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
Date of Report (date of earliest event reported): July 23, 2003
Commission File Number: 1-18592
Merit Medical Systems, Inc.
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(Exact Name of Registrant as Specified in its Charter)
Utah 87-0447695
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(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
1600 W. Merit Parkway
South Jordan, Utah 84095-2415
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(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code:
(801) 253-1600
N/A
(Former name, former address, and formal fiscal year, if changed
since last report)
Item 7. Financial Statements and Exhibits
(c) Exhibits
99.1 Press Release Issued by Merit Medical Systems, Inc., dated July 23, 2003,
titled "Merit Medical Reports Record Sales and Earnings, up 20% and 56%
Respectively, for the Second Quarter Ended June 30, 2003", together with related
Income Statements and Balance Sheets
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 instead being furnished
under this Item 9, "Regulation FD Disclosure." This information shall not be
deemed "filed" for purposes of Section 18 of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), or incorporated by reference in any
filing under the Securities Act of 1933, as amended, or the Exchange Act, except
as shall be expressly set forth by specific reference in such a filing.
On July 23, 2003, Merit Medical Systems, Inc. ("Merit") issued a press
release announcing financial results for the first quarter of 2003. The full
text of Merit's press release, and the related Income Statements and Balance
Sheets, are attached hereto as Exhibit 99.1.
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.
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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:
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Kent W. Stanger, Chief Financial Officer,
Secretary and Treasurer
July 23, 2003
EXHIBIT INDEX
EXHIBIT DESCRIPTION
NUMBER
99.1 Press Release Issued by Merit Medical Systems, Inc., dated July
23, 2003, titled "Merit Medical Reports Record Sales and
Earnings, up 20% and 56% Respectively, for the Second Quarter
Ended June 30, 2003", together with related Income Statements
and Balance Sheets
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Exhibit 99.1
MERIT MEDICAL
1600 West Merit Parkway o South Jordan, UT 84095
Telephone: 801-253-1600 o Fax: 801-253-1688
FOR IMMEDIATE RELEASE
Date: July 23, 2003
Contact: Kent W. Stanger, Chief Financial Officer
Phone: (801) 253-1600
E-Mail: kent@merit.com
Fax: (801) 253-1688
MERIT MEDICAL REPORTS RECORD SALES AND EARNINGS, UP 20% AND 56% RESPECTIVELY,
FOR THE SECOND QUARTER ENDED JUNE 30, 2003
SOUTH JORDAN, UTAH--Merit Medical Systems, Inc. (NASDAQ:NMS: MMSI) a
leading manufacturer and marketer of proprietary disposable products used
primarily in cardiology and radiology procedures, today reported record revenues
for the second quarter ended June 30, 2003 of $34.6 million, compared with $28.8
million for the same period in 2002, a gain of 20%. Net income for the second
quarter was a record $4.2 million, or $0.28 per share, compared with $2.7
million, or $0.18 per share, in last year's second quarter, a gain of 56%. The
2003 second quarter net earnings included $.01 per share from a gain on the sale
of land.
Revenues for the six-month period ending June 30, 2003 were $66.3
million, compared with $57.5 million for the comparable six-month period in
2002, a gain of 15%. Net income for the six-month period was $8.0 million, or
$0.53 per share, compared with $5.0 million, or $0.34 per share in the same
period of 2002, a gain of 58%.
Gains in revenues for the second quarter of 2003 compared with the
second quarter of 2002 resulted from across-the-board growth in sales of Merit's
medical devices, as follows: Stand-alone device sales grew by 26%; inflation
device sales rose 20%; custom kit sales increased 18%; and catheter sales rose
by 8%.
For the six-month period ended June 30, 2003 compared with the same
period in 2002, stand-alone device sales grew by 20%; inflation device sales
grew by 17%; custom kit sales rose 13%; and catheter sales increased 4%.
Fred P. Lampropoulos, Chairman and CEO of Merit, said, "We had an
extremely strong second quarter in terms of both sales and gross profit. Sales
rose throughout the Company's network of direct domestic and European sales
representatives, worldwide distributors and OEM sales to other customers.
"Sales of many of our products are continuing to benefit from group
purchasing contracts and OEM product sales, as well as continued focus on
bundling our innovative products for our market segment. In addition, strong
individual product sales such as our inflation devices, fluid management and
inflation kits, as well as our new guide wire, our One-Step(TM) centesis
catheter and centesis kit have made substantive contributions to top-line
growth.
"Our gross profit was 43.9% of sales for the second quarter compared
with 41.8% in the second quarter of 2002. Cost of sales grew by only 16%,
primarily due to lower labor and overhead costs per unit, as we increased our
manufacturing efficiencies. We are working on putting in place the means whereby
we believe we can cut about an additional $2 million per year out of the
manufacturing process beginning late this year and ramping into 2004," Mr.
Lampropoulos continued.
Selling, general and administrative expenses for the second quarter of
2003 were 22.1% of sales (a record low percentage), compared with 24.3% of sales
in the previous year's second quarter. Research and development
expenses during the second quarter of 2003 were 3.4% of sales, compared with
3.3% of sales in the second quarter of 2002. Income from operations was a record
18.4% of sales for the second quarter of 2003, versus 14.3% for the same quarter
last year.
For the six-month period ended June 30, 2003, selling, general and
administrative expenses were 22.4% of sales, compared with 23.8% for the first
six months in 2002. Research and development expenses were 3.5% of sales for the
second quarter of 2003, versus 3.3% for the same period of 2002.
Merit's effective tax rate for both the second quarter and six-month
periods rose to 36.4% and 36%, respectively, compared with 33.7% and 33% for
both of the 2002 comparable periods. The tax-rate increase was a direct result
of increased sales and income, placing Merit in a higher tax bracket, which also
diluted the positive effect from relatively fixed tax benefits.
Merit's cash position rose to $20.8 million as of June 30, 2003,
compared with $9.7 million as of December 31, 2002. Inventories declined to
$17.9 million as of June 30, 2003, compared with $18.7 million at the end of
2002.
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INCOME STATEMENT
3 Mos. Ended 6/30 6 Mos. Ended 6/30
2003 2002 2003 2002
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($ In Thousands Except Per Share Data)
Sales $ 34,577 $ 28,789 $ 66,319 $ 57,462
Cost of Sales 19,396 16,756 37,867 34,277
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Gross Profit 15,181 12,033 28,452 23,185
OPERATINGEXPENSES:
Selling, General and Administrative 7,651 6,984 14,840 13,690
Research and Development 1,178 945 2,295 1,908
------------ ------------ ------------ ------------
TOTAL OPERATING EXPENSES 8,829 7,929 17,135 15,598
OPERATING INCOME 6,352 4,104 11,317 7,587
Other (Income) Expense - Net (76) 26 (144) 86
Litigation Settlement Income 0 0 (475) 0
Gain on Sale of Land (182) 0 (508) 0
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TOTAL OTHER (INCOME)
EXPENSE - NET (258) 26 (1,127) 86
PRETAX INCOME 6,610 4,078 12,444 7,501
INCOME TAX EXPENSE 2,404 1,376 4,486 2,472
NET INCOME 4,206 2,702 7,958 5,029
EARNINGS PER SHARE:
Basic $ 0.30 $ 0.20 $ 0.56 $ 0.37
Diluted $ 0.28 $ 0.18 $ 0.53 $ 0.34
AVERAGE COMMON SHARES:
Basic 14,176,049 13,535,651 14,128,797 13,476,275
Diluted 15,028,756 14,750,259 14,982,878 14,631,076
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BALANCE SHEET
06/30/03 12/31/02
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($ In Thousands)
ASSETS
Cash $20,803 $ 9,684
Trade Receivables (Net) 17,565 15,248
Inventories 17,903 18,699
Other Current Assets 1,807 2,537
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Total Current Assets $58,078 $46,168
Property and Equipment (Net) 27,337 25,412
Other Assets 6,668 6,725
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TOTAL ASSETS $92,083 $78,305
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LIABILITIES AND STOCKHOLDERS' EQUITY
Total Current Liabilities $15,161 $11,586
Other Liabilities 3,181 3,304
Long-Term Debt 0 17
Stockholders' Equity 73,741 63,398
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $92,083 $78,305
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CONFERENCE CALL
Merit Medical Systems, Inc. invites all interested parties to join its
officers in their quarterly earnings conference call to be held today, July 23,
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 - 800-218-8862;
International - 303-205-0033.
ABOUT MERIT
Founded in 1987, Merit Medical Systems is a publicly-traded company
engaged in the development, manufacture and distribution of proprietary
disposable medical products used in interventional and diagnostic procedures,
primarily in cardiology and radiology. Merit serves client hospitals worldwide
with a domestic and international sales force totaling approximately 74
individuals. Merit employs approximately 1,200 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, visit www.merit.com.
Portions of this release contain "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995. All
statements other than statements of historical fact are "forward-looking
statements" for purposes of these provisions, including any projections of
earnings, revenues, expenses or other financial items, any statement 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 statement of assumptions underlying
any of the foregoing. All forward-looking statements included in this release
are made as of the date hereof and are based on information available to Merit
as of such date. Merit assumes no obligation to update any forward-looking
statement. In some cases, forward-looking statements can be identified by the
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Merit Medical Reports 20% Rise in Sales and 56% Rise in Net Income for 2Q '03 .
.. . July 23, 2003 Page 6
use of terminology such as"may," "will," "expects," "plans," "anticipates,"
"intends," "believes," "estimates," "potential," or "continue," or the negative
thereof or other comparable terminology. Although Merit 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 may
differ materially from those projected or assumed in the forward-looking
statements. Future financial conditions and results of operations, as well as
any forward-looking statements, are subject to inherent risks and uncertainties,
including, but not limited to, market acceptance of Merit's products; product
introductions; potential product recalls or product liability claims; delays in
obtaining regulatory approvals; cost increases; fluctuations in and obsolescence
of inventory; price and product competition; availability of labor, materials,
and transportation; development of new products and/or technologies that could
render Merit's products obsolete; infringing technology; inability to protect
Merit's proprietary technology; foreign currency fluctuations; changes in health
care markets related to health care reform initiatives; limited product
reimbursement; large portions of revenues derived from a few products and
procedures; inability to successfully manage growth; market price volatility
Merit's common stock; dependencies on key personnel; and other factors referred
to in Merit's press releases and filings with the Securities and Exchange
Commission, including Merit's Annual Report on Form 10-K for the year ended
December 31, 2002. Financial statements are subject to change and are not
intended to be relied upon as predictions of future operating results. All
subsequent forward-looking statements attributable to Merit or persons acting on
its behalf are expressly qualified in their entirety by these cautionary
statements.
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