Merit Medical Systems, Inc. · NASDAQ:MMSI
Merit Medical Systems — Q3 2019 Earnings Presentation
25 slides from Merit Medical Systems's earnings presentation, Oct 30, 2019
Slide 1: Third Quarter 2019 Results; Revised 2019 Guidance
FRED LAMPROPOULOS Chairman & CEO Raul Parra CFO Third Quarter 2019 Results; Revised 2019 Guidance Exhibit 99.2
Slide 2: Disclosure Regarding Forward-Looking Statements
DISCLOSURE 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
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: Financial Summary GAAP
Revenue $ 243.0 M $ 221.7 M $ 736.9 M $ 649.5 M Gross Margin 42.8 % 46 % 43.5 % 44.7 % Net Income $ (3.4) M $ 16.6 M $ 9.7 M $ 32.8 M EPS $ (0.06) $ 0.30 $ 0.17 $ 0.62 YTD 2018 Q3 2019 Q3 2018 YTD 2019 Financial Summary GAAP 4
Slide 5: Financial Summary Non-GAAP
Financial Summary Non-GAAP* * See "Notes to Non-GAAP Financial Measures" below for full definition of all Non-GAAP measures. † Non-GAAP measure, representing net organic sales on a constant currency basis. 5 Revenue (Core, Constant Currency)† $ 231.3 M $ 221.7 M $ 701.1 M $ 649.5 M Non-GAAP Gross Ma
Slide 6: Revised Guidance
6 Revised Guidance Based upon information currently available to Merit’s management, Merit estimates for the year ending December 31, 2019, absent material acquisitions, non-recurring transactions or other factors beyond Merit’s control, the following: Financial Measure Net Sales $1,007 - $1,029 mil
Slide 7: Q3 2019 Revenue by Region
Q3 2019 Revenue by Region * Non-GAAP measure, representing net organic sales on a constant currency basis. See "Notes to Non- GAAP Financial Measures" below for full definition of all Non-GAAP measures. 7 (Non-GAAP 17.8%) (Non-GAAP 56.5%) (Non-GAAP 25.7%)
Slide 8: YTD 2019 Revenue by Region
(Non-GAAP 19.0%) (Non-GAAP 54.4%) (Non-GAAP 26.6%) YTD 2019 Revenue by Region * Non-GAAP measure, representing net organic sales on a constant currency basis. See "Notes to Non- GAAP Financial Measures" below for full definition of all Non-GAAP measures. 8
Slide 9: New Products for Introduction during the First Half of 2020
9 New Products for Introduction during the First Half of 2020 – Arcadia™ Kyphoplasty System – SYNC Evo™ and SYNCH™ Vascular Closure Devices – New ReSolve® Mini Pigtail Drainage Catheter – New Fountain® Infusion Catheter – GO2 Wire™ – Concierge Catalyst ™ Specialty Catheter
Slide 10: Growth Products | Embolotherapy
GROWTH PRODUCTS | EMBOLOTHERAPY • Embosphere® Microspheres • Torpedo™ Gelatin Foam • EmboCube™ Embolization Gelatin 10
Slide 11: Growth Products | Embolotherapy (cont.)
• SwiftNINJA® Steerable Microcatheter • Merit Pursue™ Microcatheters • Merit Maestro® Microcatheter • True Form™ Reshapable Guide Wire GROWTH PRODUCTS | EMBOLOTHERAPY 11
Slide 12: Growth Products | Electrophysiology
GROWTH PRODUCTS | ELECTROPHYSIOLOGY • HeartSpan® Transseptal Needle • HeartSpan® Steerable Sheath Introducer • Worley™ Advanced LV Lead Delivery System • Prelude SNAP™ Splittable Sheath Introducer 12
Slide 13: Growth Products | Drainage
GROWTH PRODUCTS | DRAINAGE • ReSolve® Plus Locking Drainage Catheters • ReSolve CirQ™ Nephrostomy Catheter • ReSolve® Biliary Locking Drainage Catheters • Revolution™ Catheter Securement Device • StayFIX® Fixation Device 13
Slide 14: Growth Products | Drainage (cont.)
• MAK-NV™ Introducer System • OneStep™ Centesis Catheters • Merit Drainage Depot™ Bags GROWTH PRODUCTS | DRAINAGE 14
Slide 15: Growth Products | Radial
GROWTH PRODUCTS | RADIAL • SYNC EVO™ Radial Compression Device • SYNC DISTAL™ Distal Radial Compression Device • Prelude IDeal™ Hydrophilic Sheath Introducer • PreludeEASE™ Hydrophilic Sheath Introducer • Prelude® Short Sheath Introducer 15
Slide 16: Growth Products | Drainage
GROWTH PRODUCTS | DRAINAGE • ReSolve ConvertX® Nephroureteral Stent System 16
Slide 17: Growth Products | Fluid Management
GROWTH PRODUCTS | FLUID MANAGEMENT • Merit® Manifolds • Medallion® Syringes • Inject8™ Coronary Control Syringes • High Pressure Tubing • Meritrans® Pressure Transducers • TRAM® Manifold with Integral Transducer • Fluid Administration Systems • Miser® Contrast Management System 17
Slide 18: 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 19: 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 other than the U.S. dollar at the applicable foreign exchange rates in effec
Slide 20: Reconciliation of GAAP Net Income to Non-GAAP Net Income, Q3
20 GAAP net income (loss) $ (5,690) $ 2,292 $ (3,398) $ (0.06) $ 19,385 $ (2,766) $ 16,619 $ 0.30 Non-GAAP adjustments: Cost of Sales Amortization of intangibles 12,725 (3,259) 9,466 0.17 8,150 (2,083) 6,067 0.12 Inventory mark-up related to acquisitions 55 (14) 41 0.00 216 (56) 160 0.00 Operating e
Slide 21: Reconciliation of GAAP Net Income to Non-GAAP Net Income, YTD
21 GAAP net income $ 10,155 $ (499) $ 9,656 $ 0.17 $ 37,309 $ (4,481) $ 32,828 $ 0.62 Non-GAAP adjustments: Cost of Sales Amortization of intangibles 36,882 (9,444) 27,438 0.48 22,550 (5,759) 16,791 0.31 Inventory mark-up related to acquisitions 939 (241) 698 0.01 3,978 (1,024) 2,954 0.06 Operating
Slide 22: Footnotes to Reconciliations of GAAP Net Income to Non-GAAP Net Income
(a) Reflects the tax effect associated with pre-tax income and the non-GAAP adjustments. (b) Represents transaction costs and certain integration costs, including travel, related to acquisitions. (c) Represents incremental expenses incurred to comply with the pending Medical Device Regulation (MDR)
Slide 23: Revenue Reconciliation Footnotes
(a) The constant currency revenue adjustment of $2.4 million and $11.8 million to reported revenue and to core revenue, for the three and nine months ended September 30, 2019, respectively, were calculated using the applicable average foreign exchange rates for the three and nine months ended Septem
Slide 24: Reconciliation of Reported Gross Margin to Non-GAAP Gross Margin
24 Reconciliation of Reported Gross Margin to Non-GAAP Gross Margin (Non-GAAP) (Unaudited, as a percentage of reported revenue) 2019 2018 2019 2018 Reported Gross Margin 42.8 % 46.0 % 43.5 % 44.7 % Add back impact of: Amortization of intangibles 5.2 % 3.7 % 5.0 % 3.4 % Inventory mark-up related to a
Slide 25: Understand. Innovate. Deliver.
AERC Understand. Innovate. Deliver.”
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