Merit Medical Systems, Inc. · NASDAQ:MMSI
Merit Medical Systems — Q3 2020 Earnings Presentation
21 slides from Merit Medical Systems's earnings presentation, November 2020
Slide 1: Third Quarter 2020 Results; Updated 2020 Financial Guidance
Third Quarter 2020 Results; Updated 2020 Financial Guidance FRED LAMPROPOULOS Chairman & CEO Raul Parra CFO
Slide 2: Cautionary Statement Regarding Forward-Looking Statements
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, ar
Slide 3: Non-GAAP Financial Measures
NON-GAAP FINANCIAL MEASURES Although Merit’s financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”), Merit’s management believes that certain non-GAAP financial measures provide investors with useful information regardin
Slide 4: Key Updates
Key Updates Update on operational targets and other initiatives previously disclosed: • $6-10 million annualized cost savings (savings beginning in second half of 2021, based on current inventory levels): 14 product line transfers to Tijuana, Mexico and Pearland, Texas and site consolidations: – Upd
Slide 5: Key Updates (cont.)
Key Updates (cont.) Update on operational targets and other initiatives previously disclosed: • Increased alignment between company performance and broad-based employee compensation, in line with executive compensation practices. – Update: Currently in the engagement and scope of project process wit
Slide 6: COVID-19 Update – Q3 2020
COVID-19 Update – Q3 2020 • Sales were up 12% sequentially over Q2, led by continued high demand for our critical care offerings, as well as improved demand for our Cianna, access, and biopsy products, which improved product mix and improved our gross margins sequentially • Supply chain – We have no
Slide 7: Foundations for Growth
Foundations for Growth Management will host an investor call, “Foundations for Growth”, on Tuesday, November 10, 2020 at 5:00 p.m. Eastern (4:00 p.m. Central, 3:00 p.m. Mountain, and 2:00 p.m. Pacific) to introduce Merit’s multi-year financial targets for growth and improved profitability and will h
Slide 8: Financial Summary
Financial Summary GAAP Q3 2020 Q3 2019 YTD 2020 YTD 2019 Revenues $244.0M $243.0M $705.9M $736.9M Gross Margin 41.8% 42.8% 41.1% 43.5% Operating Margin 0.0% (1.2%) (2.5%) 2.6% Net Income (Loss) ($3.0M) ($3.4M) ($25.2M) $9.7M Earnings (Loss) per Share ($0.05) ($0.06) ($0.46) $0.17 8
Slide 9: Financial Summary
Financial Summary Non-GAAP* Q3 2020 Q3 2019 YTD 2020 YTD 2019 Revenues $242.7M $242.9M $708.9M $736.8M (Core Constant Currency) † Gross Margin 47.0% 48.1% 46.8% 48.7% Operating Margin 15.0% 9.2% 13.0% 11.5% Net Income $24.0M $15.7M $62.5M $60.0M Earnings per Share $0.42 $0.28 $1.11 $1.06 * See "Note
Slide 10: Revenue Breakdown – QTD
Revenue Breakdown – QTD Region Q3 2020 Q3 2019 $ Change % Change CC % Change* U.S. $143,109 $144,011 $(902) (0.6)% (0.6)% APAC 50,329 48,310 2,019 4.2% 2.5% EMEA 43,773 43,097 676 1.6% (0.5)% Other 6,764 7,631 (867) (11.4)% (4.5)% International 100,866 99,038 1,828 1.8% 0.6% Total $243,975 $243,049
Slide 11: Revenue Breakdown – YTD
Revenue Breakdown – YTD Region Q3 YTD 2020 Q3 YTD 2019 $ Change % Change CC % Change* U.S. $402,305 $426,730 $(24,425) (5.7)% (5.7)% APAC 147,841 149,465 (1,623) (1.1)% 0.0% EMEA 136,168 138,548 (2,380) (1.7)% (0.9)% Other 19,557 22,187 (2,630) (11.9)% (5.0)% International 303,566 310,200 (6,634) (2
Slide 12: Updated 2020 Guidance
Updated 2020 Guidance Financial Measure Updated 2020 Guidance Net Sales $950 – $959 million Net Income (Loss) (GAAP) $(11.8) – $(15.0) million Earnings (Loss) Per Share (GAAP) $(0.21) – $(0.27) Net Income (Non-GAAP) $85.5 – $88.5 million Earnings Per Share (Non-GAAP) $1.52 – $1.57 Merit’s financial
Slide 13: Notes to Non-GAAP Financial Measures
NOTES TO NON-GAAP FINANCIAL MEASURES For additional details, please see the accompanying press release and forward-looking statement disclosure. These presentation materials and associated commentary from Merit’s management, as well as the press release issued today, use non-GAAP financial measures,
Slide 14: Notes to Non-GAAP Financial Measures (cont.)
NOTES TO NON-GAAP FINANCIAL MEASURES (cont.) Constant Currency Revenue Merit’s revenue on a constant currency basis is prepared by translating the current-period reported revenue of subsidiaries whose functional currency is a currency other than the U.S. dollar at the applicable foreign exchange rat
Slide 15: Reconciliation of GAAP Net Income (Loss) to Non-GAAP Net Income
Reconciliation of GAAP Net Income (Loss) to Non-GAAP Net Income (Unaudited, in thousands except per share amounts) T hree Months Ended T hree Months Ended September 30, 2020 September 30, 2019 Pre-T ax T ax Impact After-T ax Per Share Impact Pre-T ax T ax Impact After-T ax Per Share Impact GAAP net
Slide 16: Reconciliation of GAAP Net Income (Loss) to Non-GAAP Net Income
Reconciliation of GAAP Net Income (Loss) to Non-GAAP Net Income (Unaudited, in thousands except per share amounts) Nine Months Ended Nine Months Ended September 30, 2020 September 30, 2019 Pre-T ax T ax Impact After-T ax Per Share Impact Pre-T ax T ax Impact After-T ax Per Share Impact GAAP net inco
Slide 17: Reconciliation of GAAP Operating Income (Loss) to Non-GAAP Operating Income
Reconciliation of GAAP Operating Income (Loss) to Non-GAAP Operating Income (Unaudited, in thousands except percentages) T hree Months Ended T hree Months Ended Nine Months Ended Nine Months Ended September 30, 2020 September 30, 2019 September 30, 2020 September 30, 2019 Amounts % Sales Amounts % S
Slide 18: Footnotes to Reconciliations of GAAP to Non-GAAP
Footnotes to Reconciliations of GAAP Net Income (Loss) to Non-GAAP Net Income and GAAP Operating Income (Loss) to Non-GAAP Operating Income (a) Represents performance-based share-based compensation expense, including stock-settled and cash-settled awards. (b) Includes severance related to corporate
Slide 19: Reconciliation of Reported Revenue to Core Revenue and Constant Currency
Reconciliation of Reported Revenue to Core Revenue (Non-GAAP), Constant Currency Revenue (Non-GAAP), and Core Revenue on a Constant Currency Basis (Non-GAAP) (Unaudited, in thousands except percentages) T hree Months Ended Nine Months Ended September 30, September 30, % Change 2020 2019 % Change 202
Slide 20: Reconciliation of Reported Gross Margin to Non-GAAP Gross Margin
Reconciliation of Reported Gross Margin to Non-GAAP Gross Margin (Unaudited, as a percentage of reported revenue) T hree Months Ended Nine Months Ended September 30, September 30, 2020 2019 2020 2019 Reported Gross Margin 41.8 % 42.8 % 41.1 % 43.5 % Add back impact of: Amortization of intangibles 5.
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