Merit Medical Reports Results for Fourth Quarter and Year Ended December 31, 2017; Merit Meets Range of 2017 Guidance; Gives 2018 Guidance

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| Source: Merit Medical Systems, Inc.
  • Q4 2017 worldwide revenue of $190.9 million ($188.2 million on a comparable, constant currency* basis), up 21.0% as reported (up 19.3% on a comparable, constant currency* basis) over Q4 2016
  • FY 2017 worldwide revenue of $727.9 million ($727.3 million on a comparable, constant currency* basis), up 20.5% as reported (up 20.4% on a comparable, constant currency* basis) over FY 2016
  • Q4 2017 core revenue* up 9.4% over Q4 2016 core revenue* (core revenue* up 7.9% on a comparable, constant currency* basis); FY 2017 core revenue* up 8.8% over core revenue* for FY 2016 (core revenue* up 8.7% on a comparable, constant currency* basis)
  • Q4 2017 GAAP EPS was $0.13, compared to $0.17 in Q4 2016; Q4 2017 non-GAAP EPS* was $0.33, compared to $0.31 in Q4 2016
  • Q4 2017 GAAP gross margin was 44.9%, compared to 44.5% in Q4 2016; Q4 2017 non-GAAP gross margin* was 47.9%, compared to 48.4% for Q4 2016

* Constant currency revenue, core revenue, core revenue on a constant currency basis, non-GAAP EPS, non-GAAP gross margin and non-GAAP net income (referenced on the following page) are non-GAAP financial measures. A reconciliation of these and other non-GAAP financial measures used in this release to their most directly comparable GAAP financial measure is included under the heading “Non-GAAP Financial Measures” below.

SOUTH JORDAN, Utah, Feb. 28, 2018 (GLOBE NEWSWIRE) -- Merit Medical Systems, Inc. (NASDAQ:MMSI), a leading manufacturer and marketer of proprietary disposable devices used in interventional, diagnostic and therapeutic procedures, particularly in cardiology, radiology, oncology, critical care and endoscopy, today announced revenue of $190.9 million for the quarter ended December 31, 2017, an increase of 21.0% over revenue of $157.7 million for the quarter ended December 31, 2016. On a comparable, constant currency basis, revenue for the fourth quarter of 2017 would have been up 19.3% over revenue for the comparable quarter of 2016. For the year ended December 31, 2017, revenue was $727.9 million, up 20.5% compared to revenue of $603.8 million for the year ended December 31, 2016. On a comparable, constant currency basis, revenue for the year ended December 31, 2017 would have been up 20.4% over revenue for the comparable period of 2016.

Merit’s GAAP net income for the fourth quarter of 2017 was $6.8 million, or $0.13 per share, compared to $7.5 million, or $0.17 per share, for the fourth quarter of 2016. Merit’s non-GAAP net income* for the quarter ended December 31, 2017 was $16.8 million, or $0.33 per share, compared to $13.8 million, or $0.31 per share, for the quarter ended December 31, 2016.

Merit’s GAAP net income for the year ended December 31, 2017 was $27.5 million, or $0.55 per share, compared to $20.1 million, or $0.45 per share, for the year ended December 31, 2016. Merit’s non-GAAP net income for the year ended December 31, 2017 was $64.3 million, or $1.28 per share, compared to $45.1 million, or $1.01 per share, for the year ended December 31, 2016.

Merit’s revenue by category for the three and twelve-month periods ended December 31, 2017, compared to the corresponding periods in 2016, was as follows:

        
   Three Months Ended   Twelve Months Ended
   December 31,   December 31,
 % Change 2017 2016 % Change 2017 2016
Cardiovascular           
Stand-alone devices40.0% $71,997  $51,419  44.1% $275,431  $191,148 
Custom kits and procedure trays16.4% 35,007  30,062  5.8% 126,114  119,226 
Inflation devices7.3% 20,546  19,142  8.1% 79,875  73,916 
Catheters14.0% 33,390  29,289  12.7% 127,747  113,367 
Embolization devices4.1% 12,596  12,098  7.6% 49,532  46,035 
CRM/EP3.8% 9,936  9,570  15.0% 41,914  36,459 
Total21.0% 183,472  151,580  20.8% 700,613  580,151 
            
Endoscopy           
Endoscopy devices21.0% 7,425  6,135  15.0% 27,239  23,687 
            
Total21.0% $190,897  $157,715  20.5% $727,852  $603,838 
 

Note: Certain revenue categories for 2016 have been adjusted from prior disclosure to reflect changes in product classifications to be consistent with updates in the management of Merit's product portfolios in 2017.

“We have now closed the final year of our initial three-year plan,” said Fred P. Lampropoulos, Merit’s Chairman and Chief Executive Officer. “We believe that much has been accomplished and that the structure and programs are in place to reach our previously disclosed goals related to core growth, gross margin improvement, and profitability.”

“I have recently returned from Japan and witnessed our consolidation of businesses and look forward to substantial sales growth there as our business builds more direct presence,” Lampropoulos said.

“Over the next several months we intend to transition the product lines we recently purchased from Becton, Dickinson and Company (BD) to our facilities in Tijuana,” Lampropoulos said. “As a reminder, we expect transition expenses during this period to affect our earnings over the next six to nine months as customer service, manufacturing, product fulfillment, IT, regulatory, and other costs associated with our movement to a fully controlled and manufactured business is completed. Our 2018 guidance includes these expenses. To put this simply, there will be some irregular quarters as we go through this process, but once again, I must reiterate that our team is in place and transfer activities, including movement of accounts and direct interface with customers and national accounts, are well underway. Equally important, we plan to introduce new biopsy products and services, which we believe will give Merit a competitive advantage.”

“Our overall pipeline is robust with new drainage products, inflation devices, vascular access products, endoscopy balloons, and stents,” Lampropoulos said. “We also have many other products and programs in place which we believe will support our organic growth for years to come.”

“We believe the substantial investments of the past, along with a long-term vision of the future, continued discipline, and a keen eye on the present will continue to present a substantial opportunity for stakeholders and value for our shareholders,” Lampropoulos said.

2018 Guidance
Based upon information currently available to Merit's management, Merit estimates that for the year ending December 31, 2018, absent material acquisitions or non-recurring transactions, Merit's revenues will be in the range of $838 - $851 million, an increase of approximately 15-17%, compared to revenues of $727.9 million for the year ended December 31, 2017. Also, based on information currently available to Merit's management, Merit estimates that, absent material acquisitions or non-recurring transactions, Merit's GAAP earnings per share for 2018 will be in the range of $0.77 - $0.85, GAAP gross margin will be in the range of 45.6% - 46.5%, non-GAAP earnings per share will be in the range of $1.57 - $1.69, and non-GAAP gross margin will be in the range of 49.7% - 50.8%. Merit’s financial guidance for the year ending December 31, 2018 is subject to risks and uncertainties, including, but not limited to, potential accounting adjustments attributable to Merit’s ongoing valuation of intangibles and other financial assets acquired from BD, as well as risks and uncertainties identified in Merit’s public filings.

CONFERENCE CALL
Merit will hold its investor conference call (conference ID 2978169) today, Wednesday, February 28, 2018, at 5:00 p.m. Eastern (4:00 p.m. Central, 3:00 p.m. Mountain, and 2:00 p.m. Pacific). The domestic telephone number is (844) 578-9672 and the international number is (508) 637-5656. A live webcast and slide deck will also be available at merit.com.


    
CONSOLIDATED BALANCE SHEETS   
(In thousands)   
 December 31, December 31,
 2017 2016
 (Unaudited)  
ASSETS   
Current Assets   
Cash and cash equivalents$32,336  $19,171 
Trade receivables, net105,536  80,521 
Other receivables9,429  5,643 
Inventories155,288  120,695 
Prepaid expenses and other assets9,096  6,226 
Prepaid income taxes3,225  2,525 
Deferred income tax assets  8,219 
Income tax refunds receivable1,211  423 
Total Current Assets316,121  243,423 
    
Property and equipment, net292,820  276,573 
Intangibles, net227,324  182,697 
Goodwill238,147  211,927 
Deferred income tax assets2,359  171 
Other assets35,040  28,012 
Total Assets$1,111,811  $942,803 
    
LIABILITIES AND STOCKHOLDERS' EQUITY   
Current Liabilities   
Trade payables$34,931  $30,619 
Accrued expenses58,932  45,519 
Current portion of long-term debt19,459  10,000 
Income taxes payable2,298  2,193 
Total Current Liabilities115,620  88,331 
    
Deferred income tax liabilities23,289  25,981 
Liabilities related to unrecognized tax benefits2,746  438 
Deferred compensation payable11,181  9,211 
Deferred credits2,403  2,550 
Long-term debt259,013  314,373 
Long-term income taxes payable4,846   
Other long-term obligations16,379  3,730 
Total Liabilities435,477  444,614 
    
Stockholders' Equity   
Common stock353,392  206,186 
Retained earnings321,408  293,885 
Accumulated other comprehensive income (loss)1,534  (1,882)
Total stockholders' equity676,334  498,189 
Total Liabilities and Stockholders' Equity$1,111,811  $942,803 
    


        
CONSOLIDATED STATEMENTS OF INCOME       
(Unaudited, in thousands except per share amounts)      
 Three Months Ended Year Ended
 December 31, December 31,
 2017 2016 2017 2016
        
SALES$190,897  $157,715  $727,852  $603,838 
        
COST OF SALES105,241  87,460  401,599  338,813 
        
GROSS PROFIT85,656  70,255  326,253  265,025 
        
OPERATING EXPENSES       
Selling, general and administrative59,239  45,839  229,134  184,398 
Research and development12,727  11,792  51,403  45,229 
Acquired in-process research and development  61  12,136  461 
Intangible asset impairment charge809    809   
Contingent consideration expense (benefit)(338) (38) (298) 61 
Total72,437  57,654  293,184  230,149 
        
INCOME FROM OPERATIONS13,219  12,601  33,069  34,876 
        
OTHER INCOME (EXPENSE)       
Interest income115  26  381  81 
Interest expense(1,801) (2,678) (7,736) (8,798)
Gain on bargain purchase243    11,039   
Other income (expense) - net(496) (327) (872) (773)
Total other income (expense) - net(1,939) (2,979) 2,812  (9,490)
        
INCOME BEFORE INCOME TAXES11,280  9,622  35,881  25,386 
        
INCOME TAX EXPENSE4,474  2,116  8,358  5,265 
        
NET INCOME$6,806  $7,506  $27,523  $20,121 
        
EARNINGS PER COMMON SHARE:       
Basic$0.14  $0.17  $0.56  $0.45 
        
Diluted$0.13  $0.17  $0.55  $0.45 
        
AVERAGE COMMON SHARES:       
Basic50,208  44,601  48,805  44,408 
        
Diluted51,722  45,165  50,101  44,862 
 


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 referred to in this release provide investors with useful information regarding the underlying business trends and performance of Merit’s ongoing operations and can be useful for period-over-period comparisons of such operations. Non-GAAP financial measures used in this release include:

  • constant currency revenue;
  • core revenue;
  • core revenue on a constant currency basis;
  • non-GAAP gross margin
  • non-GAAP net income; and
  • non-GAAP earnings per share;

Merit’s management team uses these non-GAAP financial measures to evaluate Merit’s profitability and efficiency, to compare operating results to prior periods, to evaluate changes in the operating results of its operating segments, and to measure and allocate financial resources internally. However, Merit’s management does not consider such non-GAAP measures in isolation or as an alternative to such measures determined in accordance with GAAP.

Readers should consider non-GAAP measures used in this release in addition to, not as a substitute for, financial reporting measures prepared in accordance with GAAP. These non-GAAP financial measures generally exclude some, but not all, items that may affect Merit's net income. In addition, they are subject to inherent limitations as they reflect the exercise of judgment by management about which items are excluded. Merit believes it is useful to exclude such items in the calculation of non-GAAP earnings per share, non-GAAP gross margin and non-GAAP net income (in each case, as further illustrated in the reconciliation table below) because such amounts in any specific period may not directly correlate to the underlying performance of Merit’s business operations and can vary significantly between periods as a result of factors such as new acquisitions, non-cash expenses related to amortization of previously acquired tangible and intangible assets, unusual compensation expenses or expenses resulting from litigation, governmental proceedings or changes in tax regulations. Merit may incur similar types of expenses in the future, and the non-GAAP financial information included in this release should not be viewed as a statement or indication that these types of expenses will not recur. Additionally, the non-GAAP financial measures used in this release may not be comparable with similarly titled measures of other companies. Merit urges investors and potential investors to review the reconciliations of its non-GAAP financial measures to the comparable GAAP financial measures, and not to rely on any single financial measure to evaluate Merit’s business or results of operations.

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 other than the U.S. dollar at the applicable foreign exchange rates in effect during the comparable prior-year period. The constant currency revenue adjustments of $(2.7) million and $(0.6) million for the three and twelve-month periods ended December 31, 2017, respectively, were calculated using the applicable average foreign exchange rates for the three and twelve-month periods ended December 31, 2016, respectively.

Core Revenue and Core Revenue on a Constant Currency Basis
Merit’s core revenue is defined as reported revenue excluding revenues from the acquisitions of the HeRO® Graft (excluded January 2017 only) in February 2016, DFINE, Inc. (excluded through June 2017) in July 2016, Catheter Connections, Inc. and the critical care division of Argon Medical Devices, Inc. in January 2017, Osseon LLC in July 2017, Laurane Medical S.A.S. in August 2017 and ITL Healthcare Pty. Ltd. in October 2017. Core revenue on a constant currency basis is defined as core revenue plus the foreign exchange impact related to those core sales, using the applicable foreign exchange rates in effect for the comparable prior-year periods presented.

Non-GAAP Gross Margin
Non-GAAP gross margin is calculated by reducing GAAP cost of sales by amounts recorded for amortization of intangible assets, inventory mark-up related to acquisitions and severance.

Non-GAAP Net Income
Non-GAAP net income is calculated by adjusting GAAP net income for certain items which are deemed by Merit’s management to be outside of core operations and vary in amount and frequency among periods, such as expenses related to new acquisitions, non-cash expenses related to amortization of previously acquired tangible and intangible assets, unusual compensation expenses or expenses resulting from litigation, governmental proceedings or changes in tax regulations, as well as other items set forth in the table below.

Non-GAAP EPS
Non-GAAP EPS is defined as non-GAAP net income divided by the diluted shares outstanding for the corresponding period.

Other Non-GAAP Financial Measure Reconciliation
The following table sets forth supplemental financial data and corresponding reconciliations of non-GAAP net income and non-GAAP earnings per share to Merit’s net income and earnings per share prepared in accordance with GAAP for the three and twelve-month periods ended December 31, 2017 and 2016. The non-GAAP income adjustments referenced in the following table do not reflect stock-based compensation expense of approximately $1.2 million and $0.6 million for the three-month periods ended December 31, 2017 and 2016, respectively, and approximately $4.1 million and $2.5 million for the twelve-month periods ended December 31, 2017 and 2016, respectively.


    
Reconciliation of GAAP Net Income to Non-GAAP Net Income   
(Unaudited, in thousands except per share amounts)    
 Three Months Ended
 December 31, 2017
 Pre-TaxTax Impact (a)After-TaxPer Share Impact
GAAP net income$11,280  $(4,474) $6,806  $0.13 
     
Non-GAAP adjustments:    
Cost of Sales    
Amortization of intangibles5,490  (1,848) 3,642  0.07 
Inventory mark-up related to acquisitions279  (39) 240   
Operating Expenses    
Severance446  (171) 275  0.01 
Acquisition-related (b)1,593  (532) 1,061  0.02 
Fair value adjustment to contingent consideration (c)(338) 131  (207)  
Long-term asset impairment charge (d)93  (36) 57   
Intangible asset impairment charge (e)809    809  0.02 
Amortization of intangibles1,908  (703) 1,205  0.02 
Special legal expense (f)2,001  (779) 1,222  0.02 
Other (Income) Expense    
Gain on bargain purchase (g)(243)   (243)  
Amortization of long-term debt issuance costs171  (67) 104   
Tax expense related to tax reform (h)  1,855  1,855  0.04 
     
Non-GAAP net income$23,489  $(6,663) $16,826  $0.33 
     
Diluted shares   51,722 
     
 Three Months Ended
 December 31, 2016
 Pre-TaxTax Impact (a)After-TaxPer Share Impact
GAAP net income$9,622  $(2,116) $7,506  $0.17 
     
Non-GAAP adjustments:    
Cost of Sales    
Amortization of intangibles4,434  (1,653) 2,781  0.06 
Inventory mark-up related to acquisitions1,581  (615) 966  0.02 
Operating Expenses    
Severance848  (330) 518  0.01 
Acquisition-related (b)753  (266) 487  0.01 
Fair value adjustment to contingent consideration (c)(38) 15  (23)  
Long-term asset impairment charge (d)13  (5) 8   
Acquired in-process research and development61  (24) 37   
Amortization of intangibles1,298  (499) 799  0.02 
Special legal expense (f)1,016  (395) 621  0.01 
Other (Income) Expense    
Amortization of long-term debt issuance costs172  (67) 105   
     
Non-GAAP net income$19,760  $(5,955) $13,805  $0.31 
     
Diluted shares   45,165 
      


    
Reconciliation of GAAP Net Income to Non-GAAP Net Income   
(Unaudited, in thousands except per share amounts)    
 Year Ended
 December 31, 2017
 Pre-TaxTax Impact (a)After-TaxPer Share Impact
GAAP net income$35,881  $(8,358) $27,523  $0.55 
            
Non-GAAP adjustments:           
Cost of Sales           
Amortization of intangibles20,705  (7,550) 13,155  0.26 
Inventory mark-up related to acquisitions3,400  (1,253) 2,147  0.04 
Operating expenses    
Severance2,185  (847) 1,338  0.03 
Acquisition-related (b)6,648  (2,048) 4,600  0.09 
Fair value adjustment to contingent consideration (c)(298) 116  (182)  
Long-term asset impairment charge (d)179  (70) 109   
Acquired in-process research and development12,136  (97) 12,039  0.24 
Intangible asset impairment charge (e)809    809  0.02 
Amortization of intangibles6,111  (2,324) 3,787  0.07 
Special legal expense (f)12,616  (4,908) 7,708  0.15 
Other (Income) Expense    
Gain on bargain purchase (g)(11,039)   (11,039) (0.22)
Amortization of long-term debt issuance costs685  (267) 418  0.01 
Tax expense related to tax reform (h)  1,855  1,855  0.04 
     
Non-GAAP net income$90,018  $(25,751) $64,267  $1.28 
     
Diluted shares   50,101 
     
  
 Year Ended
 December 31, 2016
 Pre-TaxTax Impact (a)After-TaxPer Share Impact
GAAP net income$25,386  $(5,265) $20,121  $0.45 
                
Non-GAAP adjustments:           
Cost of Sales           
Amortization of intangibles15,122  (5,592) 9,530  0.21 
Inventory mark-up related to acquisitions2,990  (1,163) 1,827  0.04 
Severance56  (22) 34   
Operating Expenses    
Severance10,271  (3,878) 6,393  0.14 
Acquisition-related (b)4,503  (1,448) 3,055  0.07 
Fair value adjustment to contingent consideration (c)61  (24) 37   
Long-term asset impairment charge (d)100  (38) 62   
Acquired in-process research and development461  (179) 282  0.01 
Amortization of intangibles4,167  (1,595) 2,572  0.06 
Special legal expense (f)1,016  (395) 621  0.01 
Other (Income) Expense    
Amortization of long-term debt issuance costs952  (370) 582  0.01 
     
Non-GAAP net income$65,085  $(19,969) $45,116  $1.01 
     
Diluted shares   44,862 
  1. Reflects the tax effect associated with pre-tax income and the non-GAAP adjustments
  2. Represents costs related to acquisitions
  3. Represents changes in the fair value of contingent consideration liabilities and contingent receivables as a result of acquisitions
  4. Represents abandoned patents
  5. Represents impairment charges of certain intangible assets
  6. Costs incurred in responding to an inquiry from the U.S. Department of Justice
  7. Represents the gain on bargain purchase realized from the acquisition of the critical care division of Argon Medical Devices, Inc.
  8. Tax expense recorded as our estimated one-time net income tax charge resulting from the enactment of the Tax Cuts and Jobs Act


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)       
      
  Three Months Ended   Year Ended 
  December 31,   December 31, 
 % Change2017 2016  % Change2017 2016 
Reported Revenue21.0%$190,897 $157,715  20.5%$727,852 $603,838 
        
Add: Impact of foreign exchange (a) (2,697)   (558) 
        
Constant Currency Revenue19.3%$188,200 $157,715  20.4%$727,294 $603,838 
        
      
  Three Months Ended   Year Ended 
  December 31,   December 31, 
 % Change2017 2016  % Change2017 2016 
Reported Revenue21.0%$190,897 $157,715  20.5%$727,852 $603,838 
        
Less: Revenue from certain acquisitions (b) (18,432)   (71,018) 
        
Core Revenue9.4%$172,465 $157,715  8.8%$656,834 $603,838 
        
Add: Impact of foreign exchange on core
revenue (a)
 (2,303)   (626) 
        
Core Revenue on a Constant Currency
Basis
7.9%$170,162 $157,715  8.7%$656,208 $603,838 
 

(a) The constant currency revenue adjustments of $(2.7) million and $(0.6) million to reported revenue, as well as the constant currency adjustments of $(2.3) million and $(0.6) million to core revenue, for the three and twelve-month periods ended December 31, 2017, respectively, were calculated using the applicable average foreign exchange rates for the three and twelve-month periods ended December 31, 2016, respectively.

(b) Represents revenue from the acquisitions of the HeRO Graft in February 2016 (excluding January 2017 revenue); DFINE, Inc. (excluding revenue through June 2017) in July 2016; the assets of Catheter Connections, Inc. in January 2017; the critical care division of Argon Medical Devices, Inc. in January 2017; Osseon LLC in July 2017; Laurane Medical S.A.S. in August 2017; and ITL Healthcare Pty. Ltd. in October 2017.


  
Reconciliation of Reported Gross Margin to Non-GAAP Gross Margin (Non-GAAP) 
(Unaudited, as a percentage of reported revenue)    
      
 Three months ended Twelve months ended
 December 31, December 31,
 20172016 20172016
Reported Gross Margin    44.9%    44.5%     44.8%    43.9%
      
Add back impact of:     
Amortization of intangibles2.9%2.9% 2.8%2.5%
Inventory mark-up related to acquisitions0.1%1.0% 0.5%0.5%
Severance%% %0.0%
      
Non-GAAP Gross Margin47.9%48.4% 48.1%46.9%
 


ABOUT MERIT
Founded in 1987, Merit Medical Systems, Inc. is engaged in the development, manufacture and distribution of proprietary disposable medical devices used in interventional, diagnostic and therapeutic procedures, particularly in cardiology, radiology, oncology, critical care and endoscopy. Merit serves client hospitals worldwide with a domestic and international sales force totaling approximately 290 individuals. Merit employs approximately 5,000 people worldwide with facilities in South Jordan, Utah; Pearland, Texas; Richmond, Virginia; Malvern, Pennsylvania; Rockland, Massachusetts; San Jose, California; Maastricht and Venlo, The Netherlands; Paris, France; Galway, Ireland; Beijing, China; Tijuana, Mexico; Joinville, Brazil; Markham, Ontario, Canada; Melbourne, Australia; Tokyo, Japan; and Singapore.

FORWARD-LOOKING STATEMENTS
Statements contained in this release which are not purely historical, including, without limitation, statements regarding Merit's forecasted plans, revenues, net income, financial results or anticipated or completed acquisitions, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and are subject to risks and uncertainties such as those described in Merit's Annual Report on Form 10-K for the year ended December 31, 2016 and subsequent filings with the Securities and Exchange Commission. Such risks and uncertainties include risks relating to Merit's potential inability to successfully manage growth through acquisitions, including the inability to commercialize technology acquired through completed, proposed or future transactions; expenditures relating to research, development, testing and regulatory approval or clearance of Merit's products and risks that such products may not be developed successfully or approved for commercial use; governmental scrutiny and regulation of the medical device industry, including governmental inquiries, investigations and proceedings involving Merit; reforms to the 510(k) process administered by the U.S. Food and Drug Administration; restrictions on Merit's liquidity or business operations resulting from its debt agreements; infringement of Merit's technology or the assertion that Merit's technology infringes the rights of other parties; product recalls and product liability claims; the potential of fines, penalties or other adverse consequences if Merit's employees or agents violate the U.S. Foreign Corrupt Practices Act or other laws or regulations; laws and regulations targeting fraud and abuse in the healthcare industry; potential for significant adverse changes in governing regulations; changes in tax laws and regulations in the United States or other countries; increases in the prices of commodity components; negative changes in economic and industry conditions in the United States or other countries; termination or interruption of relationships with Merit's suppliers, or failure of such suppliers to perform; fluctuations in exchange rates; concentration of a substantial portion of Merit's revenues among a few products and procedures; development of new products and technology that could render Merit's existing products obsolete; market acceptance of new products; volatility in the market price of Merit's common stock; modification or limitation of governmental or private insurance reimbursement policies; changes in healthcare policies or markets related to healthcare reform initiatives; failure to comply with applicable environmental laws; changes in key personnel; work stoppage or transportation risks; introduction of products in a timely fashion; price and product competition; availability of labor and materials; fluctuations in and obsolescence of inventory; and other factors referred to in Merit's Annual Report on Form 10-K for the year ended December 31, 2016 and other materials filed with the Securities and Exchange Commission. All subsequent forward-looking statements attributable to Merit or persons acting on its behalf are expressly qualified in their entirety by these cautionary statements. Actual results will likely differ, and may differ materially, from anticipated results. Financial estimates are subject to change and are not intended to be relied upon as predictions of future operating results, and Merit assumes no obligation to update or disclose revisions to those estimates.

TRADEMARKS
Unless noted otherwise, trademarks and registered trademarks used in this release are the property of Merit Medical Systems, Inc., in the United States and other jurisdictions.

Contact:         Anne-Marie Wright, Vice President, Corporate Communications
Phone:            (801) 208-4167  e-mail: awright@merit.com  Fax: (801) 253-1688