | | Diluted EPS | $0.49 | $0.48 | +$0.01 | 2.1% | [Consolidated Statements of Comprehensive Income](index=7&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) Consolidated Statements of Comprehensive Income (Three Months Ended March 31, in thousands) | Metric | 2025 | 2024 | Change | | :-------------------------------- | :--- | :--- | :------- | | Net income | $30,147 | $28,240 | +$1,907 | | Foreign currency translation adjustment | $5,854 | $(3,404) | +$9,258 | | Total other comprehensive income (loss) | $4,025 | $(1,122) | +$5,147 | | Total comprehensive income | $34,172 | $27,118 | +$7,054 | [Consolidated Statements of Stockholders' Equity](index=8&type=section&id=Consolidated%20Statements%20of%20Stockholders'%20Equity) Stockholders' Equity Changes (Three Months Ended March 31, 2025, in thousands) | Metric | Amount | | :-------------------------------- | :------- | | Balance — January 1, 2025 | $1,379,359 | | Net income | $30,147 | | Other comprehensive income | $4,025 | | Stock-based compensation expense | $7,885 | | Options exercised | $14,610 | | Shares surrendered for payroll tax liabilities | $(6,145) | | Balance — March 31, 2025 | $1,428,423 | [Consolidated Statements of Cash Flows](index=9&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Cash Flow Summary (Three Months Ended March 31, in thousands) | Metric | 2025 | 2024 | Change | | :---------------------------------------------------- | :--- | :--- | :------- | | Net cash provided by operating activities | $40,572 | $36,216 | +$4,356 | | Net cash used in investing activities | $(29,635) | $(22,051) | $(7,584) | | Net cash provided by (used in) financing activities | $6,955 | $(18,003) | +$24,958 | | Net increase (decrease) in cash, cash equivalents and restricted cash | $18,828 | $(5,157) | +$23,985 | Key Operating Cash Flow Adjustments (Three Months Ended March 31, in thousands) | Adjustment | 2025 | 2024 | | :------------------------------------------ | :--- | :--- | | Depreciation and amortization | $29,292 | $23,599 | | Stock-based compensation expense | $9,078 | $5,234 | | Changes in inventories | $(10,599) | $(382) | | Changes in trade payables | $4,453 | $(14,148) | | Changes in accrued expenses | $(20,747) | $(8,891) | Key Investing Cash Flow Items (Three Months Ended March 31, in thousands) | Item | 2025 | 2024 | | :------------------------------------------ | :--- | :--- | | Capital expenditures for property and equipment | $(21,061) | $(11,682) | | Cash paid for notes receivable and other investments | $(7,117) | $(6,508) | | Cash paid in acquisitions, net of cash acquired | $(1,000) | $(3,000) | Key Financing Cash Flow Items (Three Months Ended March 31, in thousands) | Item | 2025 | 2024 | | :------------------------------------------ | :--- | :--- | | Proceeds from issuance of common stock | $13,152 | $7,730 | | Payments on long-term debt | $0 | $(24,063) | | Payment of taxes related to common stock exchange | $(6,145) | $(1,592) | [Condensed Notes to Consolidated Financial Statements](index=11&type=section&id=Condensed%20Notes%20to%20Consolidated%20Financial%20Statements) [Note 1. Basis of Presentation and Other Items](index=11&type=section&id=Note%201.%20Basis%20of%20Presentation%20and%20Other%20Items) - Interim financial statements are unaudited and prepared with normal recurring accruals, not including all annual disclosures[18](index=18&type=chunk) - A change in cash flow statement presentation reclassified investments in privately held companies from 'Cash paid in acquisitions' to 'Cash paid for notes receivable and other investments'[19](index=19&type=chunk) [Note 2. Recently Issued Accounting Standards](index=11&type=section&id=Note%202.%20Recently%20Issued%20Accounting%20Standards) - ASU 2023-09 (Income Taxes) is effective for fiscal years beginning after December 15, 2024; the company is evaluating its impact[20](index=20&type=chunk) - ASU 2024-03 (Disaggregation of Income Statement Expenses) is effective for fiscal years beginning after December 15, 2026, and is anticipated to have a **significant impact** on financial statement disclosures[21](index=21&type=chunk) [Note 3. Revenue from Contracts with Customers](index=11&type=section&id=Note%203.%20Revenue%20from%20Contracts%20with%20Customers) - Revenue is recognized when a customer obtains control of promised goods, consistent with prior disclosures[22](index=22&type=chunk) Revenue by Segment and Product Category (Three Months Ended March 31, in thousands) | Segment/Category | 2025 | 2024 | Change | YoY Growth | | :-------------------------- | :--- | :--- | :------- | :--------- | | **Cardiovascular** | | | | | | Peripheral Intervention | $137,279 | $130,066 | +$7,213 | 5.5% | | Cardiac Intervention | $99,741 | $90,176 | +$9,565 | 10.6% | | Custom Procedural Solutions | $47,942 | $48,523 | $(581) | (1.2)% | | OEM | $53,751 | $44,609 | +$9,142 | 20.5% | | *Total Cardiovascular* | *$338,713* | *$313,374* | *+$25,339* | *8.1%* | | **Endoscopy** | | | | | | Endoscopy Devices | $16,638 | $10,134 | +$6,504 | 64.2% | | *Total Endoscopy* | *$16,638* | *$10,134* | *+$6,504* | *64.2%* | | **Grand Total** | **$355,351** | **$323,508** | **+$31,843** | **9.8%** | Revenue by Geographic Region (Three Months Ended March 31, in thousands) | Region | 2025 | 2024 | Change | YoY Growth | | :-------------------------- | :--- | :--- | :------- | :--------- | | United States | $213,564 | $186,094 | +$27,470 | 14.8% | | International | $141,787 | $137,414 | +$4,373 | 3.2% | | **Total** | **$355,351** | **$323,508** | **+$31,843** | **9.8%** | - Effective January 1, 2025, spine device sales (approximately **$5.3 million in 2024**) were realigned to the OEM product category for comparability[24](index=24&type=chunk) [Note 4. Acquisitions and Investments](index=13&type=section&id=Note%204.%20Acquisitions%20and%20Investments) - On November 1, 2024, acquired Cook's lead management business for **$210 million**; generated **$9.2 million** in sales for Q1 2025 within the Cardiovascular segment[26](index=26&type=chunk) - On July 1, 2024, acquired EsophyX® Z+ device and related assets from EndoGastric Solutions (EGS) for **$105 million**; generated **$6.6 million** in sales for Q1 2025 within the Endoscopy segment[29](index=29&type=chunk) - On March 8, 2024, acquired assets associated with Bioptome, Novatome, and Sensatome devices from Scholten Surgical Instruments, Inc (SSI) for an upfront payment of **$3 million** and three deferred payments of **$1 million** each[30](index=30&type=chunk) [Note 5. Inventories](index=15&type=section&id=Note%205.%20Inventories) Inventories (in thousands) | Category | March 31, 2025 | December 31, 2024 | Change | | :--------------- | :------------- | :---------------- | :------- | | Finished goods | $163,368 | $168,437 | $(5,069) | | Work-in-process | $36,162 | $27,114 | +$9,048 | | Raw materials | $118,406 | $110,512 | +$7,894 | | **Total inventories** | **$317,936** | **$306,063** | **+$11,873** | [Note 6. Goodwill and Intangible Assets](index=15&type=section&id=Note%206.%20Goodwill%20and%20Intangible%20Assets) - Goodwill balance at March 31, 2025, was **$464.36 million**, with a slight increase of **$0.849 million** due to foreign exchange effects in Q1 2025[31](index=31&type=chunk) - **No goodwill impairments** were recorded for the three-month periods ended March 31, 2025, or 2024[31](index=31&type=chunk) Other Intangible Assets (Net Carrying Amount, in thousands) | Category | March 31, 2025 | December 31, 2024 | Change | | :---------------- | :------------- | :---------------- | :------- | | Patents | $18,885 | $18,665 | +$220 | | Trademarks | $22,457 | $23,436 | $(979) | | Customer lists | $20,799 | $21,710 | $(911) | | **Total Other Intangibles** | **$64,628** | **$66,499** | **$(1,871)** | - Aggregate amortization expense for developed technology and other intangible assets **increased by 37.0%** year-over-year, from **$14.6 million** in Q1 2024 to **$20.0 million** in Q1 2025[32](index=32&type=chunk) Estimated Amortization Expense for Intangible Assets (in thousands) | Year ending December 31, | Estimated Amortization Expense | | :----------------------- | :----------------------------- | | Remaining 2025 | $62,428 | | 2026 | $72,797 | | 2027 | $69,127 | | 2028 | $67,728 | | 2029 | $56,158 | [Note 7. Income Taxes](index=17&type=section&id=Note%207.%20Income%20Taxes) Income Tax Expense and Effective Tax Rate (Three Months Ended March 31, in thousands) | Metric | 2025 | 2024 | Change | | :---------------- | :--- | :--- | :------- | | Income tax expense | $7,811 | $6,108 | +$1,703 | | Effective tax rate | 20.6% | 17.8% | +2.8 percentage points | - The increase in the effective tax rate was primarily due to **decreased benefit from discrete items** (e.g., deferred compensation) and increased impact of foreign income inclusions[34](index=34&type=chunk) - The company is monitoring OECD Pillar Two global minimum tax rules, which could increase future effective income tax rates and cash income tax payments, but **no material impact is anticipated for fiscal 2025**[35](index=35&type=chunk) [Note 8. Debt](index=17&type=section&id=Note%208.%20Debt) Long-term Debt (in thousands) | Metric | March 31, 2025 | December 31, 2024 | | :-------------------------- | :------------- | :---------------- | | Convertible notes | $747,500 | $747,500 | | Less unamortized debt issuance costs | $(16,827) | $(17,949) | | **Total long-term debt** | **$730,673** | **$729,551** | - Future minimum principal payments on long-term debt total **$747.5 million**, all due in 2029[36](index=36&type=chunk) - The Fourth Amended and Restated Credit Agreement provides a **$150 million** term loan and a **$700 million** revolving credit commitment, maturing June 6, 2028[37](index=37&type=chunk) - As of March 31, 2025, the company had **no outstanding borrowings** under the credit agreement and approximately **$697 million** in additional available borrowings, while remaining in compliance with all financial covenants[41](index=41&type=chunk)[42](index=42&type=chunk) - Convertible Notes, issued in December 2023, bear **3.00% interest** annually and mature on February 1, 2029, with an initial conversion price of approximately **$86.83 per share**[43](index=43&type=chunk)[44](index=44&type=chunk) - Capped Call Transactions were entered into in December 2023 at a cost of **$66.5 million** to reduce potential dilution from the Convertible Notes, with a cap price of approximately **$114.68 per share**[49](index=49&type=chunk)[50](index=50&type=chunk) [Note 9. Derivatives](index=23&type=section&id=Note%209.%20Derivatives) - The company uses interest rate swaps and foreign currency forward contracts to mitigate risks from interest rate and foreign currency exchange rate fluctuations[52](index=52&type=chunk) - Foreign currency forward contracts designated as cash flow hedges had aggregate notional amounts of **$179.9 million** as of March 31, 2025, and **$117.5 million** as of December 31, 2024[56](index=56&type=chunk) - Foreign currency forward contracts not designated as hedging instruments had aggregate notional amounts of **$100.6 million** as of March 31, 2025, and **$95.7 million** as of December 31, 2024[57](index=57&type=chunk) Fair Value of Derivative Instruments (in thousands) | Type | Balance Sheet Location | March 31, 2025 | December 31, 2024 | | :-------------------------------- | :-------------------------- | :------------- | :---------------- | | **Designated as Hedging Instruments** | | | | | Assets (Fwd Contracts) | Prepaid expenses & other assets | $2,120 | $3,771 | | Assets (Fwd Contracts) | Other assets (long-term) | $526 | $1,064 | | Liabilities (Fwd Contracts) | Accrued expenses | $(1,533) | $(1,332) | | Liabilities (Fwd Contracts) | Other long-term obligations | $(427) | $(287) | | **Not Designated as Hedging Instruments** | | | | | Assets (Fwd Contracts) | Prepaid expenses & other assets | $1,839 | $2,595 | | Liabilities (Fwd Contracts) | Accrued expenses | $(877) | $(1,288) | - A gain of **$(158) thousand** from non-designated foreign currency forward contracts was recognized in Q1 2025, compared to a loss of **$883 thousand** in Q1 2024[61](index=61&type=chunk) [Note 10. Commitments and Contingencies](index=26&type=section&id=Note%2010.%20Commitments%20and%20Contingencies) - The company is involved in various claims and litigation matters in the ordinary course of business[62](index=62&type=chunk) - An **SEC Inquiry**, commenced in January 2022, is ongoing regarding business activities of Merit's subsidiary in China; the company is cooperating but cannot predict the outcome or estimate a reasonably possible loss[63](index=63&type=chunk) [Note 11. Earnings Per Common Share (EPS)](index=27&type=section&id=Note%2011.%20Earnings%20Per%20Common%20Share%20(EPS)) Earnings Per Common Share (Three Months Ended March 31, in thousands, except per share amounts) | Metric | 2025 | 2024 | | :-------------------------- | :--- | :--- | | Net income | $30,147 | $28,240 | | Basic EPS | $0.51 | $0.49 | | Diluted EPS | $0.49 | $0.48 | | Weighted average shares outstanding (Basic) | 58,897 | 57,958 | | Total potential shares outstanding (Diluted) | 61,278 | 58,567 | - Convertible notes had a **dilutive effect in Q1 2025** (1,363 thousand shares) because the average common stock price exceeded the conversion price of $86.83[65](index=65&type=chunk)[66](index=66&type=chunk) [Note 12. Stock-Based Compensation Expense](index=28&type=section&id=Note%2012.%20Stock-Based%20Compensation%20Expense) Total Stock-Based Compensation Expense (Before Taxes, in thousands) | Metric | 2025 | 2024 | Change | YoY Growth | | :-------------------------------- | :----- | :----- | :------- | :--------- | | Total stock-based compensation expense | $9,078 | $5,234 | +$3,844 | 73.4% | Stock-Based Compensation Expense Breakdown (Three Months Ended March 31, in thousands) | Category | 2025 | 2024 | | :-------------------------------- | :----- | :----- | | Nonqualified stock options | $1,955 | $2,480 | | Performance-based restricted stock units | $3,581 | $1,867 | | Restricted stock units | $2,330 | $587 | | Cash-settled performance-based awards | $1,193 | $300 | - Total remaining unrecognized compensation cost for stock-settled Performance Stock Units was **$38.8 million**, expected to be recognized over a weighted average period of **1.8 years**[73](index=73&type=chunk) - Total remaining unrecognized compensation cost for cash-settled Liability Awards was **$7.1 million**, expected to be recognized over a weighted average period of **1.9 years**[77](index=77&type=chunk) [Note 13. Segment Reporting](index=31&type=section&id=Note%2013.%20Segment%20Reporting) - The company operates in two segments: **Cardiovascular** (Peripheral Intervention, Cardiac Intervention, Custom Procedural Solutions, OEM) and **Endoscopy** (Gastroenterology and Pulmonology devices)[80](index=80&type=chunk) Segment Financials (Three Months Ended March 31, in thousands) | Metric | Cardiovascular 2025 | Endoscopy 2025 | Consolidated 2025 | Cardiovascular 2024 | Endoscopy 2024 | Consolidated 2024 | | :-------------------------------- | :------------------ | :--------------- | :------------------ | :------------------ | :--------------- | :------------------ | | Net sales | $338,713 | $16,638 | $355,351 | $313,374 | $10,134 | $323,508 | | Cost of sales standard | $138,440 | $4,363 | | $133,066 | $3,109 | | | Selling, general and administrative expenses | $100,974 | $6,512 | | $91,300 | $3,128 | | | Research and development expenses | $21,954 | $524 | | $20,916 | $566 | | | Income from operations | $38,538 | $2,495 | $41,033 | $32,907 | $3,015 | $35,922 | Total Depreciation and Amortization by Operating Segment (Three Months Ended March 31, in thousands) | Segment | 2025 | 2024 | | :-------------- | :----- | :----- | | Cardiovascular | $26,970 | $23,388 | | Endoscopy | $2,322 | $211 | | **Total** | **$29,292** | **$23,599** | [Note 14. Fair Value Measurements](index=33&type=section&id=Note%2014.%20Fair%20Value%20Measurements) Assets (Liabilities) Measured at Fair Value (March 31, 2025, in thousands) | Item | Total Fair Value | Level 1 | Level 2 | Level 3 | | :-------------------------------- | :--------------- | :------ | :------ | :------ | | Money market funds | $30,330 | $30,330 | $— | $— | | Foreign currency contract assets | $4,485 | $— | $4,485 | $— | | Foreign currency contract liabilities | $(2,837) | $— | $(2,837) | $— | | Contingent consideration liabilities | $(4,429) | $— | $— | $(4,429) | - Contingent consideration liabilities increased from **$3.486 million** (Dec 31, 2024) to **$4.429 million** (March 31, 2025), with a **$1.023 million** expense recognized in Q1 2025[85](index=85&type=chunk) - Contingent consideration liabilities are measured using **Level 3 inputs**, including discount rates, projected payment years, and probability of milestone payments[87](index=87&type=chunk)[89](index=89&type=chunk) - The fair value of Convertible Notes was **$1,016.6 million** as of March 31, 2025, determined using **Level 2 valuation input**[91](index=91&type=chunk) [Note 15. Accumulated Other Comprehensive Income (Loss)](index=38&type=section&id=Note%2015.%20Accumulated%20Other%20Comprehensive%20Income%20(Loss)) Accumulated Other Comprehensive Income (Loss) (in thousands) | Component | Balance Jan 1, 2025 | Net OCI (Loss) | Balance Mar 31, 2025 | | :-------------------------- | :------------------ | :--------------- | :------------------- | | Cash Flow Hedges | $2,765 | $(1,823) | $942 | | Foreign Currency Translation | $(22,166) | $5,848 | $(16,318) | | **Total** | **$(19,401)** | **$4,025** | **$(15,376)** | - Foreign currency translation adjustment contributed **$5.854 million** in Q1 2025, a significant improvement compared to a **$(3.404) million** loss in Q1 2024[96](index=96&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=39&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 2025 financial performance, highlighting a 9.8% sales increase, improved margins, and the impact of recent acquisitions [Overview](index=39&type=section&id=Overview_MD%26A) - Merit Medical Systems, Inc is a leading manufacturer and marketer of proprietary medical devices for interventional, diagnostic, and therapeutic procedures across cardiology, radiology, oncology, critical care, and endoscopy[98](index=98&type=chunk) Key Financial Highlights (Three Months Ended March 31) | Metric | 2025 | 2024 | Change | YoY Growth | | :-------------------------- | :--- | :--- | :------- | :--------- | | Net sales | $355.4 million | $323.5 million | +$31.8 million | 9.8% | | Gross profit % of sales | 48.4% | 46.9% | +1.5 pp | | | Net income | $30.1 million | $28.2 million | +$1.9 million | 6.7% | | Diluted EPS | $0.49 | $0.48 | +$0.01 | 2.1% | - Foreign currency fluctuations (net of hedging) decreased net sales by **$(3.4) million** for Q1 2025[99](index=99&type=chunk) - Revenue growth in Q1 2025 was primarily driven by demand in the U.S. and favorable international sales trends, particularly in ROW and EMEA regions[101](index=101&type=chunk) - As of March 31, 2025, the company had **$397.6 million** in cash, cash equivalents, and restricted cash, with approximately **$697 million** in net available borrowing capacity[101](index=101&type=chunk) - Changes in U.S. trade policies, including increased tariffs (e.g., between U.S. and China), could lead to higher production costs and pricing, potentially negatively affecting business[101](index=101&type=chunk)[102](index=102&type=chunk) [Results of Operations](index=41&type=section&id=Results%20of%20Operations_MD%26A) [Sales](index=41&type=section&id=Sales_MD%26A) Sales by Product Category (Three Months Ended March 31, in thousands) | Category | 2025 | 2024 | % Change | | :-------------------------- | :--- | :--- | :------- | | **Cardiovascular** | | | | | Peripheral Intervention | $137,279 | $130,066 | 5.5% | | Cardiac Intervention | $99,741 | $90,176 | 10.6% | | Custom Procedural Solutions | $47,942 | $48,523 | (1.2)% | | OEM | $53,751 | $44,609 | 20.5% | | *Total Cardiovascular* | *$338,713* | *$313,374* | *8.1%* | | **Endoscopy** | | | | | Endoscopy Devices | $16,638 | $10,134 | 64.2% | | **Total Sales** | **$355,351** | **$323,508** | **9.8%** | - Cardiovascular sales **increased by 8.1%**, driven by Peripheral Intervention (access, embolotherapy, delivery systems), Cardiac Intervention (CRM/EP, fluid management), and OEM products (kits, access, intervention, angiography)[105](index=105&type=chunk) - Endoscopy sales **surged by 64.2%**, significantly boosted by **$6.6 million** in sales from the EsophyX® Z+ device acquisition[106](index=106&type=chunk) Sales by Geography (Three Months Ended March 31, in thousands) | Region | 2025 | 2024 | % Change | | :-------------------------- | :--- | :--- | :------- | | United States | $213,564 | $186,094 | 14.8% | | International | $141,787 | $137,414 | 3.2% | | **Total** | **$355,351** | **$323,508** | **9.8%** | - U.S. sales **increased by 14.8%**, driven by U.S. Direct, OEM, and Endoscopy businesses; International sales **increased by 3.2%**, with growth in ROW (17.7%) and EMEA (3.7%), partially offset by a decrease in APAC (0.5%)[107](index=107&type=chunk)[108](index=108&type=chunk) [Gross Profit](index=43&type=section&id=Gross%20Profit_MD%26A) - Gross profit as a percentage of sales **increased to 48.4%** in Q1 2025 from 46.9% in Q1 2024[109](index=109&type=chunk) - The increase in gross profit percentage was primarily due to **higher sales and favorable changes in product mix**, partially offset by higher intangible amortization expense as a percentage of sales associated with acquisitions[109](index=109&type=chunk) [Operating Expenses](index=43&type=section&id=Operating%20Expenses_MD%26A) Operating Expenses (Three Months Ended March 31, in thousands, and as % of sales) | Metric | 2025 | 2024 | Change | YoY Growth | % of Sales 2025 | % of Sales 2024 | | :-------------------------------- | :--- | :--- | :------- | :--------- | :-------------- | :-------------- | | Selling, general and administrative | $107,486 | $94,428 | +$13,058 | 13.8% | 30.2% | 29.2% | | Research and development | $22,478 | $21,482 | +$996 | 4.6% | 6.3% | 6.6% | | Contingent consideration expense (benefit) | $1,023 | $(117) | +$1,140 | N/A | 0.3% | (0.0)% | | **Total operating expenses** | **$130,987** | **$115,793** | **+$15,194** | **13.1%** | | | - Selling, general and administrative (SG&A) expenses **increased by 13.8%** due to higher labor-related costs (headcount additions from EGS and Cook acquisitions) and increased advertising and promotional expenses[110](index=110&type=chunk) - Research and development (R&D) expenses **increased by 4.6%** due to higher R&D activity, partially offset by a decrease in regulatory costs associated with clinical trials[111](index=111&type=chunk) - Contingent consideration shifted from a benefit of **$(0.1) million** in Q1 2024 to an expense of **$1.0 million** in Q1 2025, reflecting changes in estimated fair value of acquisition obligations[113](index=113&type=chunk) [Operating Income](index=45&type=section&id=Operating%20Income_MD%26A) Operating Income by Segment (Three Months Ended March 31, in thousands) | Segment | 2025 | 2024 | Change | | :---------------- | :--- | :--- | :------- | | Cardiovascular | $38,538 | $32,907 | +$5,631 | | Endoscopy | $2,495 | $3,015 | $(520) | | **Total operating income** | **$41,033** | **$35,922** | **+$5,111** | - Cardiovascular operating income increased due to **higher sales and gross margin**, partially offset by increased SG&A, R&D, and contingent consideration expenses[114](index=114&type=chunk) - Endoscopy operating income decreased despite higher sales, primarily due to a **lower gross margin** (increased amortization from EGS acquisition) and higher SG&A expenses (headcount for EGS integration)[115](index=115&type=chunk) [Other Expense – Net](index=45&type=section&id=Other%20Expense%20%E2%80%93%20Net_MD%26A) - Total other expense – net **increased to $3.1 million** in Q1 2025 from $1.6 million in Q1 2024[116](index=116&type=chunk) - This increase was primarily due to **decreased interest income** (associated with reduced cash and cash equivalent balances), partially offset by a decrease in interest expense (due to no outstanding term loan borrowings)[116](index=116&type=chunk) [Effective Tax Rate](index=45&type=section&id=Effective%20Tax%20Rate_MD%26A) - The effective tax rate **increased to 20.6%** in Q1 2025 from 17.8% in Q1 2024[117](index=117&type=chunk) - The increase was primarily due to **decreased benefit from discrete items** (e.g., deferred compensation) and the impact of increased foreign income inclusions[117](index=117&type=chunk) [Net Income](index=45&type=section&id=Net%20Income_MD%26A) - Net income **increased to $30.1 million** in Q1 2025 from $28.2 million in Q1 2024[118](index=118&type=chunk) - The increase was driven by **higher sales and gross margin**, partially offset by increased SG&A, R&D, contingent consideration expense, other expenses, and income tax expense[118](index=118&type=chunk) [Liquidity and Capital Resources](index=47&type=section&id=Liquidity%20and%20Capital%20Resources_MD%26A) - Current assets exceeded current liabilities by **$761.8 million** as of March 31, 2025[119](index=119&type=chunk) - Cash, cash equivalents, and restricted cash totaled **$397.6 million** as of March 31, 2025, with **$57.2 million** held by foreign subsidiaries[119](index=119&type=chunk) Cash Flows Summary (Three Months Ended March 31, in thousands) | Activity | 2025 | 2024 | | :------------------------------------------ | :--- | :--- | | Net cash provided by operating activities | $40,572 | $36,216 | | Net cash used in investing activities | $(29,635) | $(22,051) | | Net cash provided by (used in) financing activities | $6,955 | $(18,003) | - Capital expenditures for property and equipment **increased to $21.1 million** in Q1 2025 (from $11.7 million in Q1 2024), including costs for a new distribution facility[120](index=120&type=chunk) - Anticipated capital expenditures for 2025 are approximately **$90 to $100 million**[120](index=120&type=chunk) - Financing activities provided cash in Q1 2025, primarily due to **$13.2 million** from common stock issuance and **no payments on long-term debt**, contrasting with **$24.1 million** in debt repayments in Q1 2024[123](index=123&type=chunk) - The company had approximately **$697 million** in additional available borrowings under the Amended Fourth A&R Credit Agreement as of March 31, 2025[124](index=124&type=chunk) - Management believes existing cash, anticipated future cash flows from operations, and long-term debt agreements are **adequate to fund current and planned future operations** for the foreseeable future[125](index=125&type=chunk) [Critical Accounting Policies and Estimates](index=49&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates_MD%26A) - There were **no changes** to the application of critical accounting policies previously disclosed in the 2024 Annual Report on Form 10-K during the three-month period ended March 31, 2025[126](index=126&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=52&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) No material changes occurred in market risk disclosures during Q1 2025 compared to the 2024 Annual Report - **No material changes** in quantitative and qualitative disclosures about market risk (currency exchange rate risk and interest rate risk) in Q1 2025 compared to the 2024 Annual Report on Form 10-K[135](index=135&type=chunk) [Item 4. Controls and Procedures](index=52&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2025, with no material changes identified - Disclosure controls and procedures were evaluated and **deemed effective** at a reasonable assurance level as of March 31, 2025[136](index=136&type=chunk) - **No material changes** in internal control over financial reporting occurred during the three-month period ended March 31, 2025[137](index=137&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=54&type=section&id=Item%201.%20Legal%20Proceedings_Other) This section refers to Note 10 for details on legal proceedings, including the ongoing SEC Inquiry into the company's China subsidiary - Refer to Note 10, Commitments and Contingencies, for information on legal proceedings[139](index=139&type=chunk) [Item 1A. Risk Factors](index=54&type=section&id=Item%201A.%20Risk%20Factors) This section updates risk factors, emphasizing potential adverse impacts from global economic conditions and changes in trade policies - The global macroeconomic environment remains challenging due to **inflation, credit market instability, geopolitical conflicts**, and economic challenges in China[141](index=141&type=chunk) - Changes in U.S. trade policies, including **increased tariffs** on imports from countries like Mexico, Ireland, and China, could significantly increase manufacturing costs[142](index=142&type=chunk) - China imposed a **125% tariff** on goods imported from the U.S. on April 12, 2025, in response to U.S. tariffs, which could increase expenses on products sold in China[143](index=143&type=chunk) - Potential impacts of trade tensions include **increased manufacturing costs, supply chain disruptions**, limitations on product sales, and reductions in sales volumes and gross margins[143](index=143&type=chunk) - Disruptions and volatility in financial markets may lead to adverse changes in the **availability, terms, and cost of capital**, limiting funding for growth opportunities[145](index=145&type=chunk) [Item 5. Other information](index=56&type=section&id=Item%205.%20Other%20information) Two Board of Directors members adopted Rule 10b5-1 trading plans on February 28, 2025, for the sale of common stock - David K. Floyd adopted a Rule 10b5-1 Trading Plan on February 28, 2025, to sell up to **5,021 shares** of Common Stock[146](index=146&type=chunk) - Michael R. McDonnell adopted a Rule 10b5-1 Trading Plan on February 28, 2025, to sell up to **3,500 shares** of Common Stock[147](index=147&type=chunk) [Item 6. Exhibits](index=57&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including corporate governance documents and required certifications - The report includes various exhibits such as corporate governance documents (Articles of Incorporation, Bylaws), director trading plans (Rule 10b5-1), executive compensation agreements (Performance Stock Unit, Restricted Stock Unit Award Agreements), and Sarbanes-Oxley Act certifications[150](index=150&type=chunk) - Financial information for the quarter ended March 31, 2025, is formatted in **Inline Extensible Business Reporting Language (iXBRL)**[150](index=150&type=chunk) [SIGNATURES](index=59&type=section&id=SIGNATURES) - The report was signed by Fred P. Lampropoulos, Chief Executive Officer and President, and Raul Parra, Chief Financial Officer and Treasurer, on **April 24, 2025**[155](index=155&type=chunk)

Contacts: PR/Media Inquiries: Sarah Comstock Merit Medical +1-801-432-2864 +1-443-213-0509 Investor Inquiries: Mike Piccinino, CFA, IRC ICR Healthcare sarah.comstock@merit.com mike.piccinino@icrhealthcare.com FOR IMMEDIATE RELEASE MERIT MEDICAL REPORTS FIRST QUARTER 2025 RESULTS AND UPDATES FULL-YEAR GUIDANCE First Quarter Highlights† Exhibit 99.1 † Comparisons above are calculated for the current quarter compared with the first quarter of 2024, unless otherwise specified. Amounts stated in this release are ...

Core Insights - Merit Medical Systems, Inc. reported a revenue of $355.4 million for Q1 2025, reflecting a 9.8% increase compared to Q1 2024 [4][6] - The company achieved a constant currency revenue growth of 10.9% and an organic constant currency revenue increase of 6.0% year-over-year [4][6] - Non-GAAP earnings per share (EPS) rose by 14.8% to $0.86, while GAAP EPS increased by 2.0% to $0.49 [6][9] Financial Performance - The GAAP operating margin improved to 11.5% from 11.1% in the prior year, while the non-GAAP operating margin increased to 19.3% from 17.0% [6][8] - Free cash flow generation was reported at $19.5 million, down 20.5% compared to the previous year [6] - The company’s GAAP net income for Q1 2025 was $30.1 million, compared to $28.2 million in Q1 2024 [9] Revenue Breakdown - Revenue by segment showed significant growth in the Cardiovascular segment, with a 10.6% increase in Cardiac Intervention and a 20.5% increase in OEM [5] - The Endoscopy segment also saw substantial growth, with revenue increasing by 64.2% [7] - Total revenue for the Cardiovascular segment was $338.7 million, up 8.1% year-over-year [5] Guidance and Outlook - The company reaffirmed its total revenue guidance for 2025, projecting revenues between $1.470 billion and $1.490 billion, representing an 8% to 10% year-over-year increase [11] - Non-GAAP EPS guidance was updated to reflect stronger-than-expected Q1 results, now projected between $3.29 and $3.42 [11] - The company anticipates continued stable constant currency growth despite potential impacts from trade policies [5][11] Balance Sheet Highlights - As of March 31, 2025, Merit had cash and cash equivalents of $395.5 million, an increase from $376.7 million at the end of 2024 [10] - Total debt obligations remained stable at $747.5 million [10] - The company had an available borrowing capacity of approximately $697 million [10]

Core Viewpoint - Wall Street analysts anticipate a slight decline in Merit Medical's quarterly earnings per share, while revenues are expected to show growth compared to the previous year [1]. Earnings Estimates - Analysts expect Merit Medical (MMSI) to report earnings of $0.75 per share, reflecting a year-over-year decline of 2.6% [1]. - Revenue is projected to be $352.33 million, indicating an increase of 8.9% from the same quarter last year [1]. - The consensus EPS estimate has been revised down by 0.1% in the last 30 days, indicating a reassessment by covering analysts [1][2]. Revenue Projections - Revenue from 'Cardiovascular- Peripheral Intervention' is estimated to reach $141.95 million, a year-over-year increase of 5.4% [4]. - 'Cardiovascular- Cardiac Intervention' revenue is expected to be $98.79 million, reflecting an 8.9% increase year over year [4]. - 'Endoscopy' revenue is projected at $17.89 million, showing a significant year-over-year increase of 76.5% [5]. - 'Cardiovascular- OEM' revenue is expected to be $43.84 million, indicating an 11.6% increase from the previous year [5]. - Total 'Cardiovascular' revenue is projected to reach $334.45 million, reflecting a 6.7% year-over-year change [5]. Geographic Sales Estimates - 'Geographic Sales- United States' is estimated at $208.66 million, suggesting a year-over-year increase of 12.1% [6]. - 'Geographic Sales- International' is projected to be $143.33 million, indicating a 4.3% increase year over year [6]. Stock Performance - Over the past month, Merit Medical shares have decreased by 10.6%, compared to a 5.6% decline in the Zacks S&P 500 composite [7]. - Currently, MMSI holds a Zacks Rank 3 (Hold), suggesting its performance may align with the overall market in the near future [7].

Company Overview - Merit Medical Systems, Inc. (MMSI) has launched the Ventrax Delivery System, aimed at enhancing precision and control in pulmonary interventions, reflecting the company's commitment to improving procedural efficiency and outcomes in interventional medicine [1][2] Product Details - The Ventrax Delivery System expands MMSI's electrophysiology and cardiac rhythm management (CRM) portfolio, addressing the clinical demand for safer and more reliable pulmonary access technologies [2] - The system facilitates retrograde aortic access for catheter-based procedures, allowing precise placement of diagnostic, mapping, or treatment catheters into the left ventricle through the aorta, improving procedural accuracy [8][9] - Key features include a 95-cm sheath for navigating to critical target zones, a low-profile transition for smooth insertion, and an angled tip for enhanced reach, providing greater control during complex procedures [9] Market Context - The global cardiac rhythm management devices market was estimated at $17.17 billion in 2024, projected to grow at a CAGR of 6.4% from 2025 to 2030, driven by the rising prevalence of cardiovascular diseases and technological innovations [10][11] - The demand for advanced diagnostic tools like the Ventrax Delivery System is expected to rise as lung cancer screening and minimally invasive procedures gain traction [4] Financial Performance - MMSI currently has a market capitalization of $5.44 billion and has surpassed earnings estimates for the last four quarters, delivering an average surprise of 8.1% [5]

Merit Medical (MMSI) shares soared 8.3% in the last trading session to close at $95.79. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 10.1% loss over the past four weeks.The upside can be attributed to relief-rally across global markets following the announcement of a 90-day pause on tariff hike by the United States.This maker of disposable medical devices is expected to post quarterly earnings of $0.75 per share in its upcomin ...

Company Overview - Merit Medical Systems, Inc. is a global leader in healthcare technology, founded in 1987, focusing on the development, manufacture, and distribution of proprietary disposable medical devices for interventional, diagnostic, and therapeutic procedures, particularly in cardiology, radiology, oncology, critical care, and endoscopy [7]. Product Launch - The company announced the US commercial release of its Ventrax Delivery System, which is the latest addition to its electrophysiology (EP) and cardiac rhythm management (CRM) portfolio [1][2]. Product Features - The Ventrax Delivery System is designed to facilitate the placement of devices used in ablation procedures for treating ventricular tachycardia (VT), a condition that contributes to a significant number of sudden cardiac deaths in the US, estimated between 184,000 and 450,000 annually [3]. - Key features of the Ventrax system include a 95-cm sheath for accessing target locations, an ultralow-profile transition for smooth insertion, and an angled tip to enhance the reach of an ablation catheter [6]. Market Context - VT ablation is one of the fastest-growing areas in electrophysiology, with many physicians adopting retrograde aortic access for VT procedures, indicating a rising demand for effective access tools in this field [7].

Novel all-in-one retrograde aortic access delivery system supports streamlined treatment of ventricular tachycardiaSOUTH JORDAN, Utah, April 09, 2025 (GLOBE NEWSWIRE) -- Merit Medical Systems, Inc. (NASDAQ: MMSI), a global leader in healthcare technology, today announced the US commercial release of its Ventrax Delivery System. The new delivery system is Merit’s latest addition to its growing electrophysiology (EP) and cardiac rhythm management (CRM) portfolio. The portfolio provides a unique selection of s ...

Financial Results Announcement - Merit Medical Systems, Inc. will release its financial results for the quarter ended March 31, 2025, after the stock market closes on April 24, 2025 [1] - An investor conference call is scheduled for the same day at 5:00 p.m. Eastern [1] Accessing the Conference Call - Pre-registration is required to access the conference call, with confirmation and dial-in details provided to registrants [2] - A live webcast and slide deck will be available for viewing [2] Company Overview - Merit Medical Systems, Inc. was founded in 1987 and specializes in the development, manufacture, and distribution of proprietary medical devices for various medical procedures [3] - The company operates in fields such as cardiology, radiology, oncology, critical care, and endoscopy, serving customers globally with a sales force and clinical support team of over 800 individuals [3] - Merit employs approximately 7,300 people worldwide [3]