10-Q 1 mmsi-20220930x10q.htm 10-Q
http://fasb.org/us-gaap/2022#OtherNonoperatingIncomeExpensehttp://fasb.org/us-gaap/2022#OtherNonoperatingIncomeExpensehttp://fasb.org/us-gaap/2022#OtherNonoperatingIncomeExpensehttp://www.merit.com/20220930#BusinessCombinationContingentConsiderationArrangementsContingentConsiderationBenefithttp://www.merit.com/20220930#BusinessCombinationContingentConsiderationArrangementsContingentConsiderationBenefithttp://www.merit.com/20220930#BusinessCombinationContingentConsiderationArrangementsContingentConsiderationBenefit0000856982--12-312022Q3falseMERIT MEDICAL SYSTEMS INC5691800056570000http://fasb.org/us-gaap/2022#PrepaidExpenseAndOtherAssetsCurrentP2Yhttp://fasb.org/us-gaap/2022#AssetImpairmentChargeshttp://fasb.org/us-gaap/2022#AssetImpairmentChargeshttp://fasb.org/us-gaap/2022#OtherNonoperatingIncomeExpensehttp://www.merit.com/20220930#BusinessCombinationContingentConsiderationArrangementsContingentConsiderationBenefithttp://fasb.org/us-gaap/2022#AssetImpairmentCharges0000856982us-gaap:RetainedEarningsMember2022-09-300000856982us-gaap:AccumulatedTranslationAdjustmentMember2022-09-300000856982us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-09-300000856982us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2022-09-300000856982us-gaap:RetainedEarningsMember2022-06-300000856982us-gaap:AccumulatedTranslationAdjustmentMember2022-06-300000856982us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-06-300000856982us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2022-06-300000856982us-gaap:RetainedEarningsMember2022-03-310000856982us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-03-3100008569822022-03-310000856982us-gaap:RetainedEarningsMember2021-12-310000856982us-gaap:AccumulatedTranslationAdjustmentMember2021-12-310000856982us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-12-310000856982us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2021-12-310000856982us-gaap:RetainedEarningsMember2021-09-300000856982us-gaap:AccumulatedTranslationAdjustmentMember2021-09-300000856982us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-09-300000856982us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2021-09-300000856982us-gaap:RetainedEarningsMember2021-06-300000856982us-gaap:AccumulatedTranslationAdjustmentMember2021-06-300000856982us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-06-300000856982us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2021-06-300000856982us-gaap:RetainedEarningsMember2021-03-310000856982us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-03-3100008569822021-03-310000856982us-gaap:RetainedEarningsMember2020-12-310000856982us-gaap:AccumulatedTranslationAdjustmentMember2020-12-310000856982us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-12-310000856982us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2020-12-310000856982us-gaap:PerformanceSharesMember2021-01-012021-09-300000856982srt:MinimumMemberus-gaap:PerformanceSharesMember2022-01-012022-09-300000856982srt:MaximumMemberus-gaap:PerformanceSharesMember2022-01-012022-09-300000856982srt:MinimumMemberus-gaap:PerformanceSharesMember2021-01-012021-09-300000856982srt:MaximumMemberus-gaap:PerformanceSharesMember2021-01-012021-09-300000856982us-gaap:EmployeeStockOptionMember2021-01-012021-09-300000856982us-gaap:RestrictedStockUnitsRSUMember2021-01-012021-09-300000856982us-gaap:RestrictedStockUnitsRSUMember2022-01-012022-09-300000856982mmsi:PeripheralInterventionMemberus-gaap:NonUsMembermmsi:CardiovascularSegmentMember2022-07-012022-09-300000856982mmsi:PeripheralInterventionMembercountry:USmmsi:CardiovascularSegmentMember2022-07-012022-09-300000856982mmsi:OEMMemberus-gaap:NonUsMembermmsi:CardiovascularSegmentMember2022-07-012022-09-300000856982mmsi:OEMMembercountry:USmmsi:CardiovascularSegmentMember2022-07-012022-09-300000856982mmsi:EndoscopyDevicesMemberus-gaap:NonUsMembermmsi:EndoscopySegmentMember2022-07-012022-09-300000856982mmsi:EndoscopyDevicesMembercountry:USmmsi:EndoscopySegmentMember2022-07-012022-09-300000856982mmsi:CustomProceduralSolutionsMemberus-gaap:NonUsMembermmsi:CardiovascularSegmentMember2022-07-012022-09-300000856982mmsi:CustomProceduralSolutionsMembercountry:USmmsi:CardiovascularSegmentMember2022-07-012022-09-300000856982mmsi:CardiacInterventionMemberus-gaap:NonUsMembermmsi:CardiovascularSegmentMember2022-07-012022-09-300000856982mmsi:CardiacInterventionMembercountry:USmmsi:CardiovascularSegmentMember2022-07-012022-09-300000856982us-gaap:NonUsMembermmsi:CardiovascularSegmentMember2022-07-012022-09-300000856982mmsi:PeripheralInterventionMembermmsi:CardiovascularSegmentMember2022-07-012022-09-300000856982mmsi:OEMMembermmsi:CardiovascularSegmentMember2022-07-012022-09-300000856982mmsi:EndoscopyDevicesMembermmsi:EndoscopySegmentMember2022-07-012022-09-300000856982mmsi:CustomProceduralSolutionsMembermmsi:CardiovascularSegmentMember2022-07-012022-09-300000856982mmsi:CardiacInterventionMembermmsi:CardiovascularSegmentMember2022-07-012022-09-300000856982country:USmmsi:CardiovascularSegmentMember2022-07-012022-09-300000856982us-gaap:NonUsMember2022-07-012022-09-300000856982country:US2022-07-012022-09-300000856982mmsi:PeripheralInterventionMemberus-gaap:NonUsMembermmsi:CardiovascularSegmentMember2022-01-012022-09-300000856982mmsi:PeripheralInterventionMembercountry:USmmsi:CardiovascularSegmentMember2022-01-012022-09-300000856982mmsi:OEMMemberus-gaap:NonUsMembermmsi:CardiovascularSegmentMember2022-01-012022-09-300000856982mmsi:OEMMembercountry:USmmsi:CardiovascularSegmentMember2022-01-012022-09-300000856982mmsi:EndoscopyDevicesMemberus-gaap:NonUsMembermmsi:EndoscopySegmentMember2022-01-012022-09-300000856982mmsi:EndoscopyDevicesMembercountry:USmmsi:EndoscopySegmentMember2022-01-012022-09-300000856982mmsi:CustomProceduralSolutionsMemberus-gaap:NonUsMembermmsi:CardiovascularSegmentMember2022-01-012022-09-300000856982mmsi:CustomProceduralSolutionsMembercountry:USmmsi:CardiovascularSegmentMember2022-01-012022-09-300000856982mmsi:CardiacInterventionMemberus-gaap:NonUsMembermmsi:CardiovascularSegmentMember2022-01-012022-09-300000856982mmsi:CardiacInterventionMembercountry:USmmsi:CardiovascularSegmentMember2022-01-012022-09-300000856982us-gaap:NonUsMembermmsi:CardiovascularSegmentMember2022-01-012022-09-300000856982mmsi:PeripheralInterventionMembermmsi:CardiovascularSegmentMember2022-01-012022-09-300000856982mmsi:OEMMembermmsi:CardiovascularSegmentMember2022-01-012022-09-300000856982mmsi:EndoscopyDevicesMembermmsi:EndoscopySegmentMember2022-01-012022-09-300000856982mmsi:CustomProceduralSolutionsMembermmsi:CardiovascularSegmentMember2022-01-012022-09-300000856982mmsi:CardiacInterventionMembermmsi:CardiovascularSegmentMember2022-01-012022-09-300000856982country:USmmsi:CardiovascularSegmentMember2022-01-012022-09-300000856982us-gaap:NonUsMember2022-01-012022-09-300000856982country:US2022-01-012022-09-300000856982mmsi:PeripheralInterventionMemberus-gaap:NonUsMembermmsi:CardiovascularSegmentMember2021-07-012021-09-300000856982mmsi:PeripheralInterventionMembercountry:USmmsi:CardiovascularSegmentMember2021-07-012021-09-300000856982mmsi:OEMMemberus-gaap:NonUsMembermmsi:CardiovascularSegmentMember2021-07-012021-09-300000856982mmsi:OEMMembercountry:USmmsi:CardiovascularSegmentMember2021-07-012021-09-300000856982mmsi:EndoscopyDevicesMemberus-gaap:NonUsMembermmsi:EndoscopySegmentMember2021-07-012021-09-300000856982mmsi:EndoscopyDevicesMembercountry:USmmsi:EndoscopySegmentMember2021-07-012021-09-300000856982mmsi:CustomProceduralSolutionsMemberus-gaap:NonUsMembermmsi:CardiovascularSegmentMember2021-07-012021-09-300000856982mmsi:CustomProceduralSolutionsMembercountry:USmmsi:CardiovascularSegmentMember2021-07-012021-09-300000856982mmsi:CardiacInterventionMemberus-gaap:NonUsMembermmsi:CardiovascularSegmentMember2021-07-012021-09-300000856982mmsi:CardiacInterventionMembercountry:USmmsi:CardiovascularSegmentMember2021-07-012021-09-300000856982us-gaap:NonUsMembermmsi:CardiovascularSegmentMember2021-07-012021-09-300000856982mmsi:PeripheralInterventionMembermmsi:CardiovascularSegmentMember2021-07-012021-09-300000856982mmsi:OEMMembermmsi:CardiovascularSegmentMember2021-07-012021-09-300000856982mmsi:EndoscopyDevicesMembermmsi:EndoscopySegmentMember2021-07-012021-09-300000856982mmsi:CustomProceduralSolutionsMembermmsi:CardiovascularSegmentMember2021-07-012021-09-300000856982mmsi:CardiacInterventionMembermmsi:CardiovascularSegmentMember2021-07-012021-09-300000856982country:USmmsi:CardiovascularSegmentMember2021-07-012021-09-300000856982us-gaap:NonUsMember2021-07-012021-09-300000856982country:US2021-07-012021-09-300000856982mmsi:PeripheralInterventionMemberus-gaap:NonUsMembermmsi:CardiovascularSegmentMember2021-01-012021-09-300000856982mmsi:PeripheralInterventionMembercountry:USmmsi:CardiovascularSegmentMember2021-01-012021-09-300000856982mmsi:OEMMemberus-gaap:NonUsMembermmsi:CardiovascularSegmentMember2021-01-012021-09-300000856982mmsi:OEMMembercountry:USmmsi:CardiovascularSegmentMember2021-01-012021-09-300000856982mmsi:EndoscopyDevicesMemberus-gaap:NonUsMembermmsi:EndoscopySegmentMember2021-01-012021-09-300000856982mmsi:EndoscopyDevicesMembercountry:USmmsi:EndoscopySegmentMember2021-01-012021-09-300000856982mmsi:CustomProceduralSolutionsMemberus-gaap:NonUsMembermmsi:CardiovascularSegmentMember2021-01-012021-09-300000856982mmsi:CustomProceduralSolutionsMembercountry:USmmsi:CardiovascularSegmentMember2021-01-012021-09-300000856982mmsi:CardiacInterventionMemberus-gaap:NonUsMembermmsi:CardiovascularSegmentMember2021-01-012021-09-300000856982mmsi:CardiacInterventionMembercountry:USmmsi:CardiovascularSegmentMember2021-01-012021-09-300000856982us-gaap:NonUsMembermmsi:CardiovascularSegmentMember2021-01-012021-09-300000856982mmsi:PeripheralInterventionMembermmsi:CardiovascularSegmentMember2021-01-012021-09-300000856982mmsi:OEMMembermmsi:CardiovascularSegmentMember2021-01-012021-09-300000856982mmsi:EndoscopyDevicesMembermmsi:EndoscopySegmentMember2021-01-012021-09-300000856982mmsi:CustomProceduralSolutionsMembermmsi:CardiovascularSegmentMember2021-01-012021-09-300000856982mmsi:CardiacInterventionMembermmsi:CardiovascularSegmentMember2021-01-012021-09-300000856982country:USmmsi:CardiovascularSegmentMember2021-01-012021-09-300000856982us-gaap:NonUsMember2021-01-012021-09-300000856982country:US2021-01-012021-09-300000856982mmsi:BiotraceMedicalIncMemberus-gaap:SubsequentEventMember2022-10-032022-10-030000856982mmsi:FluidxMedicalTechnologyLLCMember2022-10-012022-10-310000856982mmsi:FluidxMedicalTechnologyLLCMember2019-01-012021-12-310000856982mmsi:CiannaMedicalMembersrt:DirectorMember2022-01-012022-09-300000856982mmsi:CiannaMedicalMembersrt:DirectorMember2021-01-012021-09-300000856982us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMemberus-gaap:AccumulatedTranslationAdjustmentMember2022-01-012022-09-300000856982us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-04-012022-06-300000856982us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-01-012022-03-310000856982us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-04-012021-06-300000856982us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-01-012021-03-310000856982us-gaap:InterestRateSwapMemberus-gaap:CashFlowHedgingMemberus-gaap:InterestExpenseMember2022-07-012022-09-300000856982us-gaap:ForeignExchangeForwardMemberus-gaap:CashFlowHedgingMemberus-gaap:RevenueFromContractWithCustomerMember2022-07-012022-09-300000856982us-gaap:ForeignExchangeForwardMemberus-gaap:CashFlowHedgingMemberus-gaap:CostOfSalesMember2022-07-012022-09-300000856982us-gaap:InterestRateSwapMemberus-gaap:CashFlowHedgingMemberus-gaap:InterestExpenseMember2022-01-012022-09-300000856982us-gaap:ForeignExchangeForwardMemberus-gaap:CashFlowHedgingMemberus-gaap:RevenueFromContractWithCustomerMember2022-01-012022-09-300000856982us-gaap:CashFlowHedgingMemberus-gaap:CostOfSalesMember2022-01-012022-09-300000856982us-gaap:InterestRateSwapMemberus-gaap:CashFlowHedgingMemberus-gaap:InterestExpenseMember2021-07-012021-09-300000856982us-gaap:ForeignExchangeForwardMemberus-gaap:CashFlowHedgingMemberus-gaap:RevenueFromContractWithCustomerMember2021-07-012021-09-300000856982us-gaap:ForeignExchangeForwardMemberus-gaap:CashFlowHedgingMemberus-gaap:CostOfSalesMember2021-07-012021-09-300000856982us-gaap:InterestRateSwapMemberus-gaap:CashFlowHedgingMemberus-gaap:InterestExpenseMember2021-01-012021-09-300000856982us-gaap:ForeignExchangeForwardMemberus-gaap:CashFlowHedgingMemberus-gaap:RevenueFromContractWithCustomerMember2021-01-012021-09-300000856982us-gaap:CashFlowHedgingMemberus-gaap:CostOfSalesMember2021-01-012021-09-300000856982us-gaap:InterestRateSwapMemberus-gaap:CashFlowHedgingMember2022-07-012022-09-300000856982us-gaap:ForeignExchangeForwardMemberus-gaap:CashFlowHedgingMember2022-07-012022-09-300000856982us-gaap:InterestRateSwapMemberus-gaap:CashFlowHedgingMember2022-01-012022-09-300000856982us-gaap:ForeignExchangeForwardMemberus-gaap:CashFlowHedgingMember2022-01-012022-09-300000856982us-gaap:InterestRateSwapMemberus-gaap:CashFlowHedgingMember2021-07-012021-09-300000856982us-gaap:ForeignExchangeForwardMemberus-gaap:CashFlowHedgingMember2021-07-012021-09-300000856982us-gaap:InterestRateSwapMemberus-gaap:CashFlowHedgingMember2021-01-012021-09-300000856982us-gaap:ForeignExchangeForwardMemberus-gaap:CashFlowHedgingMember2021-01-012021-09-300000856982mmsi:EndoscopySegmentMember2022-07-012022-09-300000856982mmsi:CardiovascularSegmentMember2022-07-012022-09-300000856982mmsi:EndoscopySegmentMember2022-01-012022-09-300000856982mmsi:EndoscopySegmentMember2021-07-012021-09-300000856982mmsi:CardiovascularSegmentMember2021-07-012021-09-300000856982mmsi:EndoscopySegmentMember2021-01-012021-09-300000856982mmsi:CardiovascularSegmentMember2021-01-012021-09-300000856982us-gaap:AccumulatedTranslationAdjustmentMember2022-07-012022-09-300000856982us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-07-012022-09-300000856982us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2022-07-012022-09-300000856982us-gaap:AccumulatedTranslationAdjustmentMember2022-01-012022-09-300000856982us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-01-012022-09-300000856982us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2022-01-012022-09-300000856982us-gaap:AccumulatedTranslationAdjustmentMember2021-07-012021-09-300000856982us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-07-012021-09-300000856982us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2021-07-012021-09-300000856982us-gaap:AccumulatedTranslationAdjustmentMember2021-01-012021-09-300000856982us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-01-012021-09-300000856982us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2021-01-012021-09-300000856982us-gaap:RetainedEarningsMember2022-07-012022-09-300000856982us-gaap:RetainedEarningsMember2022-04-012022-06-300000856982us-gaap:RetainedEarningsMember2022-01-012022-03-310000856982us-gaap:RetainedEarningsMember2021-07-012021-09-300000856982us-gaap:RetainedEarningsMember2021-04-012021-06-300000856982us-gaap:RetainedEarningsMember2021-01-012021-03-310000856982mmsi:SecuritiesLitigationMember2022-09-300000856982mmsi:CreditAgreementMember2021-12-310000856982mmsi:CreditAgreementMemberus-gaap:RevolvingCreditFacilityMember2019-07-310000856982mmsi:LicenseAgreementArravascLimitedMember2021-07-012021-09-300000856982mmsi:STDPharmaceuticalProductsLimitedMember2022-01-012022-09-300000856982mmsi:LicenseAgreementArravascLimitedMember2021-01-012021-09-300000856982us-gaap:DisposalGroupNotDiscontinuedOperationsMembermmsi:FibroveinHoldingsLimitedMember2022-07-012022-09-300000856982us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2022-09-300000856982us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2021-12-310000856982mmsi:RestoreEndosystemsLLCMemberus-gaap:InProcessResearchAndDevelopmentMember2022-04-302022-04-300000856982us-gaap:TrademarksMember2022-09-300000856982us-gaap:PatentsMember2022-09-300000856982us-gaap:OtherIntangibleAssetsMember2022-09-300000856982us-gaap:LicensingAgreementsMember2022-09-300000856982us-gaap:DistributionRightsMember2022-09-300000856982us-gaap:DevelopedTechnologyRightsMember2022-09-300000856982us-gaap:CustomerListsMember2022-09-300000856982us-gaap:TrademarksMember2021-12-310000856982us-gaap:PatentsMember2021-12-310000856982us-gaap:OtherIntangibleAssetsMember2021-12-310000856982us-gaap:LicensingAgreementsMember2021-12-310000856982us-gaap:DistributionRightsMember2021-12-310000856982us-gaap:DevelopedTechnologyRightsMember2021-12-310000856982us-gaap:CustomerListsMember2021-12-310000856982mmsi:SelioMedicalLimitedSelioMember2022-09-3000008569822022-06-300000856982mmsi:SelioMedicalLimitedSelioMember2021-12-3100008569822021-06-300000856982mmsi:ContingentConsiderationMember2022-09-300000856982mmsi:ContingentConsiderationMember2022-06-300000856982mmsi:ContingentConsiderationMember2021-12-310000856982mmsi:ContingentConsiderationMember2021-09-300000856982mmsi:ContingentConsiderationMember2021-06-300000856982mmsi:ContingentConsiderationMember2020-12-310000856982mmsi:ContingentConsiderationMember2022-07-012022-09-300000856982mmsi:FluidxMedicalTechnologyLLCMember2022-09-300000856982us-gaap:PerformanceSharesMember2022-01-012022-09-300000856982us-gaap:EmployeeStockOptionMember2022-01-012022-09-300000856982us-gaap:RestrictedStockUnitsRSUMember2022-09-300000856982us-gaap:PerformanceSharesMember2022-09-300000856982us-gaap:EmployeeStockOptionMember2022-09-300000856982mmsi:CashSettledPerformanceSharesMember2022-09-300000856982us-gaap:DisposalGroupNotDiscontinuedOperationsMembermmsi:FibroveinHoldingsLimitedMember2022-09-300000856982us-gaap:ForeignExchangeForwardMember2022-01-012022-09-300000856982us-gaap:ForeignExchangeForwardMemberus-gaap:FairValueHedgingMemberus-gaap:NondesignatedMember2021-12-310000856982us-gaap:ForeignExchangeForwardMemberus-gaap:CashFlowHedgingMemberus-gaap:DesignatedAsHedgingInstrumentMember2021-12-310000856982mmsi:WellsFargoFixedRateDerivativeContractTwoMemberus-gaap:InterestRateSwapMemberus-gaap:DesignatedAsHedgingInstrumentMember2019-12-230000856982us-gaap:ForeignExchangeForwardMemberus-gaap:NondesignatedMember2022-07-012022-09-300000856982us-gaap:ForeignExchangeForwardMemberus-gaap:NondesignatedMember2022-01-012022-09-300000856982us-gaap:ForeignExchangeForwardMemberus-gaap:NondesignatedMember2021-07-012021-09-300000856982us-gaap:ForeignExchangeForwardMemberus-gaap:NondesignatedMember2021-01-012021-09-300000856982mmsi:WellsFargoFixedRateDerivativeContractTwoMemberus-gaap:InterestRateSwapMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:LondonInterbankOfferedRateLiborSwapRateMember2019-12-230000856982us-gaap:OtherNoncurrentLiabilitiesMemberus-gaap:ForeignExchangeForwardMemberus-gaap:DesignatedAsHedgingInstrumentMember2022-09-300000856982us-gaap:AccruedLiabilitiesMemberus-gaap:ForeignExchangeForwardMemberus-gaap:NondesignatedMember2022-09-300000856982us-gaap:AccruedLiabilitiesMemberus-gaap:ForeignExchangeForwardMemberus-gaap:DesignatedAsHedgingInstrumentMember2022-09-300000856982us-gaap:OtherNoncurrentLiabilitiesMemberus-gaap:InterestRateSwapMemberus-gaap:DesignatedAsHedgingInstrumentMember2021-12-310000856982us-gaap:OtherNoncurrentLiabilitiesMemberus-gaap:ForeignExchangeForwardMemberus-gaap:DesignatedAsHedgingInstrumentMember2021-12-310000856982us-gaap:AccruedLiabilitiesMemberus-gaap:ForeignExchangeForwardMemberus-gaap:NondesignatedMember2021-12-310000856982us-gaap:AccruedLiabilitiesMemberus-gaap:ForeignExchangeForwardMemberus-gaap:DesignatedAsHedgingInstrumentMember2021-12-310000856982us-gaap:PrepaidExpensesAndOtherCurrentAssetsMemberus-gaap:ForeignExchangeForwardMemberus-gaap:NondesignatedMember2022-09-300000856982us-gaap:PrepaidExpensesAndOtherCurrentAssetsMemberus-gaap:ForeignExchangeForwardMemberus-gaap:DesignatedAsHedgingInstrumentMember2022-09-300000856982us-gaap:OtherNoncurrentAssetsMemberus-gaap:InterestRateSwapMemberus-gaap:DesignatedAsHedgingInstrumentMember2022-09-300000856982us-gaap:OtherNoncurrentAssetsMemberus-gaap:ForeignExchangeForwardMemberus-gaap:DesignatedAsHedgingInstrumentMember2022-09-300000856982us-gaap:PrepaidExpensesAndOtherCurrentAssetsMemberus-gaap:ForeignExchangeForwardMemberus-gaap:NondesignatedMember2021-12-310000856982us-gaap:PrepaidExpensesAndOtherCurrentAssetsMemberus-gaap:ForeignExchangeForwardMemberus-gaap:DesignatedAsHedgingInstrumentMember2021-12-310000856982us-gaap:OtherNoncurrentAssetsMemberus-gaap:ForeignExchangeForwardMemberus-gaap:DesignatedAsHedgingInstrumentMember2021-12-310000856982us-gaap:InterestRateSwapMemberus-gaap:DesignatedAsHedgingInstrumentMember2022-09-300000856982us-gaap:InterestRateSwapMemberus-gaap:DesignatedAsHedgingInstrumentMember2021-12-310000856982mmsi:CreditAgreementMemberus-gaap:LoansPayableMember2019-07-310000856982us-gaap:RevolvingCreditFacilityMember2022-09-300000856982us-gaap:LoansPayableMember2022-09-300000856982mmsi:CreditAgreementMember2022-09-300000856982us-gaap:RevolvingCreditFacilityMember2021-12-310000856982us-gaap:LoansPayableMember2021-12-310000856982us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMemberus-gaap:AccumulatedOtherComprehensiveIncomeMember2022-07-012022-09-300000856982us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMemberus-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2022-07-012022-09-300000856982us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMemberus-gaap:AccumulatedOtherComprehensiveIncomeMember2022-01-012022-09-300000856982us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMemberus-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2022-01-012022-09-300000856982us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMemberus-gaap:AccumulatedOtherComprehensiveIncomeMember2021-07-012021-09-300000856982us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMemberus-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2021-07-012021-09-300000856982us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMemberus-gaap:AccumulatedOtherComprehensiveIncomeMember2021-01-012021-09-300000856982us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMemberus-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2021-01-012021-09-300000856982us-gaap:CommonStockMember2022-09-300000856982us-gaap:CommonStockMember2022-06-300000856982us-gaap:CommonStockMember2022-03-310000856982us-gaap:CommonStockMember2021-12-310000856982us-gaap:CommonStockMember2021-09-300000856982us-gaap:CommonStockMember2021-06-300000856982us-gaap:CommonStockMember2021-03-310000856982us-gaap:CommonStockMember2020-12-3100008569822020-12-3100008569822021-09-300000856982srt:WeightedAverageMembermmsi:RevenueMilestonesMemberus-gaap:FairValueInputsLevel3Memberus-gaap:MeasurementInputDiscountRateMemberus-gaap:IncomeApproachValuationTechniqueMember2022-09-300000856982srt:WeightedAverageMembermmsi:RevenueBasedPaymentsMemberus-gaap:FairValueInputsLevel3Memberus-gaap:MeasurementInputDiscountRateMemberus-gaap:IncomeApproachValuationTechniqueMember2022-09-300000856982srt:MinimumMembermmsi:RevenueMilestonesMemberus-gaap:FairValueInputsLevel3Memberus-gaap:MeasurementInputDiscountRateMemberus-gaap:IncomeApproachValuationTechniqueMember2022-09-300000856982srt:MinimumMembermmsi:RevenueBasedPaymentsMemberus-gaap:FairValueInputsLevel3Memberus-gaap:MeasurementInputDiscountRateMemberus-gaap:IncomeApproachValuationTechniqueMember2022-09-300000856982srt:MaximumMembermmsi:RevenueMilestonesMemberus-gaap:FairValueInputsLevel3Memberus-gaap:MeasurementInputDiscountRateMemberus-gaap:IncomeApproachValuationTechniqueMember2022-09-300000856982srt:MaximumMembermmsi:RevenueBasedPaymentsMemberus-gaap:FairValueInputsLevel3Memberus-gaap:MeasurementInputDiscountRateMemberus-gaap:IncomeApproachValuationTechniqueMember2022-09-300000856982mmsi:RegulatoryApprovalMilestoneMemberus-gaap:FairValueInputsLevel3Memberus-gaap:MeasurementInputDiscountRateMemberus-gaap:IncomeApproachValuationTechniqueMember2022-09-300000856982mmsi:RegulatoryApprovalMilestoneMemberus-gaap:FairValueInputsLevel3Membermmsi:MilestonePaymentProbabilityMemberus-gaap:IncomeApproachValuationTechniqueMember2022-09-300000856982srt:WeightedAverageMembermmsi:RevenueMilestonesMemberus-gaap:FairValueInputsLevel3Memberus-gaap:MeasurementInputDiscountRateMemberus-gaap:IncomeApproachValuationTechniqueMember2021-12-310000856982srt:WeightedAverageMembermmsi:RevenueBasedPaymentsMemberus-gaap:FairValueInputsLevel3Memberus-gaap:MeasurementInputDiscountRateMemberus-gaap:IncomeApproachValuationTechniqueMember2021-12-310000856982srt:MinimumMembermmsi:RevenueMilestonesMemberus-gaap:FairValueInputsLevel3Memberus-gaap:MeasurementInputDiscountRateMemberus-gaap:IncomeApproachValuationTechniqueMember2021-12-310000856982srt:MinimumMembermmsi:RevenueBasedPaymentsMemberus-gaap:FairValueInputsLevel3Memberus-gaap:MeasurementInputDiscountRateMemberus-gaap:IncomeApproachValuationTechniqueMember2021-12-310000856982srt:MaximumMembermmsi:RevenueMilestonesMemberus-gaap:FairValueInputsLevel3Memberus-gaap:MeasurementInputDiscountRateMemberus-gaap:IncomeApproachValuationTechniqueMember2021-12-310000856982srt:MaximumMembermmsi:RevenueBasedPaymentsMemberus-gaap:FairValueInputsLevel3Memberus-gaap:MeasurementInputDiscountRateMemberus-gaap:IncomeApproachValuationTechniqueMember2021-12-310000856982mmsi:RegulatoryApprovalMilestoneMemberus-gaap:FairValueInputsLevel3Memberus-gaap:MeasurementInputDiscountRateMemberus-gaap:IncomeApproachValuationTechniqueMember2021-12-310000856982mmsi:RegulatoryApprovalMilestoneMemberus-gaap:FairValueInputsLevel3Membermmsi:MilestonePaymentProbabilityMemberus-gaap:IncomeApproachValuationTechniqueMember2021-12-310000856982us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2022-09-300000856982us-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueMeasurementsRecurringMember2022-09-300000856982mmsi:RevenueMilestonesMemberus-gaap:FairValueInputsLevel3Member2022-09-300000856982mmsi:RevenueBasedPaymentsMemberus-gaap:FairValueInputsLevel3Member2022-09-300000856982mmsi:RegulatoryApprovalMilestoneMemberus-gaap:FairValueInputsLevel3Member2022-09-300000856982us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMember2021-12-310000856982us-gaap:EstimateOfFairValueFairValueDisclosureMemberus-gaap:FairValueMeasurementsRecurringMember2021-12-310000856982mmsi:RevenueMilestonesMemberus-gaap:FairValueInputsLevel3Member2021-12-310000856982mmsi:RevenueBasedPaymentsMemberus-gaap:FairValueInputsLevel3Member2021-12-310000856982mmsi:RegulatoryApprovalMilestoneMemberus-gaap:FairValueInputsLevel3Member2021-12-310000856982mmsi:QxMedicalLlcAssetAcquisitionsMember2022-09-300000856982mmsi:RestoreEndosystemsLLCMember2022-04-302022-04-300000856982us-gaap:RestrictedStockUnitsRSUMemberus-gaap:SellingGeneralAndAdministrativeExpensesMember2022-07-012022-09-300000856982us-gaap:PerformanceSharesMemberus-gaap:SellingGeneralAndAdministrativeExpensesMember2022-07-012022-09-300000856982us-gaap:EmployeeStockOptionMemberus-gaap:SellingGeneralAndAdministrativeExpensesMember2022-07-012022-09-300000856982us-gaap:EmployeeStockOptionMemberus-gaap:ResearchAndDevelopmentExpenseMember2022-07-012022-09-300000856982us-gaap:EmployeeStockOptionMemberus-gaap:CostOfSalesMember2022-07-012022-09-300000856982mmsi:CashSettledPerformanceSharesMemberus-gaap:SellingGeneralAndAdministrativeExpensesMember2022-07-012022-09-300000856982us-gaap:SellingGeneralAndAdministrativeExpensesMember2022-07-012022-09-300000856982us-gaap:RestrictedStockUnitsRSUMemberus-gaap:SellingGeneralAndAdministrativeExpensesMember2022-01-012022-09-300000856982us-gaap:PerformanceSharesMemberus-gaap:SellingGeneralAndAdministrativeExpensesMember2022-01-012022-09-300000856982us-gaap:EmployeeStockOptionMemberus-gaap:SellingGeneralAndAdministrativeExpensesMember2022-01-012022-09-300000856982us-gaap:EmployeeStockOptionMemberus-gaap:ResearchAndDevelopmentExpenseMember2022-01-012022-09-300000856982us-gaap:EmployeeStockOptionMemberus-gaap:CostOfSalesMember2022-01-012022-09-300000856982mmsi:CashSettledPerformanceSharesMemberus-gaap:SellingGeneralAndAdministrativeExpensesMember2022-01-012022-09-300000856982us-gaap:SellingGeneralAndAdministrativeExpensesMember2022-01-012022-09-300000856982us-gaap:RestrictedStockUnitsRSUMemberus-gaap:SellingGeneralAndAdministrativeExpensesMember2021-07-012021-09-300000856982us-gaap:PerformanceSharesMemberus-gaap:SellingGeneralAndAdministrativeExpensesMember2021-07-012021-09-300000856982us-gaap:EmployeeStockOptionMemberus-gaap:SellingGeneralAndAdministrativeExpensesMember2021-07-012021-09-300000856982us-gaap:EmployeeStockOptionMemberus-gaap:ResearchAndDevelopmentExpenseMember2021-07-012021-09-300000856982us-gaap:EmployeeStockOptionMemberus-gaap:CostOfSalesMember2021-07-012021-09-300000856982mmsi:CashSettledPerformanceSharesMemberus-gaap:SellingGeneralAndAdministrativeExpensesMember2021-07-012021-09-300000856982us-gaap:SellingGeneralAndAdministrativeExpensesMember2021-07-012021-09-300000856982us-gaap:RestrictedStockUnitsRSUMemberus-gaap:SellingGeneralAndAdministrativeExpensesMember2021-01-012021-09-300000856982us-gaap:PerformanceSharesMemberus-gaap:SellingGeneralAndAdministrativeExpensesMember2021-01-012021-09-300000856982us-gaap:EmployeeStockOptionMemberus-gaap:SellingGeneralAndAdministrativeExpensesMember2021-01-012021-09-300000856982us-gaap:EmployeeStockOptionMemberus-gaap:ResearchAndDevelopmentExpenseMember2021-01-012021-09-300000856982us-gaap:EmployeeStockOptionMemberus-gaap:CostOfSalesMember2021-01-012021-09-300000856982mmsi:CashSettledPerformanceSharesMemberus-gaap:SellingGeneralAndAdministrativeExpensesMember2021-01-012021-09-300000856982us-gaap:SellingGeneralAndAdministrativeExpensesMember2021-01-012021-09-300000856982us-gaap:CommonStockMember2022-04-012022-06-3000008569822022-04-012022-06-300000856982us-gaap:CommonStockMember2021-04-012021-06-3000008569822021-04-012021-06-3000008569822022-01-012022-03-3100008569822021-01-012021-03-310000856982us-gaap:CommonStockMember2022-07-012022-09-300000856982us-gaap:CommonStockMember2022-01-012022-03-310000856982us-gaap:CommonStockMember2021-07-012021-09-300000856982us-gaap:CommonStockMember2021-01-012021-03-310000856982mmsi:CashSettledPerformanceSharesMember2022-01-012022-09-300000856982mmsi:CashSettledPerformanceSharesMember2021-01-012021-09-300000856982mmsi:CardiovascularSegmentMember2022-01-012022-09-300000856982mmsi:CreditAgreementMember2022-01-012022-09-3000008569822022-09-3000008569822021-12-310000856982mmsi:ContingentConsiderationMember2022-01-012022-09-300000856982mmsi:ContingentConsiderationMember2021-07-012021-09-300000856982mmsi:ContingentConsiderationMember2021-01-012021-09-300000856982us-gaap:ForeignExchangeForwardMemberus-gaap:FairValueHedgingMemberus-gaap:NondesignatedMember2022-09-300000856982us-gaap:ForeignExchangeForwardMemberus-gaap:CashFlowHedgingMemberus-gaap:DesignatedAsHedgingInstrumentMember2022-09-300000856982mmsi:RestoreEndosystemsLLCMembermmsi:ContingentConsiderationPaymentTwoMember2022-04-302022-04-300000856982mmsi:RestoreEndosystemsLLCMembermmsi:ContingentConsiderationPaymentOneMember2022-04-302022-04-300000856982us-gaap:InterestExpenseMember2022-01-012022-09-300000856982mmsi:RevenueAndCostOfSalesMember2022-01-012022-09-300000856982us-gaap:OtherNoncurrentLiabilitiesMember2022-09-300000856982us-gaap:OtherNoncurrentLiabilitiesMember2021-12-310000856982us-gaap:AccruedLiabilitiesMember2022-09-300000856982us-gaap:AccruedLiabilitiesMember2021-12-3100008569822022-07-012022-09-3000008569822021-07-012021-09-3000008569822021-01-012021-09-300000856982country:USmmsi:BiotraceMedicalIncMembermmsi:AchievementOfFirstDeviceSoldInUnitedStatesMemberus-gaap:SubsequentEventMember2022-10-0300008569822022-10-2600008569822022-01-012022-09-30xbrli:sharesiso4217:USDmmsi:itemxbrli:puremmsi:DerivativeInstrumentiso4217:USDxbrli:sharesmmsi:segment

d Peripheral Intervention engu%911Y2022

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2022

OR

    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                to                .

Commission File Number   0-18592

Graphic

MERIT MEDICAL SYSTEMS, INC.

(Exact name of registrant as specified in its charter)

Utah

    

87-0447695

(State or other jurisdiction of incorporation or organization)

(IRS Employer 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

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol

Name of exchange on which registered

Common Stock, no par

MMSI

NASDAQ Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to filing requirements for the past 90 days. Yes   No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes   No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer 

Accelerated Filer 

Non-Accelerated Filer 

Smaller Reporting Company 

Emerging Growth Company 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes   No

Indicate the number of shares outstanding of each of the Registrant’s classes of common stock, as of the latest practicable date.

Title or class

Shares outstanding as of October 26, 2022

Common Stock, no par

    

56,919,405

TABLE OF CONTENTS

PART I.

   

FINANCIAL INFORMATION

3

Item 1.

Financial Statements (Unaudited)

3

Consolidated Balance Sheets

3

Consolidated Statements of Income

5

Consolidated Statements of Comprehensive Income

6

Consolidated Statements of Stockholders’ Equity

7

Consolidated Statements of Cash Flows

9

Condensed Notes to Consolidated Financial Statements

11

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

30

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

38

Item 4.

Controls and Procedures

38

PART II.

OTHER INFORMATION

38

Item 1.

Legal Proceedings

38

Item 1A.

Risk Factors

38

Item 6.

Exhibits

42

SIGNATURES

43

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

MERIT MEDICAL SYSTEMS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands)

    

September 30, 

    

December 31, 

ASSETS

    

2022

    

2021

(unaudited)

Current assets:

 

  

 

  

Cash and cash equivalents

$

51,481

$

67,750

Trade receivables — net of allowance for credit losses — 2022 — $8,018 and 2021 — $6,767

 

155,828

 

152,301

Other receivables

 

10,827

 

17,763

Inventories

 

246,660

 

221,922

Prepaid expenses and other current assets

 

27,388

 

16,149

Prepaid income taxes

 

3,515

 

3,550

Income tax refund receivables

 

4,164

 

2,777

Total current assets

 

499,863

 

482,212

Property and equipment:

 

  

 

  

Land and land improvements

 

25,699

 

25,287

Buildings

 

186,976

 

190,044

Manufacturing equipment

 

290,306

 

277,976

Furniture and fixtures

 

63,380

 

61,446

Leasehold improvements

 

49,962

 

46,341

Construction-in-progress

 

59,783

 

51,182

Total property and equipment

 

676,106

 

652,276

Less accumulated depreciation

 

(299,950)

 

(280,618)

Property and equipment — net

 

376,156

371,658

Other assets:

 

  

 

  

Intangible assets:

 

  

 

  

Developed technology — net of accumulated amortization — 2022 — $263,990 and 2021 — $234,016

 

245,282

 

276,833

Other — net of accumulated amortization — 2022 — $68,308 and 2021 — $65,053

 

38,825

 

42,436

Goodwill

 

358,056

 

361,741

Deferred income tax assets

 

5,467

 

6,080

Right-of-use operating lease assets

64,700

65,913

Other assets

 

44,388

 

41,421

Total other assets

 

756,718

 

794,424

Total assets

$

1,632,737

$

1,648,294

See condensed notes to consolidated financial statements.

(continued)

3

MERIT MEDICAL SYSTEMS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands)

    

September 30, 

    

December 31, 

LIABILITIES AND STOCKHOLDERS’ EQUITY

    

2022

    

2021

(unaudited)

Current liabilities:

 

  

  

Trade payables

$

63,206

$

55,624

Accrued expenses

 

124,504

 

159,014

Current portion of long-term debt

 

11,250

 

8,438

Short-term operating lease liabilities

10,310

10,668

Income taxes payable

 

3,765

 

2,536

Total current liabilities

 

213,035

 

236,280

Long-term debt

 

205,412

 

234,397

Deferred income tax liabilities

 

31,168

 

31,503

Long-term income taxes payable

 

347

 

347

Liabilities related to unrecognized tax benefits

 

932

 

932

Deferred compensation payable

 

14,786

 

18,111

Deferred credits

 

1,735

 

1,815

Long-term operating lease liabilities

59,989

 

61,526

Other long-term obligations

 

16,492

 

23,584

Total liabilities

 

543,896

 

608,495

Commitments and contingencies

 

  

 

  

Stockholders' equity:

 

  

 

  

Preferred stock — 5,000 shares authorized as of September 30, 2022 and December 31, 2021; no shares issued

 

 

Common stock, no par value; 100,000 shares authorized; issued and outstanding as of September 30, 2022 - 56,918 and December 31, 2021 - 56,570

 

658,198

 

641,533

Retained earnings

 

447,372

 

406,257

Accumulated other comprehensive loss

 

(16,729)

 

(7,991)

Total stockholders’ equity

 

1,088,841

 

1,039,799

Total liabilities and stockholders’ equity

$

1,632,737

$

1,648,294

See condensed notes to consolidated financial statements.

(concluded)

4

MERIT MEDICAL SYSTEMS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share amounts - unaudited)

    

Three Months Ended

    

Nine Months Ended

September 30, 

September 30, 

    

2022

    

2021

    

2022

    

2021

Net sales

$

287,175

$

267,021

$

857,566

$

796,259

Cost of sales

 

158,602

 

146,527

 

473,019

 

439,732

Gross profit

 

128,573

 

120,494

 

384,547

 

356,527

Operating expenses:

 

  

 

  

 

  

 

  

Selling, general and administrative

 

89,780

 

86,474

 

259,282

 

259,061

Research and development

 

19,221

 

16,974

 

55,074

 

50,841

Impairment charges

 

 

 

1,672

 

4,283

Contingent consideration expense

 

915

 

1,115

 

4,702

 

3,322

Acquired in-process research and development

 

 

 

6,671

 

Total operating expenses

 

109,916

 

104,563

 

327,401

 

317,507

Income from operations

 

18,657

 

15,931

 

57,146

 

39,020

Other income (expense):

 

  

 

  

 

  

 

  

Interest income

 

116

 

104

 

316

 

668

Interest expense

 

(1,831)

 

(1,233)

 

(4,180)

 

(4,156)

Other income (expense) — net

 

660

 

(625)

 

(808)

 

(1,796)

Total other expense — net

 

(1,055)

 

(1,754)

 

(4,672)

 

(5,284)

Income before income taxes

 

17,602

 

14,177

 

52,474

 

33,736

Income tax expense

 

2,330

 

2,210

 

11,359

 

5,895

Net income

$

15,272

$

11,967

$

41,115

$

27,841

Earnings per common share

 

  

 

  

 

  

 

  

Basic

$

0.27

$

0.21

$

0.73

$

0.50

Diluted

$

0.27

$

0.21

$

0.71

$

0.49

Weighted average shares outstanding

 

  

 

  

 

  

 

  

Basic

 

56,835

 

56,302

 

56,707

 

56,033

Diluted

 

57,586

 

57,549

 

57,573

 

57,274

See condensed notes to consolidated financial statements.

5

MERIT MEDICAL SYSTEMS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands - unaudited)

    

Three Months Ended

    

Nine Months Ended

September 30, 

September 30, 

    

2022

    

2021

    

2022

    

2021

Net income

$

15,272

$

11,967

$

41,115

$

27,841

Other comprehensive income (loss):

 

  

 

  

 

  

 

  

Cash flow hedges

 

3,850

 

1,522

 

13,182

 

5,442

Income tax benefit (expense)

 

(942)

 

(377)

 

(3,226)

 

(1,349)

Foreign currency translation adjustment

 

(9,003)

 

(2,873)

 

(18,775)

 

(5,535)

Income tax benefit (expense)

 

85

 

346

 

81

 

678

Total other comprehensive income (loss)

 

(6,010)

 

(1,382)

 

(8,738)

 

(764)

Total comprehensive income

$

9,262

$

10,585

$

32,377

$

27,077

See condensed notes to consolidated financial statements.

6

MERIT MEDICAL SYSTEMS, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In thousands - unaudited)

Common Stock

Retained

Accumulated Other

    

Shares

    

Amount

    

Earnings

    

Comprehensive Income (Loss)

    

Total

Balance — January 1, 2022

 

56,570

$

641,533

$

406,257

$

(7,991)

$

1,039,799

Net income

 

  

 

  

 

10,545

 

  

 

10,545

Other comprehensive income

 

  

 

  

 

  

 

1,338

 

1,338

Stock-based compensation expense

 

  

 

4,212

 

  

 

  

 

4,212

Options exercised

 

52

 

1,320

 

  

 

  

 

1,320

Issuance of common stock under Employee Stock Purchase Plan

 

5

 

320

 

  

 

  

 

320

Shares issued from time-vested restricted stock units

44

Shares surrendered in exchange for payment of payroll tax liabilities

 

(16)

 

(1,015)

(1,015)

Balance — March 31, 2022

 

56,655

646,370

416,802

(6,653)

1,056,519

Net income

 

  

 

  

 

15,298

 

  

 

15,298

Other comprehensive loss

 

  

 

  

 

  

 

(4,066)

 

(4,066)

Stock-based compensation expense

 

  

 

3,952

 

  

 

  

 

3,952

Options exercised

 

58

 

1,303

 

  

 

  

 

1,303

Issuance of common stock under Employee Stock Purchase Plan

 

6

 

301

 

  

 

  

 

301

Shares issued from time-vested restricted stock units

26

Balance — June 30, 2022

 

56,745

651,926

432,100

(10,719)

1,073,307

Net income

 

  

 

  

 

15,272

 

  

 

15,272

Other comprehensive loss

 

  

 

  

 

  

 

(6,010)

 

(6,010)

Stock-based compensation expense

 

  

 

3,893

 

  

 

  

 

3,893

Options exercised

 

201

 

4,141

 

  

 

  

 

4,141

Issuance of common stock under Employee Stock Purchase Plan

 

5

 

246

 

  

 

  

 

246

Shares surrendered in exchange for payment of payroll tax liabilities

(18)

(1,110)

(1,110)

Shares surrendered in exchange for exercise of stock options

(15)

(898)

(898)

Balance — September 30, 2022

 

56,918

$

658,198

$

447,372

$

(16,729)

$

1,088,841

See condensed notes to consolidated financial statements.

(continued)

7

MERIT MEDICAL SYSTEMS, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In thousands - unaudited)

Common Stock

Retained

Accumulated Other

    

Shares

    

Amount

    

Earnings

    

Comprehensive Income (Loss)

    

Total

Balance — January 1, 2021

 

55,623

$

606,224

$

357,803

$

(5,452)

$

958,575

Net income

 

  

 

  

 

10,958

 

  

 

10,958

Other comprehensive loss

 

 

 

 

(1,730)

 

(1,730)

Stock-based compensation expense

 

 

3,310

 

 

 

3,310

Options exercised

 

291

 

5,897

 

 

 

5,897

Issuance of common stock under Employee Stock Purchase Plan

 

5

 

263

 

 

 

263

Shares issued from time-vested restricted stock units

25

Shares surrendered in exchange for payment of payroll tax liabilities

 

(9)

 

(488)

(488)

Shares surrendered in exchange for exercise of stock options

 

(2)

 

(93)

(93)

Balance — March 31, 2021

 

55,933

615,113

368,761

(7,182)

976,692

Net income

 

  

 

  

 

4,916

 

  

 

4,916

Other comprehensive income

 

  

 

  

 

  

 

2,348

 

2,348

Stock-based compensation expense

 

  

 

2,765

 

  

 

  

 

2,765

Options exercised

 

253

 

5,455

 

  

 

  

 

5,455

Issuance of common stock under Employee Stock Purchase Plan

 

4

 

258

 

  

 

  

 

258

Shares issued from time-vested restricted stock units

34

Balance — June 30, 2021

56,224

623,591

373,677

(4,834)

992,434

Net income

 

  

 

  

 

11,967

 

  

 

11,967

Other comprehensive loss

 

  

 

  

 

  

 

(1,382)

 

(1,382)

Stock-based compensation expense

 

  

 

4,411

 

  

 

  

 

4,411

Options exercised

 

225

 

5,806

 

  

 

 

5,806

Issuance of common stock under Employee Stock Purchase Plan

 

5

 

314

 

  

 

  

 

314

Shares surrendered in exchange for payment of payroll tax liabilities

(1)

(88)

(88)

Shares surrendered in exchange for exercise of stock options

(1)

(86)

(86)

Balance — September 30, 2021

56,452

$

633,948

$

385,644

$

(6,216)

$

1,013,376

See condensed notes to consolidated financial statements.

(concluded)

8

MERIT MEDICAL SYSTEMS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands - unaudited)

Nine Months Ended

September 30, 

    

2022

    

2021

CASH FLOWS FROM OPERATING ACTIVITIES:

 

Net income

$

41,115

$

27,841

Adjustments to reconcile net income to net cash provided by operating activities:

 

  

 

  

Depreciation and amortization

 

61,312

 

63,173

Loss on disposition of business

 

1,389

 

Loss on sale or abandonment of property and equipment

 

196

 

630

Write-off of certain intangible assets and other long-term assets

 

1,733

 

4,412

Acquired in-process research and development

 

6,671

 

Amortization of right-of-use operating lease assets

7,819

8,941

Adjustments and payments related to contingent consideration liability

2,888

3,322

Amortization of deferred credits

 

(81)

 

(81)

Amortization of long-term debt issuance costs

 

453

 

453

Stock-based compensation expense

 

13,691

 

11,589

Changes in operating assets and liabilities, net of acquisitions and divestitures:

 

 

Trade receivables

 

(9,063)

 

(6,180)

Other receivables

 

5,669

 

(3,173)

Inventories

 

(30,735)

 

(11,180)

Prepaid expenses and other current assets

 

(4,186)

 

(6,251)

Income tax refund receivables

 

(1,713)

 

960

Other assets

 

1,848

 

(3,638)

Trade payables

 

9,752

 

1,181

Accrued expenses

 

(8,861)

 

19,575

Income taxes payable

 

(1,374)

 

(1,600)

Deferred compensation payable

 

(3,325)

 

606

Operating lease liabilities

(8,406)

(9,365)

Other long-term obligations

 

(509)

 

201

Total adjustments

 

45,168

 

73,575

Net cash, cash equivalents, and restricted cash provided by operating activities

 

86,283

 

101,416

CASH FLOWS FROM INVESTING ACTIVITIES:

 

  

 

  

Capital expenditures for:

 

  

 

  

Property and equipment

 

(32,539)

 

(19,612)

Intangible assets

 

(1,909)

 

(2,121)

Proceeds from the sale of property and equipment

 

63

 

1,037

Payments from disposition of business

(971)

Cash paid in acquisitions, net of cash acquired

 

(4,712)

 

(1,858)

Net cash, cash equivalents, and restricted cash used in investing activities

$

(40,068)

$

(22,554)

See condensed notes to consolidated financial statements.

(continued)

9

MERIT MEDICAL SYSTEMS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands - unaudited)

    

Nine Months Ended

September 30, 

2022

2021

CASH FLOWS FROM FINANCING ACTIVITIES:

 

Proceeds from issuance of common stock

$

6,733

$

17,814

Proceeds from issuance of long-term debt

 

172,336

 

73,251

Payments on long-term debt

(198,593)

(145,876)

Contingent payments related to acquisitions

 

(32,862)

 

(10,579)

Payment of taxes related to an exchange of common stock

 

(2,125)

 

(576)

Net cash, cash equivalents, and restricted cash used in financing activities

 

(54,511)

 

(65,966)

Effect of exchange rates on cash, cash equivalents, and restricted cash

 

(5,862)

 

(908)

Net increase (decrease) in cash, cash equivalents and restricted cash

 

(14,158)

 

11,988

CASH, CASH EQUIVALENTS AND RESTRICTED CASH:

 

  

 

  

Beginning of period

 

67,750

 

56,916

End of period

$

53,592

$

68,904

RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH TO THE CONSOLIDATED BALANCE SHEETS:

Cash and cash equivalents

51,481

68,904

<