================================================================================
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
April 21, 2003
-----------------------------------------------------------
(Date of earliest event reported}
MERIT MEDICAL SYSTEMS, INC.
------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Utah 0-18592 87-0447695
- ----------------------------- ---------------------- -----------------
(State or other jurisdiction (Commission File No.) (IRS Employer
of incorporation) Identification No.)
1600 West Merit Parkway
South Jordan, Utah 84095
------------------------------------------------------------
(Address of principal executive offices, including zip code)
Registrant's telephone number, including area code: (801) 253-1600
================================================================================
1
Item 7. Financial Statements and Exhibits
(c) Exhibits
99.1 Press Release Announcing Financial Results, Issued April 21, 2003
Item 9. Regulation FD Disclosure (including Item 12 information).
In accordance with Securities and Exchange Commission Release No.
33-8216, the following information, which is intended to be furnished under Item
12, "Results of Operations and Financial Condition," is being furnished under
this Item 9, "Regulation FD Disclosure."
On April 21, 2003, Merit Medical Systems, Inc. ("Merit") issued a press
release announcing financial results for the first quarter of 2003. The press
release is furnished herewith as Exhibit 99.1 and is incorporated herein by
reference.
Forward-Looking Statements
Statements in this Current Report on Form 8-K, including exhibits, that
are not purely historical facts, including statements regarding Merit's beliefs,
expectations, intentions or strategies for the future, may be "forward-looking
statements" under the Private Securities Litigation Reform Act of 1995. All
forward-looking statements involve a number of risks and uncertainties that
could cause actual results to differ materially from the plans, intentions and
expectations reflected in or suggested by the forward-looking statements. Such
risks and uncertainties include, among others, market acceptance of Merit's
products, product introductions, potential product recalls, delays in obtaining
regulatory approvals, cost increases, fluctuations in and obsolescence of
inventory, price and product competition, availability of labor and materials,
development of new products and techniques that could render Merit's products
obsolete, product liability claims, infringing technology, inability to protect
Merit's proprietary technology, foreign currency fluctuations and changes in
health care markets related to health care reform initiatives. Additional
information with respect to the factors and events that could cause differences
between forward-looking statements and future results is contained in Merit's
filings with the Securities and Exchange Commission, including Merit's Annual
Report on Form 10-K for the year ended December 31, 2002. Merit undertakes no
obligation to update any forward-looking statement to reflect events or
circumstances that may arise after the date of this filing.
2
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this Current Report on Form 8-K to be
signed on its behalf by the undersigned thereunto duly authorized.
MERIT MEDICAL SYSTEMS, INC.
By: /s/ Kent W. Stanger
-------------------------------------------------
Kent W. Stanger, Chief Financial Officer,
Secretary and Treasurer
April 21, 2003
3
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
-------- -------------------------------------------------------------------
99.2 Press Release Announcing Financial Results, Issued April 21, 2003
4
MERIT MEDICAL [logo]
1600 West Merit Parkway o South Jordan, UT 84095
Telephone: 801-253-1600 o Fax: 801-253-1688
PRESS RELEASE
- --------------------------------------------------------------------------------
FOR IMMEDIATE RELEASE
- ---------------------
Date: April 21, 2003
Contact: Nancy E. Schultz, Director, Corporate Communications
Phone: (801) 208-4167 Fax: (801) 253-6998
e-mail: nschultz@merit.com
Web Address: www.merit.com
MERIT MEDICAL SYSTEMS, INC. REPORTS 61 PERCENT RISE IN NET INCOME
INCLUDING EXTRA ITEMS ON RECORD REVENUES OF $31.7 MILLION FOR FIRST QUARTER 2003
SOUTH JORDAN, UTAH--Merit Medical Systems, Inc. (NASDAQ: NMS:MMSI),
today reported net income of $3.8 million, or $0.25 per share, on record
revenues of $31.7 million for its first quarter ended March 31, 2003. The net
income and per share figures include a gain from the settlement of a legal
dispute and sale of land in the amount of $512,317 (net of tax), or $0.03 per
share. For the first quarter of 2002, the Company reported net income of $2.3
million, or $0.16 per share, on revenues of $28.7 million.
All product categories of the Company's business contributed to its
revenue growth in the first quarter of 2003. Sales of inflation devices rose 15
percent, stand-alone device sales grew by 12 percent, custom kit sales rose 7
percent and catheter sales rose by 3 percent.
Fred P. Lampropoulos, Chairman and Chief Executive Officer of Merit,
said, "We are extremely pleased with the growth of our revenues in the first
quarter of this year, which were $1.8 million above our forecast. Sales grew
across the board, coming from our OEM division as well as international and
domestic sales.
5
"Sales of our inflation devices were driven primarily by increased
orders from our hospital customers due to our Broadlane/Tenet agreement, as well
as growth in spinal procedures using our digital inflation technology. New
contracts with HealthTrust and Consorta in part contributed to stand-alone
device sales growth. In addition, our new safety needle added a large portion to
the growth in our needle product line.
"Gross margins in the quarter were 290 basis points over last year's
first quarter. Our operating expenses declined as a percent of sales during the
quarter to yield a 15.6 percent operating margin, the second highest quarterly
operating margin we've ever experienced," continued Mr. Lampropoulos.
The gross profit margin for the first quarter of 2003 was 41.8 percent
of sales, compared with 38.9 percent of sales in the first quarter of 2002. In
the 2003 first quarter, selling, general and administrative costs declined as a
percent of sales to 22.7 percent, compared with 23.4 percent for the first
quarter of 2002. Research and development costs for the first quarter of 2003
were 3.5 percent of sales, compared with 3.4 percent of sales in the prior
year's period. Total operating expenses declined as a percent of sales to 26.2
percent, compared with 26.7 percent for the same period in 2002.
The Company noted that inventories declined by $1 million since
year-end to $17.7 million as of March 31, 2003. Additionally, cash flow from
operations was over $7 million for the quarter, bringing total cash to $16.2
million at quarter end.
6
INCOME STATEMENT
3 Mos. Ended 3/31
2003 2002
------------ ------------
(In Thousands Except Share Data)
REVENUES $ 31,741 $ 28,672
COST OF SALES 18,470 17,520
------------ ------------
GROSS PROFIT 13,271 11,152
OPERATING EXPENSES:
Selling, General and Administration 7,190 6,705
Research and Development 1,116 964
------------ ------------
TOTAL OPERATING EXPENSES 8,306 7,669
OPERATING INCOME 4,965 3,483
Other (Income) Expense - net (68) 60
Litigation Settlement (475) --
Gain on Sale of Land (326) --
------------ ------------
TOTAL OTHER (INCOME) EXPENSE - NET (869) 60
PRETAX INCOME 5,834 3,423
INCOME TAX EXPENSE 2,082 1,096
------------ ------------
NET INCOME $ 3,752 $ 2,327
============ ============
EARNINGS PER COMMON SHARE:
Basic $ 0.27 $ 0.17
Diluted $ 0.25 $ 0.16
AVERAGE COMMON SHARES:
Basic 14,081,020 13,415,144
Diluted 14,936,476 14,511,719
BALANCE SHEET
03/31/03 12/31/02
------------ ------------
(Dollars In Thousands)
ASSETS
Cash $ 16,165 $ 9,684
Trade Receivables (Net) 16,189 15,248
Inventories 17,701 18,699
Other Current Assets 2,438 2,537
------------ ------------
Total Current Assets $ 52,493 $ $46,168
Property & Equipment (Net) 26,393 25,412
Other Assets 6,661 6,725
------------ ------------
TOTAL ASSETS $ 85,547 $ $78,305
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Total Current Liabilities $ $ 13,979 $ $11,586
Other Liabilities 3,197 3,304
Long-Term Debt 0 17
Stockholders' Equity 68,371 63,398
------------ ------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 85,547 $ $78,305
============ ============
7
CONFERENCE CALL
Merit Medical invites all interested parties to join its officers in
their quarterly earnings conference call to be held today, April 21,2003, at
5:00 p.m. Eastern Daylight Time, 4:00 p.m. Central, 3:00 p.m. Mountain, and 2:00
p.m. Pacific. The telephone numbers are: Domestic: 800-218-0713, and
International: 303-262-2075. A rebroadcast is available on the Internet by
accessing the CCBN logo under "Webcasts" at www.merit.com. The rebroadcast is
also available at www.ccbn.com. There is no other replay for the conference
call.
ABOUT MERIT
Founded in 1987, Merit Medical Systems is engaged in the development,
manufacture and distribution of proprietary disposable medical products used in
interventional and diagnostic procedures, particularly in cardiology and
radiology. The Company serves client hospitals worldwide with a domestic and
international sales force totaling approximately 70 individuals. Merit Medical
employs approximately 1,100 individuals worldwide, with manufacturing facilities
in South Jordan and Salt Lake City, Utah; Santa Clara, California; Angleton,
Texas; and Galway, Ireland. For more information about Merit Medical, visit
www.merit.com.
This document includes "Forward-Looking Statements" within the meaning
of Section 27A of the Securities Act of 1933, as amended and Section 21E of the
Securities Exchange Act of 1934, as amended. All statements other than
statements of historical fact are "Forward-Looking Statements" for purposes of
these provisions, including any projections of earnings, revenues or other
financial items, any statements of the plans and objectives of management for
future operations, any statements concerning proposed new products or services,
any statements regarding future economic conditions or performance, and any
statements of assumptions underlying any of the foregoing. All Forward-Looking
Statements included in this document are made as of the date hereof and are
based on information available to the Company as of such date. The Company
assumes no obligation to update any Forward-Looking Statement. In some cases,
Forward-Looking Statements can be identified by the use of terminology such as
"may," "will," "expects," "plans," "anticipates," "intends" or "believes,"
"estimates," "potential," or "continue," or the negative thereof or other
comparable terminology. Although the Company believes that the expectations
reflected in the Forward-Looking Statements contained herein are reasonable,
there can be no assurance that such expectations or any of the Forward-Looking
Statements will prove to be correct, and actual results could differ materially
from those projected or assumed in the Forward-Looking Statements. Future
financial condition and results of operations, as well as any Forward-Looking
Statements are subject to inherent risks and uncertainties, including market
acceptance of the Company's products, product introductions, potential product
recalls, delays in obtaining regulatory approvals, cost increases, fluctuations
in and obsolescence of inventory, price and product competition, availability of
labor and materials, development of new products and techniques that render the
Company's products obsolete, product liability claims, infringing technology,
inability to protect our proprietary technology, foreign currency fluctuations,
changes in health care markets related to health care reform initiatives and
other factors referred to in the Company's press releases and reports filed with
the Securities and Exchange Commission (the "SEC"). All subsequent
Forward-Looking Statements attributable to the Company or persons acting on its
behalf are expressly qualified in their entirety by these cautionary statements.
# # #
8