Merit Medical Systems, Inc. · NASDAQ:MMSI
Merit Medical Systems — Investor Presentation (November 2020)
20 slides from Merit Medical Systems's investor presentation, Nov 10, 2020
Slide 1: Investor Call November 10, 2020: Foundations for Growth
1 Investor Call November 10, 2020 Foundations for Growth
Slide 2: Cautionary Statement Regarding Forward-Looking Statements
2 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,
Slide 3: Non-GAAP Financial Measures
3 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 regard
Slide 4: Objectives of today's call
4 During the call, we will share additional color in three areas: Process to-date to develop our “Foundations for Growth” Program Projected financial profile of Merit at the end of 2023 Assumptions supporting the forecasted improvement in profitability and cash flow generation Formal announcement of
Slide 5: Intro – process update: Merit's recent activities at a glance
5 Intro – process update Merit's recent activities at a glance Strong Q3 results reported on October 28th We are dedicated to deliver short- and long-term improvement of our financials – and have several initiatives well underway • On track to complete transfer of 14 product lines to our facilities
Slide 6: Foundations for Growth Program with Boston Consulting Group
6 To develop this program, we have engaged and partnered with Boston Consulting Group to activate and bring the best out of our company Build a foundation for sustained success • Invest in our people and build new capabilities to meet the evolving needs of our changing healthcare markets and drive s
Slide 7: Foundations for Growth (FfG)
7 Commercial Excellence Refinement of our commercial operations, Go-to-market and omni- channel strategies in light of the evolving needs of our customers Foundations for Growth (FfG) Innovation and Portfolio Optimization New processes and tools to optimize our portfolio and emphasize innovation and
Slide 8: Financial targets: Foundations for Growth 3-year targets
8 Financial targets Foundations for Growth 3-year targets 5-7% Revenue CAGR 2020 - 2023 Revenue 18-21% Non-GAAP operating margin end-2023 Operating margin Cash flow $300M+ Free cash flow 2021 through 2023 $1.1B+ Revenue in 2023 Note: Revenue growth refers to organic, constant currency annual growth
Slide 9: Revenue
9 Revenue Note: Revenue growth refers to organic, constant currency annual growth rate from 2020 to 2023. 5-7% Revenue CAGR 2020 - 2023 $1.1B+ Revenue in 2023 Geographic mix Market growth by major categories Market share gain over next 3 years Growth drivers Revenue expectations Lower-end of the tar
Slide 10: Organic, constant currency revenue growth commentary
10 Organic, constant currency revenue growth commentary: • Excludes benefit from foreign currency exchange: $4M on GAAP revenue for Jan to Dec 2021 • Assumes no material change in the impact on our business from the global COVID-19 pandemic • Assumes no extraordinary transactions 2020 2023 1,100+ 95
Slide 11: Operating margin
11 Operating margin 18-21% Non-GAAP operating margin end-2023 Gross margins Operating expenses Continued efficiencies from initiatives started in the last 18 months New ways of working and capabilities to drive efficiency and leverage 2020 financial guidance: ~13% non-GAAP operating margin Margin ex
Slide 12: Cash flow generation
12 $300M+ Free cash flow 2021 through 2023 Cash flow generation Projected cash flow over the 3-year time period is forecasted to fortify Merit's financial condition Enhanced balance sheet Reduced borrowings Increased cash position
Slide 13: Yy so
Yy so Cc wv O = — —_ i VY) # q ~ &f =) ;
Slide 14: Appendix
14 Appendix 14
Slide 15: 2020 Financial Guidance
15 2020 Financial Guidance The Company also reaffirmed its 2020 financial guidance. Merit’s financial guidance for the year ending December 31, 2020 is subject to risks and uncertainties identified in this presentation and in Merit’s public filings. Financial Measure Updated 2020 Guidance Net Sales
Slide 16: Notes to non-GAAP financial measures
16 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, reference non-GAAP financial
Slide 17: Notes to non-GAAP financial measures (cont.)
17 Notes to non-GAAP financial measures (cont.) Organic Revenue and Organic Revenue on a Constant Currency Basis Merit’s organic revenue is defined as GAAP revenue adjusted for revenue from acquisitions or divestitures. Organic revenue on a constant currency basis is defined as organic revenue adjus
Slide 18: Reconciliation of GAAP Gross Margin to Non-GAAP Gross Margin
18 Reconciliation of GAAP Gross Margin to Non-GAAP Gross Margin (Unaudited, as a percentage of forecasted sales) Low End High End Year Ended Year Ended December 31, 2023 December 31, 2023 % Sales % Sales GAAP Gross Margin 47.8 % 48.8 % Amortization of intangibles 3.8 % 3.6 % Non-GAAP Gross Margin 51
Slide 19: Reconciliation of GAAP Operating Margin to Non-GAAP Operating Margin
19 Reconciliation of GAAP Operating Margin to Non-GAAP Operating Margin (Unaudited, as a percentage of forecasted sales) Low End High End Year Ended Year Ended December 31, 2023 December 31, 2023 % Sales % Sales GAAP Operating Margin 13.7 % 17.0 % Cost of Sales Amortization of intangibles 3.8 % 3.6
Slide 20: Slide 20
Merit Medical Systems — Investor Presentation (November 2020) on 6ix