Merit Medical Systems, Inc. · NASDAQ:MMSI
Merit Medical Systems — Q2 2020 Earnings Presentation
22 slides from Merit Medical Systems's earnings presentation, Oct 1, 2020
Slide 1: Second Quarter 2020 Results
Second 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. ~ 6,000 Empl
Slide 5: Merit's Investment Highlights
Merit’s Investment Highlights Leading disposable medical product solutions provider across many 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 coun
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 site consolidations: – Update: Transfer of product lines is on track to be completed by en
Slide 8: COVID-19 Update – What we currently see
COVID-19 Update – What we currently see The decline in procedure volumes observed in the first half of 2020 is expected to continue to create a headwind throughout the year, but we are also seeing signs of recovery in some markets. Visibility for procedures continues to be limited, and we are not ab
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 have taken and will continue to take the following actions to reduce operating expenses: • Continued execution on previously disclosed operational efficiencies. • Implemented salary reductions
Slide 10: Financial Summary GAAP
Financial Summary GAAP Q2 2020 Q2 2019 YTD 2020 YTD 2019 Revenues $218.4M $255.5M $461.9M $493.9M Gross Margin 38.6% 43.8% 40.7% 43.9% Operating Margin (8.7%) 4.8% (3.8%) 4.4% Net Income (Loss) ($19.1M) $6.9M ($22.2M) $13.1M Earnings (Loss) per Share ($0.34) $0.12 ($0.40) $0.23 10
Slide 11: Financial Summary Non-GAAP
Financial Summary Non-GAAP* Q2 2020 Q2 2019 YTD 2020 YTD 2019 Revenues $220.7M $255.5M $466.2M $493.9M (Core Constant Currency) † Gross Margin 44.7% 48.7% 46.7% 48.9% Operating Margin 11.2% 13.3% 12.0% 12.7% Net Income $17.4M $23.8M $38.5M $44.4M Earnings per Share $0.31 $0.42 $0.69 $0.79 * See "Not
Slide 12: Revenue by Geography - Q2
Revenue by Geography - Q2 Q2 2020 REVENUE BREAKDOWN REVENUE - Q2 2020 COMPARED TO Q2 2019 International 29.0% EMEA United States International EMEA Non-GAAP 29.6% 16.9% Non-GAAP 17.1% -0.8% -3.8% United States 54.1% Non-GAAP 53.3% -16.2% -18.3% -18.7% -18.0% GAAP Non-GAAP Core Constant Currency* * N
Slide 13: Revenue by Geography - YTD
Revenue by Geography - YTD Q2 2020 REVENUE BREAKDOWN REVENUE - YTD 2020 COMPARED TO YTD 2019 EMEA United States International EMEA International 18.7% 25.2% Non-GAAP 18.8% Non-GAAP 25.7% -0.9% -2.1% -2.7% -4.9% United States 56.1% Non-GAAP 55.5% -8.3% -8.6% GAAP Non-GAAP Core Constant Currency* * No
Slide 14: 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 15: 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 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) T hree Months Ended T hree Months Ended June 30, 2020 June 30, 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 in
Slide 17: 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) Six Months Ended Six Months Ended June 30, 2020 June 30, 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 18: 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) Three Months Ended Three Months Ended Six Months Ended Six Months Ended June 30, 2020 June 30, 2019 June 30, 2020 June 30, 2019 Amounts % Sales Amounts % Sales Amounts % Sales Amo
Slide 19: Footnotes to Reconciliations of GAAP Net Income and Operating Income
Footnotes to Reconciliations of GAAP Net Income (Loss) to Non-GAAP Net Income and GAAP Operating Income (Loss) 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 the announced c
Slide 20: Reconciliation of Reported Revenue to Core Revenue and Constant Currency 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 Six Months Ended June 30, June 30, % Change 2020 2019 % Change 2020 2019 Repo
Slide 21: 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 Six Months Ended June 30, June 30, 2020 2019 2020 2019 Reported Gross Margin 38.6 % 43.8 % 40.7 % 43.9 % Add back impact of: Amortization of intangibles 5.9 % 4.8 % 5
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