Merit Medical Systems, Inc. · NASDAQ:MMSI
Merit Medical Systems — Investor Day (March 2015)
35 slides from Merit Medical Systems's investor day presentation, Mar 5, 2015
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Slide 2: Investor Day | March 5th 2015
2 FRED P. LAMPROPOULOS CHAIRMAN & CHIEF EXECUTIVE OFFICER KENT W. STANGER CHIEF FINANCIAL OFFICER INVESTOR DAY | March 5th 2015
Slide 3: Disclosure Regarding Forward-Looking Statements
3 DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS This presentation includes “forward-looking statements” as defined within applicable securities laws and regulators. All statements in this presentation, other than statements of historical fact, are “forward-looking statements”, including any projec
Slide 4: Disciplined, customer-focused enterprise
4 4 Disciplined, customer-focused enterprise 3 Target high-growth, high-return opportunities 2 Optimize operational capability 1 Enhance growth and profitability
Slide 5: Revenue Outlook
Revenue Outlook '$580M-$590M $535M-S545M
Slide 6: Revenue Drivers
6 Revenue Drivers Market Share Products o Control of key business processes such as licenses and distribution to build sustainable growth o Diversified revenue streams: direct, distributor, OEM, and semi-direct Sales Model Optimization o Enter complementary product segments while securing existing m
Slide 7: Global Logistical Reach & Revenue Channels
7 Global Logistical Reach & Revenue Channels OEM Direct To Hospital Developed Distribution Network Semi Direct SENSORS COATINGS
Slide 8: Revenue Growth by Channel
8 o Above-market growth rates o Continued market share gains 3-Year CAGR 7% United States Revenue Growth o Focus on technology o Access to additional revenue streams 3-Year CAGR 25% o Portfolio expansion o Above-market growth rates 3-Year CAGR 15% OEM DIRECT ENDOTEK
Slide 9: International Tier One Focus
9 CHINA Population 1,357,380,000 3-Year CAGR 25% International Tier One Focus JAPAN Population 126,435,000 3-Year CAGR 18% BRAZIL Population 202,768,000 3-Year CAGR 17% SOUTHEAST ASIA Hong Kong & Taiwan Population 673,981,000 3-Year CAGR 31% RUSSIA Population 143,976,000 3-Year CAGR 31%
Slide 10: China Revenue Growth
10 China Revenue Growth
Slide 11: Gross Margin Outlook
11 Gross Margin Outlook GAAP Percentage of Sales NON-GAAP Percentage of Sales
Slide 12: Gross Margin Drivers
12 Gross Margin Drivers • Efficient Asset Utilization • Facility Consolidation • Insourcing • Lean Manufacturing
Slide 13: Gross Margin Drivers
13 Gross Margin Drivers • Automation • Fulfillment • Shipping • Digital Initiatives • Print & Apply Global Logistics
Slide 14: Gross Margin Drivers
14 Gross Margin Drivers Product Mix System Selling R&D Strategy Sales Focus Advanced Products & Therapies
Slide 15: Cost Effective Environments Mexico
15 Cost Effective Environments Mexico • 150 employees as of May 1st • 500 employees in 3 years • Rapid response, logistics pipeline • Improved product economics South Jordan, Utah Tijuana, Mexico
Slide 16: Cost Effective Environments Ireland
16 Cost Effective Environments Ireland • Highly trained workforce • Favorable incentives • Research and development • Manufacturing access to our fastest growing markets
Slide 17: Operating Focus
17 Operating Focus 1 2 3 4 Value Per Dollar Spent o Buying authority o Shared services o Capitalize on global scale Culture o Understand. Innovate. Deliver.™ o Cost discipline while preserving quality and innovation Sales Force Efficiency o Relatively fixed cost, focused sales force o Effective new
Slide 18: Research & Development
Research & Development PERIPHERAL INTERVENTION CARDIAC INTERVENTION ENDOSCOPY
Slide 19: Research & Development Strategy
19 Research & Development Strategy 1 2 3 4 Global R&D Centers of Excellence o Coatings o Guide Wires o Catheters o Sensors o Embolization o Stents Disciplined Investment o Develop high margin advanced products and therapies that address underserved, sizable global markets o Enhance existing portfoli
Slide 20: Endoscopy Portfolio Priorities
20 Endoscopy Portfolio Priorities • Introduce new, high-margin products • Secure airway stent market position with optimized, comprehensive product lines • Offer customers improved balloon dilation, through proprietary balloon design • Improve patient care and outcomes by offering advanced esophagea
Slide 21: Peripheral Intervention Portfolio Priorities
21 Peripheral Intervention Portfolio Priorities • Interventional Gynecology: UTERINE • Interventional Oncology: HEPATIC • Interventional Urology: PROSTATIC • Interventional Gastroenterology: LEFT GASTRIC Initiatives • ask4UFE® patient education • Clinical differentiation • Radial education and adopt
Slide 22: Peripheral Intervention Portfolio Priorities
22 Peripheral Intervention Portfolio Priorities • Complementary capability from diagnosis to treatment • Improved sample quality in smaller, lighter device • Leverage current call point presence Initiatives • Needle design and mechanical technology • Leverages Merit’s core strengths • Training for a
Slide 23: Peripheral Intervention Portfolio Priorities
23 Peripheral Intervention Portfolio Priorities • Designed to address an unmet clinical need • Broad range of diameters and lengths with a single-handed ergonomic delivery mechanism • Merit's initial entry into vascular stent market Initiatives • Utilize the stent graft technology platform to expand
Slide 24: Cardiac Intervention Portfolio Priorities
24 Cardiac Intervention Portfolio Priorities • Pacing Lead Introduction– Classic Sheath™, Prelude Snap™ • Left Ventricular Lead Delivery – Worley™ Advanced LV Lead Delivery System • Electrophysiology Diagnostic & Ablation Therapies—HeartSpan® Steerable and fixed curve sheaths, and transseptal needle
Slide 25: Cardiac Intervention Health Care Economics
25 Cardiac Intervention Health Care Economics • Cost savings and patient preference drive adoption of radial access Clinical Program Development • Provide ThinkRadial training program to physicians Portfolio Optimization • Deliver full solution of radial products across the workflow to enable adopti
Slide 26: Financial Business Drivers: Sales
26 Financial Business Drivers Sales NON-GAAP 2014 $510M 2015 $535M-$545M 2016 $580M-$590M 2017 $625M-$635M
Slide 27: Financial Business Drivers: Gross Margins
27 Financial Business Drivers Gross Margins NON-GAAP 2014 46.4% 2015 46.5%-47.5% 2016 47.0%-48.0% 2017 47.8%-48.8%
Slide 28: Financial Business Drivers: Income from Operations
28 Financial Business Drivers Income from Operations NON-GAAP 2014 11.1% 2015 10.9%-11.9% 2016 11.5%-12.5% 2017 12.4%-13.4%
Slide 29: Financial Business Drivers: EPS
29 Financial Business Drivers EPS NON-GAAP 2014 $0.78 2015 $0.85-$0.89 2016 $0.95-$1.01 2017 $1.10-$1.18
Slide 30: Financial Business Drivers: EBITDA
30 Financial Business Drivers EBITDA NON-GAAP 2014 $78.1M 2015 $84M-$88M 2016 $90M-$96M 2017 $98M-$106M
Slide 31: Financial Business Drivers: Free Cash Flow
31 Financial Business Drivers Free Cash Flow NON-GAAP 2014 $19M 2015 $20M-$25M 2016 $30M-$35M 2017 $35M-$40M
Slide 32: Financial Business Drivers: Non-GAAP Summary
32 Financial Business Drivers NON-GAAP 2014 2015 2016 2017 Sales $510M $535M-$545M $580M-$590M $625M-$635M Gross Margin 46.4% 46.5%-47.5% 47.0%-48.0% 47.8%-48.8% Income From Operations 11.1% 10.9%-11.9% 11.5%-12.5% 12.4%-13.4% EPS $0.78 $0.85-$0.89 $0.95-$1.01 $1.10-$1.18 EBITDA $78.1M $84M-$88M $90
Slide 33: Financial Business Drivers: GAAP Summary
33 Financial Business Drivers GAAP 2014 2015 2016 2017 Sales $510M $535M-$545M $580M-$590M $625M-$635M Gross Margin 44.2% 44.5%-45.5% 45.1%-46.1% 46.0%-47.0% Income From Operations 7.9% 8.2%-9.2% 9.0%-10.0% 10.2%-11.2% EPS $0.53 $0.63-$0.67 $0.74-$0.80 $0.91-$0.99 EBITDA $78.1M $84M-$88M $90M-$96M $
Slide 34: Disciplined, customer-focused enterprise
34 1 2 3 4 Disciplined, customer-focused enterprise Guided by strong core values to globally address unmet or underserved healthcare needs Target high-growth, high-return opportunities Through understanding, innovating, and delivering in peripheral, cardiac, OEM, and endoscopy business lines Optimiz
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