Merit Medical Reports 17 Percent Rise in Sales for the Year Ended Dec. 31, 2000.Health & Medical Writers SOUTH JORDAN, Utah--(BW HealthWire)--Feb. 21, 2001 Merit Medical Systems Inc. (Nasdaq:NMS See NetWare Management System. : MMSI MMSI Maritime Mobile Service Identity MMSI Miniature Munitions/Store Interface MMSI Military Membership Status Identifier ) a manufacturer and marketer of proprietary disposable products Disposable products are items that are not intended by the manufacturer to be reused more than once or a few times as compared to more permanent serviceable and reusable items. Some products that have disposable versions are:
Medical specialty dealing with heart diseases and disorders. It began with the 1749 publication by Jean Baptiste de Sénac of contemporary knowledge of the heart. Diagnostic methods improved in the 19th century, and in 1905 the electrocardiograph was invented. and radiology radiology, branch of medicine specializing in the use of X rays, gamma rays, radioactive isotopes, and other forms of radiation in the diagnosis and treatment of disease. procedures, Wednesday reported record revenues of $91.45 million for the 12-month period ended Dec. 31, 2000, compared with $77.96 million for 1999, a gain of 17 percent. Net income for the year was $827,000, or $0.11 per share, compared with $3.23 million, or $0.43 per share in 1999. Revenues for the fourth quarter ended Dec. 31, 2000, were $22.48 million compared with $21.36 million in the fourth quarter of 1999, a gain of 5 percent. Net income for the 2000 fourth quarter was $547,000, or $0.07 per share, compared with $979,000, or $0.13 per share, in the 1999 fourth quarter. Areas contributing to revenue growth for 2000 were inflation devices, which grew by 7 percent; catheters, which grew by 174 percent; and stand-alone products, which grew by 24 percent. Sales of the company's custom kits declined by 3 percent, consistent with the company's strategy to place more emphasis on the other three product groups. For the fourth quarter, sales of the company's inflation devices grew by 12 percent; catheters declined by 1 percent; stand-alone devices grew by 10 percent; and custom kits declined by 4 percent compared to the fourth quarter of 1999. Fred P. Lampropoulos, chairman and chief executive officer of Merit, said, "While sales in the fourth quarter were slower than is customary, we are experiencing a strong rebound rebound (rē´bownd), n/v 1. a recovery from illness. n 2. an outbreak of fresh reflex activity after withdrawal of a stimulus rebound adjective thus far in 2001. January was a record month and this month is on pace to become a record February. "We have made considerable progress in the last half of 2000 in changing the structure of Merit. Specifically, in December 1999 our headcount was 1,270. As of Dec. 31, 2000 that number had declined by 19 percent to 1,030. This decline, due mostly to attrition Attrition The reduction in staff and employees in a company through normal means, such as retirement and resignation. This is natural in any business and industry. Notes: , is especially significant considering the 17 percent sales growth we experienced. "In 2000, existing product inventories declined by approximately $3.6 million and new product inventories increased by about $1.3 million, resulting in a net reduction of $2.3 million. In the fourth quarter alone, total inventories declined by about $1.3 million. Conjunctively con·junc·tive adj. 1. Joining; connective. 2. Joined together; combined: the conjunctive focus of political opposition. 3. Grammar a. , inventory turns have begun to increase. In 1999 they turned 2.1 times and in 2000 inventory turned 2.3 times. "Our goal this year is to increase inventory turns to 2.7," Lampropoulos continued. Gross margins were 33.5 percent in 2000 compared with 38.5 percent in 1999, primarily due to two reasons. The largest contributor was the negative impact of manufacturing variances and the associated effects of higher costs per unit that began late in 1999, which continued to work their way through the inventory sales cycle. With the lowering of inventory, the purposeful pur·pose·ful adj. 1. Having a purpose; intentional: a purposeful musician. 2. Having or manifesting purpose; determined: entered the room with a purposeful look. reduction of headcount and other efficiencies achieved through the year and planned for 2001, the manufacturing variances will lessen less·en v. less·ened, less·en·ing, less·ens v.tr. 1. To make less; reduce. 2. Archaic To make little of; belittle. v.intr. To become less; decrease. going forward. The second contributor to lower margins was the impact of the Euro decline against the dollar. Had the currency stayed the same in 2000 as in 1999, Merit would have realized $1.08 million more in gross profit. In the fourth quarter, the Euro hit its all-time low, and gross profit dropped an additional $371,000 from the fourth quarter of 1999. Total operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. for the year declined as a percent of sales to 30.1 percent from 30.8 percent in 1999, while in the fourth quarter they declined to 28.7 percent of sales from 30.3 percent in the 1999 fourth quarter. In addition, the quarterly operating costs operating costs npl → gastos mpl operacionales were actually slightly lower in real dollars than in 1999. Selling, general and administrative costs administrative costs, n.pl the overhead expenses incurred in the operation of a dental benefits program, excluding costs of dental services provided. declined to 25.5 percent of sales for the year compared with 26.2 percent in 1999, and for the quarter declined to 24.6 percent of sales compared with 25.9 percent in the prior year's period. Research and development costs were 4.2 percent of sales for the year compared with 4.6 percent in 1999, and for the quarter were 3.8 percent of sales compared with 4.4 percent in the same period in 1999. The company's income-tax rate declined from 30.6 percent in 1999 to a negative 6.8 percent in 2000 due to additional research and development credits realized. The income-tax rate will rise to a very favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. rate of approximately 25 percent in 2001, due to continuing research and development credits and other tax-saving measures. The company also noted that its strategy to reduce long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. would result in reduced business risk, increased available capital for growth and a reduction of interest costs. The company has made considerable progress in this regard in 2000, and particularly in the fourth quarter. As of Dec. 31, 2000, the company had reduced its long-term debt to $24 million from $31 million in August 2000. Since the beginning of 2001, long-term debt has been reduced by an additional $2.1 million. Founded in 1987, Merit Medical Systems develops, manufactures and distributes 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 65 individuals. Merit Medical employs approximately 1,030 individuals worldwide, with manufacturing facilities in South Jordan and Salt Lake City; Santa Clara Santa Clara, city, Cuba Santa Clara (sän`tä klä`rä), city (1994 est. pop. 217,000), capital of Villa Clara prov., central Cuba. , Calif.; Angleton, Texas
Angleton is the county seatGR6 of Brazoria County in the U.S. ; and Galway, Ireland.
3 Mos. Ended 12/31 12 Mos. Ended 12/31
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2000 1999 2000 1999
---- ---- ---- ----
(In Thousands Except Share Data)
REVENUES $22,484 $21,358 $91,448 $77,960
COST OF SALES 15,069 13,122 60,824 47,918
GROSS PROFIT 7,415 8,236 30,624 30,042
OPERATING EXPENSES:
Selling, General and
Administration 5,534 5,535 23,300 20,407
Research and Development 860 938 3,864 3,618
Severance 54 331
TOTAL OPERATING EXPENSES 6,448 6,473 27,495 24,025
OPERATING INCOME 967 1,763 3,129 6,017
OTHER EXPENSE - NET 593 495 2,355 1,255
PRETAX INCOME 374 1,268 774 4,762
INCOME TAX EXPENSE (Credit) (173) 289 (53) 1,455
MINORITY INTEREST IN (INCOME)
OF SUBSIDIARY (81)
NET INCOME 547 979 827 3,226
EARNINGS PER COMMON SHARE-
Basic and Diluted: $0.07 $0.13 $0.11 $0.43
AVERAGE COMMON SHARES-
Basic: 7,775,292 7,572,477 7,729,294 7,541,562
Diluted: 7,882,782 7,658,566 7,860,905 7,565,673
Merit Medical invites all interested parties to join its officers in their quarterly earnings conference call and 2001 update to be held Wednesday, Feb. 21, 2001, at 4 p.m. Eastern Time, 3 p.m. Central, 2 p.m. Mountain, and 1 p.m. Pacific. During the conference call, the results of operations for the year and quarter ended Dec. 31, 2000 will be discussed in more detail, together with the company's expectations and trends that may affect its future results. The telephone numbers are: Domestic: 888/273-9885, and International: 612/332-0335. A rebroadcast is available through March 7 on the Internet by accessing the StreetFusion logo at www.merit.com or at www.streetfusion.com. Statements contained in this release which are not purely historical are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995 and are subject to risks and uncertainties such as those described in the company's Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended Dec. 31, 1999 and quarterly reports on Form 10-Q Form 10-Q See 10-Q. since that date. Such risks and uncertainties include the company's ability to successfully manage its manufacturing and inventory costs, the impact of changes in foreign currency exchange rates, particularly with respect to the Euro, the ability of the company to increase its inventory turn rate without creating difficulties in product delivery times, and the ability of the company to maintain increased efficiency and provide adequate customer service with its reduced staff. Actual results may differ materially from anticipated results. |
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