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Merit Medical (MMSI) Q4 Earnings & Revenues Beat Estimates

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Merit Medical Systems, Inc. MMSI reported fourth-quarter 2019 adjusted earnings per share (EPS) of 40 cents, which beat the Zacks Consensus Estimate of 34 cents by 17.6%. However, the bottom line declined 16.7% from the year-ago quarter.

For the full year, adjusted EPS was $1.46, down 13.6% from that of 2018. However, the figure outpaced the consensus mark by 3.5%.

Revenues in Detail

This Utah-based provider of peripheral and cardiac intervention products reported worldwide revenues of $257.9 million, up 10.6% from the year-ago quarter. On a comparable constant-currency basis, the figure improved 8.5% year over year. Moreover, the top line surpassed the Zacks Consensus Estimate of $252.3 million by 2.2%.

For the full year, the company reported worldwide revenues worth $994.9 million, which improved 12.7% from the previous year. The top line beat the Zacks Consensus Estimate by 0.6%.

Merit Medical Systems, Inc. Price, Consensus and EPS Surprise

 

Merit Medical Systems, Inc. Price, Consensus and EPS Surprise

Merit Medical Systems, Inc. price-consensus-eps-surprise-chart | Merit Medical Systems, Inc. Quote

Segmental Analysis

Cardiovascular

The Cardiovascular unit reported fourth-quarter revenues of $249.4 million, up 10.8% year over year. The upside can be attributed to year-over-year increase of 11.9% in the segment’s Stand-alone devices to $106.2 million. Further, revenues from Catheters improved 8.1% to $45.1 million. Moreover, Embolization devices climbed 12.7% to $13.9 million.

Moreover, revenues at the CRM/EP unit increased 7.9% to $13.7 million. Further, revenues from Custom kits and procedure trays unit, under the Cardiovascular segment, inched up 0.6% to $34.6 million. Inflation devices revenues declined 2.8% on a year-over-year basis at $22.2 million.

Endoscopy Devices

Revenues from the Endoscopy devices totaled $257.9 million, up 10.6% year over year.

Margins

In the quarter under review, gross profit totaled $111.6 million, up 6.7% on a year-over-year basis. Gross margin came in at 43.3% of net revenues, down 160 basis points (bps) year over year. Adjusted gross margins contracted 110 bps on a year-over-year basis to 48.3% of net revenues.

Merit Medical registered selling, general and administrative expenses totaled $82.1 million, up 8.5% year over year.

Meanwhile, research and development expenses amounted to $16.2 million, up 5.8% year over year.

Operating loss in the quarter totaled $3.4 million, against the year-ago quarter’s operating income of $13.7 million.

Financial Update

Cash and cash equivalents came in at $44.3 million, down 34.2% from the year-ago quarter.

As of Dec 31, 2019, total assets came in at $1.76 billion, up 8.5% from $1.62 billion at 2018 year end.

2020 Guidance

For 2020, the company projects revenues in the range of $1.04-1.06 billion. The Zacks Consensus Estimate for the same is pegged at $1.05 billion.

Adjusted earnings per share is anticipated between $1.58 and $1.68. The consensus mark for the metric is pegged at $1.56 per share.

Adjusted operating margin is estimated between 13% and 14%.

Wrapping Up

Merit Medical exited the fourth quarter of 2019 on a strong note. The acquisitions of Cianna Medical and Vascular Insights continue to contribute to the results. Further, the company stands to benefit from the execution of the global growth and profitability plan. Robust Cardiovascular segment is an added positive. New regulatory approvals, a robust pipeline of new products and other internally developed products that are ready for launch instill investor optimism in the stock.

However, escalating operating expenses remains a concern. Headwinds like stiff competition and higher consolidation in the healthcare industry add to woes. Contraction in gross margin is also a headwind.

Zacks Rank

Merit Medical currently carries a Zacks Rank #2 (Buy).

Earnings of Other MedTech Majors at a Glance

Some other top-ranked stocks that reported solid results this earning season are Stryker Corporation SYK, Accuray Incorporated ARAY and IDEXX Laboratories, Inc. IDXX. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Stryker delivered fourth-quarter 2019 adjusted EPS of $2.49, outpacing the Zacks Consensus Estimate by 1.2%. Fourth-quarter reported revenues of $4.13 billion surpassed the Zacks Consensus Estimate by 0.7%. The company carries a Zacks Rank #2.

Accuray reported second-quarter fiscal 2020 adjusted earnings per share (EPS) of a penny, beating the Zacks Consensus Estimate of a loss of 7 cents. Net revenues of $98.8 million outpaced the Zacks Consensus Estimate by 0.3%. The company sports a Zacks Rank #1.

IDEXX Laboratories reported fourth-quarter 2019 adjusted EPS of $1.04, which beat the Zacks Consensus Estimate of 91 cents by 14.3%. Revenues were $605.4 million, surpassing the Zacks Consensus Estimate by 0.9%. The company carries a Zacks Rank of 2.

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