Merit Medical Systems, Inc. · NASDAQ:MMSI
Merit Medical Systems — Q1 2020 Earnings Presentation
20 slides from Merit Medical Systems's earnings presentation, Apr 1, 2020
Slide 1: First Quarter 2020 Results
First Quarter 2020 Results FRED LAMPROPOULOS Chairman & CEO Raul Parra CFO
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: Merit Medical Systems at a Glance
Merit Medical Systems at a Glance NIMBLE & POSITIONED FOR CONTINUED GROWTH DIVERSIFIED PORTFOLIO AND MANUFACTURING FOOTPRINT $995M 2019 Revenue ~200 >13,000 12 Proprietary Disposable Manufacturing ~14% 10-Year CAGR Medical Product Customers facilities Worldwide Categories > 1.3M Sq. Ft. ~ 6,100 Empl
Slide 5: Merit's Investment Highlights
Merit’s Investment Highlights Leading disposable medical product solutions provider across all of our target end markets Robust innovation engine driving substantial portfolio expansion and product growth Dedicated commercial engine of ~300 direct reps and distributor relationships in over 120 count
Slide 6: Multiple Drivers of Sustainable Growth
Multiple Drivers of Sustainable Growth Domestic Market International Markets Bringing new technologies to market Global expansion through development through innovation and acquisition and leverage of commercial footprint Expand Served Opportunistic Innovation Distributor to Direct Infrastructure Ma
Slide 7: Key Merit Medical Updates
Key Merit Medical Updates Update on operational targets and other initiatives previously disclosed: • $6-10 million annualized cost savings: 14 product line transfers to Tijuana, Mexico and Pearland, Texas and four site consolidations – Update: Current plan is on track with product line transfers –
Slide 8: COVID-19 Update – What we saw
COVID-19 Update – What we saw The decline in procedure volumes observed in the first quarter is expected to continue to create a headwind in 2020, but we are also seeing some tailwinds. Visibility for procedures for the remainder of the year is limited, and we are not able to predict when or how qui
Slide 9: COVID-19 Update – What we are doing
COVID-19 Update – What we are doing Given the impact of the COVID-19 pandemic on demand for procedures, we are taking the following actions to reduce operating expenses: • Continued execution on previously disclosed operational efficiencies • Implementing salary reductions for our executive officers
Slide 10: Financial Summary GAAP
Financial Summary GAAP Q1 2020 Q1 2019 Revenues $243.5M $238.3M Gross Margin 42.6% 43.9% Operating Margin 0.6% 4.0% Net Income (Loss) ($3.2M) $6.2M Earnings (Loss) per ($0.06) $0.11 share 10
Slide 11: Financial Summary Non-GAAP
Financial Summary Non-GAAP* Q1 2020 Q1 2019 Revenues $245.6M $238.3M (Core Constant Currency)† Gross Margin 48.5% 49.2% Operating Margin 12.7% 12.0% Net Income $21.1M $20.6M EPS $0.38 $0.37 * See "Notes to Non-GAAP Financial Measures" below for definition of Non-GAAP measures used in this presentati
Slide 12: Revenue by Geography
Revenue by Geography Q1 2020 REVENUE BREAKDOWN REVENUE GROWTH EMEA International 20.2% 15.0% 21.9% Non-GAAP 20.3% 13.1% Non-GAAP 22.3% Q1 2020 2.2% 2.0% United States (QoQ) 57.9% Non-GAAP 57.4% United States International EMEA -3.7% -6.2% GAAP Non-GAAP Core Constant Currency* * Non-GAAP measure, rep
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 to Non-GAAP Net Income
Reconciliation of GAAP Net Income to Non-GAAP Net Income (Unaudited, in thousands except per share amounts) T hree Months Ended T hree Months Ended March 31, 2020 March 31, 2019 Pre-T ax T ax Impact (a) After-T ax Per Share Impact Pre-T ax T ax Impact (a) After-T ax Per Share Impact GAAP net income
Slide 16: Reconciliation of GAAP Operating Income to Non-GAAP Operating Income
Reconciliation of GAAP Operating Income to Non-GAAP Operating Income (Unaudited, in thousands except percentages) March 31, 2020 March 31, 2019 Amounts % Sales Amounts % Sales Net Sales as Reported $ 243,525 $ 238,349 GAAP Operating income 1,362 0.6 % 9,523 4.0 % Cost of Sales Amortization of intang
Slide 17: Footnotes to Reconciliations of GAAP to Non-GAAP
Footnotes to Reconciliations of GAAP Net Income to Non-GAAP Net Income and GAAP Operating Income to Non-GAAP Operating Income (a) Reflects the tax effect associated with pre-tax income (loss) and the non-GAAP adjustments. (b) Represents write-off of inventory related to our distribution agreement wi
Slide 18: Reconciliation of Reported Revenue to Core Revenue
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 March 31, % Change 2020 2019 Reported Revenue 2.2 % $ 243,525 $ 238,349 Add:
Slide 19: 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 March 31, 2020 2019 Reported Gross Margin 42.6 % 43.9 % Add back impact of: Amortization of intangibles 5.3 % 5.0 % Inventory write-off 0.6 % — Inventory mark-up rela
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