Acquisition and Financial Impact - Merit Medical signed an agreement to purchase Cook Medical's lead management portfolio for approximately $210 million, expected to close in Q4 2024[1]. - The acquisition is projected to add approximately $40 million in annual revenue starting in fiscal year 2025, enhancing Merit's electrophysiology and CRM business[1]. - The acquisition is expected to be modestly dilutive to Merit's full-year 2024 non-GAAP profitability due to partial-year contribution[4]. - The acquisition is projected to be accretive to non-GAAP gross margin and operating margin in the first full year post-close[5]. - Merit anticipates the acquisition will enhance its position in the cardiac intervention market, contributing to over $100 million in combined annualized revenue[3]. - The financial profile of the acquisition is considered attractive, aligning with Merit's goal of sustainable growth and strong free cash flow generation[4]. Financial Guidance and Performance - The updated full-year 2024 financial guidance reflects net sales of $1.339 - $1.351 billion, a year-over-year increase of 6.5% - 7.5%[6]. - Non-GAAP earnings per share guidance for 2024 is projected at $3.25 - $3.34, representing a year-over-year increase of 14% - 17%[6]. - Cook Medical's lead management business generated approximately $37 million in revenue for the twelve months ending December 31, 2023, with sales distribution of 41% in the US, 42% in EMEA, 11% in APAC, and 6% in ROW[5]. Market Opportunities and Challenges - The cardiac intervention market represents an annual addressable opportunity of over $900 million in the US, EMEA, and APAC regions[3]. - The company is aware of the risks associated with market acceptance of new products and competition in the medical device industry[23]. - Merit Medical's financial results are subject to various uncertainties, including supply chain disruptions and changes in economic conditions[23]. Compliance and Regulatory Considerations - The company is actively pursuing new product development and regulatory approvals, particularly under the European Union Medical Device Regulation[23]. - Merit Medical faces potential challenges related to compliance with healthcare regulations and the impact of governmental scrutiny on its operations[23]. - The company is committed to maintaining high standards of quality and ethics in its medical device offerings[21]. Strategic Focus and Relationships - Merit Medical's growth strategy includes managing acquisitions effectively and integrating new technologies[23]. - The company emphasizes the importance of its relationships with suppliers and distributors in various jurisdictions[23]. - The company anticipates achieving projected sales and operating margins post-acquisition, although there are risks associated with integration and market conditions[23]. - Merit Medical's financial estimates and forward-looking statements are subject to change and should not be relied upon as definitive predictions[22].

Core Viewpoint - Merit Medical Systems, Inc. has signed a definitive asset purchase agreement to acquire Cook Medical's lead management portfolio for approximately $210 million, which is expected to enhance its electrophysiology and cardiac rhythm management (CRM) business, contributing an estimated $40 million in annual revenue starting in fiscal year 2025 [1][3][4]. Group 1: Acquisition Details - The acquisition is projected to close in the fourth quarter of 2024, pending regulatory approvals and customary closing conditions [1]. - Cook Medical's lead management business has a 34-year operating history and offers a comprehensive product portfolio for lead management procedures [2]. - Merit plans to fund the acquisition through cash on hand and borrowings from its long-term credit facility [1]. Group 2: Financial Impact - The assets from Cook Medical are expected to generate approximately $37 million in revenue for the twelve months ending December 31, 2023, with geographical sales distribution of 41% in the US, 42% in EMEA, 11% in APAC, and 6% in ROW [4]. - The acquisition is anticipated to contribute between $4 million to $6 million in revenue from the projected closing date through the end of 2024, although it may dilute Merit's non-GAAP operating margin and net income for that year [4][5]. - For the fiscal year 2024, Merit has updated its financial guidance to reflect the acquisition's impact, projecting net sales between $1.339 billion and $1.351 billion, representing a year-over-year growth of 6.5% to 7.5% [8][9]. Group 3: Strategic Positioning - The acquisition aligns with Merit's Continued Growth Initiatives, enhancing its offerings for cardiac intervention patients and positioning the company to capture a larger share of the estimated $900 million annual addressable market in the US, EMEA, and APAC regions [3]. - The addition of Cook's lead management business is expected to result in over $100 million in combined annualized revenue from electrophysiology and CRM, strengthening Merit's market position [3].

Company Overview - Merit Medical Systems (MMSI) is headquartered in South Jordan, UT, and specializes in peripheral and cardiac intervention products for treating cardiac conditions related to interventional cardiology and electrophysiology [2] - The company operates through two segments: Cardiovascular and Endoscopy, with the Cardiovascular segment including various medical devices for vascular access [2][3] Financial Performance - MMSI's shares have increased by 26.4% year-to-date, contrasting with a 1% decline in the industry and a 16.3% rise in the S&P 500 Composite [1] - For the three months ending June 30, 2024, cardiovascular sales accounted for 96.9% of total sales, reflecting a 5.3% increase from the same period in 2023 [5] - The company reported total revenue growth of 5.6% on a reported basis and 6.6% at constant exchange rates (CER), driven primarily by the Cardiovascular segment [5][6] Growth Catalysts - The company executed an asset purchase agreement with EndoGastric Solutions, expanding its endoscopy portfolio with the EsophyX Z+ device for chronic gastroesophageal reflux disease [3] - In May, MMSI launched the basixSKY Inflation Device and received FDA clearance for the Siege Vascular Plug, indicating ongoing innovation and product development [4] Market Position - The company has demonstrated robust performance both domestically and internationally, with an expansion in operating margin that is expected to positively impact stock prices [6][7] - However, MMSI faces strong competition in interventional cardiology, diagnostics, and radiology markets, where larger companies may have more resources and market presence [8][9]

Core Insights - Merit Medical Systems, Inc. will present updates on two pivotal studies at the CIRSE conference in Lisbon, Portugal on September 14, 2024 [1] - The WAVE study will showcase 6-month clinical outcomes, while the MOTION study's design and methodology will also be discussed [2] Company Overview - Founded in 1987, Merit Medical specializes in the development, manufacture, and distribution of proprietary disposable medical devices for interventional, diagnostic, and therapeutic procedures [5] - The company serves hospitals globally with a sales force and clinical support team of over 700 individuals and employs approximately 7,100 people worldwide [5] Event Sponsorship - Merit Medical will sponsor two symposia during the CIRSE conference, focusing on clinical management of synovial arterial hypervascularity in the knee and long-term patency strategies for hemodialysis patients [3] - The symposia will be accessible with a free myCIRSE account, allowing on-demand viewing within 24 hours after the live sessions [5] Leadership Statement - Fred Lampropoulos, Chairman and CEO of Merit Medical, expressed honor in attending CIRSE and connecting with physician partners and interventional radiologists [4]

Financial Data and Key Metrics Changes - The company reported total revenue of $338 million in Q2 2024, representing a 5.6% year-over-year increase on a GAAP basis and a 6.6% increase on a constant currency basis, exceeding previous expectations [7][8] - Non-GAAP gross profit and operating profit grew by 6% and 11% respectively, leading to margin expansions of approximately 15 basis points and 92 basis points [8][27] - Free cash flow reached nearly $58 million in Q2, a record for the company, contributing to over $82 million in free cash flow for the first half of 2024, a more than fivefold increase year-over-year [9][28] Business Line Data and Key Metrics Changes - The Cardiovascular segment grew by 6%, while the Endoscopy segment saw a significant increase of 16% in sales [18] - Peripheral intervention product sales increased by 11%, accounting for nearly 74% of total Cardiovascular segment growth [19] - Endoscopy segment sales exceeded expectations, indicating a normalization of growth trends [21] Market Data and Key Metrics Changes - U.S. sales increased by 8.5% on a constant currency basis, while international sales grew by 4% year-over-year [22] - Sales in the APAC region showed a 1% growth, significantly better than the previously expected decline of 10% to 11% [22] - China sales decreased by 5% year-over-year, which was better than the low 20% decline anticipated [22][42] Company Strategy and Development Direction - The company announced the acquisition of EndoGastric Solutions for approximately $105 million, enhancing its endoscopy product portfolio and expanding its footprint in the gastrointestinal market [14][15] - The company is focused on delivering strong execution, stable constant currency growth, and improving profitability through its growth initiatives program [9][10] - New product introductions and clinical validations are part of the company's strategy to enhance its product offerings and market presence [10][11] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the business's performance, highlighting strong U.S. and international growth [40] - The company anticipates continued strong free cash flow generation and has raised its free cash flow target for 2024 to at least $130 million [59] - Management is confident in achieving updated financial guidance, reflecting a strong outlook for the remainder of the year [29][31] Other Important Information - The company has made significant enhancements to its executive leadership team and Board of Directors, which is expected to support its growth initiatives [12][13] - The company is preparing for the presentation of clinical results from its WRAPSODY studies at key medical meetings, which could influence future market positioning [12][63] Q&A Session Summary Question: Guidance and Momentum - The company is optimistic about maintaining momentum from the first half of the year into the second half, with better-than-expected results from China [38][40] Question: EndoGastric Solutions Integration - The company plans to combine sales teams for cross-selling opportunities, enhancing efficiency and market reach [45][47] Question: WRAPSODY Competition - Management believes in the superiority of their technology compared to competitors and is excited about future market opportunities [52][54] Question: Gross Margin Trends - The company is pleased with gross margin performance and expects it to remain stable moving forward [41][43] Question: Free Cash Flow Utilization - The company anticipates strong free cash flow generation and plans to utilize it effectively to support growth initiatives [59]

For the quarter ended June 2024, Merit Medical (MMSI) reported revenue of $338 million, up 5.6% over the same period last year. EPS came in at $0.92, compared to $0.81 in the year-ago quarter. The reported revenue represents a surprise of +0.92% over the Zacks Consensus Estimate of $334.94 million. With the consensus EPS estimate being $0.88, the EPS surprise was +4.55%. While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to Wall Street ex ...

Merit Medical (MMSI) came out with quarterly earnings of $0.92 per share, beating the Zacks Consensus Estimate of $0.88 per share. This compares to earnings of $0.81 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of 4.55%. A quarter ago, it was expected that this maker of disposable medical devices would post earnings of $0.71 per share when it actually produced earnings of $0.77, delivering a surprise of 8.45%. Over the last f ...

Second Quarter 2024 Highlights† Reported revenue of $338.0 million, up 5.6% Constant currency revenue* up 6.6% Constant currency revenue, organic,* up 5.0% GAAP operating margin of 13.6%, compared to 9.0% in prior year period Non-GAAP operating margin* of 20.1%, compared to 19.1% in prior year period GAAP EPS $0.61, up 75.7% Non-GAAP EPS* $0.92, up 16.8% † Comparisons noted in the bullet points are calculated for the current quarter compared with the same prior year period unless otherwise specified. * The ...

Shares of Merit Medical Systems, Inc. (MMSI) scaled a new 52-week high of $86.44 on Jun 28, before closing the session slightly lower at $85.95. Over the past year, this Zacks Rank #3 (Hold) stock has gained 4.2% against the 2.2% decline of the industry. The S&P 500 has witnessed 23.7% growth in the said time frame. Over the past five years, the company registered earnings growth of 15.2% compared with the industry's 12.9% rise. The company's long-term expected growth rate of 10.8% compares with the industr ...

| --- | --- | |--------------------------------------------------------|--------------------------------------------------------------------------| | | | | PR/Media Inquiries: Sarah Comstock Merit Medical | Investor Inquiries: Mike Piccinino, CFA, IRC Westwicke - ICR | | +1-801-432-2864 | +1-443-213-0509 | | sarah.comstock@merit.com | mike.piccinino@westwicke.com | GERD is a digestive disorder that occurs when the lower esophageal sphincter doesn't tighten correctly, allowing acid from the stomach to enter ...