Merit Medical Posts Better-Than-Expected Q3 Earnings

Merit Medical Systems Inc. earned better-than-expected third-quarter earnings on higher sales.

The South Jordan, Utah-based company increased sales more than 20 percent to $115 million from $95.9 million in the prior year period ending Sept. 30. The company’s net income fell 22 percent to $5.6 million, in part due to a write-down on intangible assets from an acquisition. Revenues for the nine-month period were a record $329 million, compared with $292.1 million for the same period in 2012—an increase of 13 percent. Excluding that $4.3 million charge, the company would have earned $10.5 million, or 25 cents per share, up from $8.5 million, or 20 cents per share. Analysts had been expecting adjusted earnings per share of 13 cents on sales of $110.5 million.

In the third quarter of 2013, compared to the third quarter of 2012, catheter sales grew 17 percent; standalone device sales increased 15 percent; custom kit and tray sales rose 15 percent; Merit Endotek sales were up 14 percent; BioSphere sales increased 6 percent; and inflation device sales were down 4 percent. Excluding lower sales to an OEM customer, inflation device sales rose 0.5 percent.

President and CEO Fred P. Lampropoulos noted that the company is “working aggressively” to implement a plan to consolidate facilities and increase automation in both the production and documentation of procedures.

“We intend to continue these efforts throughout and beyond 2014 and we believe these efforts are some of the factors which will contribute to our goal of continued gross margin improvement,” said Lampropoulos. “We believe our pipeline of developed products … as well as the newly acquired products of Datascope Corp. and Radial Assist, will provide substantial sales momentum moving forward. All of our product groups and business segments improved in the third quarter compared to year-to-date results.”

Founded in 1987, Merit Medical manufactures disposable medical devices used in interventional and diagnostic procedures, particularly in cardiology, radiology and endoscopy.