Merit Medical Reports Record Sales, Up 9%, for the Quarter Ended March 31, 2013

Merit Medical Reports Record Sales, Up 9%, for the Quarter Ended March 31,

SOUTH JORDAN, Utah, April 25, 2013 (GLOBE NEWSWIRE) -- Merit Medical Systems,
Inc. (Nasdaq:MMSI), a leading manufacturer and marketer of proprietary
disposable devices used primarily in cardiology, radiology and endoscopy,
today announced record sales of $103.9 million for the quarter ended March 31,
2013, an increase of 9% over sales of $95.6 million for the quarter ended
March 31, 2012.

Merit's non-GAAP net income for the quarter ended March 31, 2013, was $4.3
million, or $0.10 per share, compared to $7.2 million, or $0.17 per share, for
the quarter ended March 31, 2012.

GAAP net income for the first quarter of 2013 was $671,000, or $0.02 per
share, compared to net income of $5.7 million, or $0.14 per share, for the
first quarter of 2012. The decrease in GAAP net income was attributable
primarily to lower gross margins, higher investments in research and
development, and increased interest expense.

For the first quarter of 2013, compared to the first quarter of 2012, catheter
sales grew 10%; custom kit and tray sales were up 7%; Endotek sales increased
6%; stand-alone device sales rose 2%; BioSphere sales decreased 5%; and
inflation device sales decreased 5%. Excluding lower sales to an OEM customer,
inflation device sales rose 1%.

Gross margins for the first quarter of 2013 were 41.4% of sales, compared to
46.2% of sales for the first quarter of 2012. The reduction in gross margins
was due to higher standard costs of 1.9% of sales resulting from lower
production volumes for the first quarter of 2013, amortization of developed
technology costs of 1.3% of sales associated with the integration of the
operations of Thomas Medical Products, Inc. ("Thomas Medical"), implementation
of the Medical Device Excise Tax of 1.0% of sales which was part of the
Affordable Care Act, and one-time finished goods inventory mark-up costs of
0.6% of sales related to the Thomas Medical acquisition. Excluding the
non-recurring Thomas Medical finished goods inventory mark-up costs, gross
margins would have been 42.0% of sales for the first quarter of 2013. The
non-GAAP gross margin was 44.4% of sales for the quarter ended March 31, 2013,
compared to 47.2% of sales for the quarter ended March 31, 2012.

Income from operations for the quarter ended March 31, 2013 was $1.8 million,
or 1.7% of sales, compared to $8.0 million, or 8.4% of sales, for the first
quarter of 2012.The decrease was primarily attributable to lower gross
margins and higher investments in research and development.

"First quarter results were a function of the initiation of the medical device
tax, new expenses associated with our recent acquisition of Thomas Medical, as
well as the expenses associated with our new facilities," said Fred P.
Lampropoulos, Merit's Chairman and Chief Executive Officer."In order to
reduce expenses and improve profitability, we have undertaken a critical look
at our costs starting with SG&A.Discretionary spending, such as community
support, trade shows and company participation in benefits, has been
substantially reduced.We are also reprioritizing our R&D projects."

"We will continue to incur expenses associated with the move into our new
South Jordan facilities for the next two quarters as we consolidate our
operations into them," Lampropoulos continued."During 2013, we anticipate
that we will expense approximately $1.6 million for this effort.When we are
finished, we believe we will have an automated procurement and fulfillment
center that will reduce costs and add capacity.We believe that this
investment will help to avoid hiring approximately 100 personnel over two

"Although we have had some early disappointments with Thomas Medical related
to the unanticipated loss of a key customer, we have already adjusted our
production headcount to align demand with capacity," Lampropoulos said."We
remain committed to this business and believe as we 'Meritize' the product
line and add additional products from our R&D efforts we will build an
important component of our future growth. We intend to focus on the
electrophysiology (EP) portion of the business which continues to grow
worldwide even as cardiac rhythm management (CRM) business slows."

"Despite the foregoing discussion, substantial opportunities and optimism
prevail as we evaluate our business," Lampropoulos said."Our new product
pipeline is robust.Merit introduced the basixTOUCH™ inflation device in
Europe.This product reinforces our leadership position in this market segment
and is expected to be the largest single revenue producing product in Merit's
history.Recently we received preliminary allowance of a number of patent
claims and expect to receive our first patent on this important new product in
the next few months.We plan to launch the Bearing™ nsPVA embolization
particle next week at the GEST meeting, which will add a valuable component to
our embolic portfolio."

"Our Endotek division reached profitability for the first time this quarter
and is expected to continue to gain earnings momentum due to the substantial
reduction of costs of goods, which is already in place," Lampropoulos added.

"Going forward, we believe earnings will grow quarter over quarter,"
Lampropoulos continued."We are deeply engaged in substantially improving our
performance.We believe the worst of the storm is over, but a substantial
amount of work and effort remain.Our product pipeline, efficiency and
capacity are in place, and substantial cost-cutting is in progress.On the
other end of this effort will be a company we believe will be well positioned
to deliver higher gross and operating margins."

Selling, general and administrative expenses for the first quarter of 2013
were 30.9% of sales, compared to 30.9% of sales for the first quarter of

Research and development costs were 8.8% of sales for the first quarter of
2013, compared to 6.7% of sales for the first quarter of 2012, primarily due
to headcount additions forresearch and development to support new products,
personnel increases in the regulatory department to support registrations in
foreign countries to expand international product offerings, and research and
development costs associated with the integration of Thomas Medical.

Merit's effective tax rate for the quarter ended March 31, 2013 was -217.2%,
compared to 27.4% for the comparable period of 2012.Excluding the
reinstatement of the 2012 research and developed tax credit of approximately
$500,000, Merit's effective tax rate would have been 19.2% for the first
quarter of 2013.The decreased tax rate for the quarter ended March 31, 2013
was largely the result of a higher mix of earnings in foreign jurisdictions
(primarily Ireland), which are taxed at a lower rate than Merit's U.S.


Based upon information currently available to Merit's management, Merit
estimates that for the year ending December 31, 2013, absent extraordinary
transactions, Merit's revenues will be in the range of $445-$455 million, an
increase of approximately 13-15%, compared to revenues of $394.3 million for
the year ended December 31, 2012.Also, based on information currently
available to Merit's management, Merit estimates that, absent non-recurring
transactions, Merit's GAAP earnings per share for 2013 will be in the range of
$0.30-$0.36, compared to GAAP earnings per share of $0.46 for the year ended
December 31, 2012, and non-GAAP earnings per share of $0.50-$0.56.


Merit Medical invites all interested parties to participate in its conference
call today, April 25, 2013, 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 to call is
(877) 941-6009, and the international number is (480) 629-9866. A live
webcast, as well as a rebroadcast of the conference call, can be accessed
through the Investors page at or through the webcasts tab at

BALANCE SHEET                                                              
(Unaudited in thousands)                                                   
                                                March 31,   December 31,
                                                 2013        2012
Current Assets                                              
Cash and cash equivalents                        $9,017   $9,719
Trade receivables, net                           54,624    53,402
Employee receivables                             183       169
Other receivables                                2,561     2,672
Inventories                                      82,450    84,599
Prepaid expenses                                5,344     4,133
Prepaid income taxes                             1,233     1,250
Deferred income tax assets                       4,974     4,976
Income tax refunds receivable                    1,752     1,076
Total Current Assets                             162,138   161,996
Property and equipment, net                      243,530   234,803
Other intangibles, net                           115,915   118,131
Goodwill                                         175,108   175,108
Deferred income tax assets                       4,237     4,237
Other assets                                     11,211    11,034
Total Assets                                     $712,139 $705,309
Current Liabilities                                         
Trade payables                                   25,296    34,637
Accrued expenses                                 24,799    27,269
Current portion of long-term debt                10,000    10,000
Advances from employees                          627       551
Income taxes payable                             507       547
Total Current Liabilities                        61,229    73,004
Deferred income tax liabilities                  2,305     2,373
Liabilities related to unrecognized tax benefits 2,938     2,938
Deferred compensation payable                    6,237     5,956
Deferred credits                                 3,022     2,980
Long-term debt                                   244,254   227,566
Other long-term obligation                       8,822     8,915
Total Liabilities                                328,807   323,732
Stockholders' Equity                                        
Common stock                                     173,424   172,341
Retained earnings                                211,089   210,418
Accumulated other comprehensive loss             (1,181)    (1,182)
Total stockholders' equity                       383,332   381,577
Total Liabilities and Stockholders' Equity       $712,139  $705,309

INCOME STATEMENT                                                   
(Unaudited, in thousands except per share amounts)                 
                                            Three Months Ended
                                            2013       2012
SALES                                        $103,948 $95,618
COST OF SALES                                60,955    51,448
GROSS PROFIT                                 42,993    44,170
OPERATING EXPENSES                                     
Selling, general and administrative          32,128    29,547
Research and development                     9,108     6,441
Acquired in-process research and development --        175
Total                                        41,236    36,163
INCOME FROM OPERATIONS                       1,757     8,007
OTHER INCOME (EXPENSE)                                 
Interest income                              57        48
Interest expense                             (1,539)   (112)
Other expense                                (63)      (26)
Total other expense - net                    (1,545)   (90)
INCOME BEFORE INCOME TAXES                   212       7,917
INCOME TAX EXPENSE (BENEFIT)                 (459)     2,169
NET INCOME                                   $671     $5,748
EARNINGS PER COMMON SHARE-                             
Basic                                        $0.02    $0.14
Diluted                                      $0.02    $0.14
AVERAGE COMMON SHARES-                                 
Basic                                        42,520    41,999
Diluted                                      42,835   42,436

Although Merit's financial statements are prepared in accordance with
accounting principles which are generally accepted in the United States of
America ("GAAP"), Merit's management believes that certain non-GAAP financial
measures 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. The following
table sets forth supplemental financial data and corresponding reconciliations
to GAAP financial statements for the three-month periods ended March 31, 2013
and 2012. Readers should consider these non-GAAP measures in addition to, not
as a substitute for, financial reporting measures prepared in accordance with
GAAP. These non-GAAP financial measures exclude some, but not all, items that
affect Merit's net income. Additionally, these calculations may not be
comparable with similarly titled measures of other companies.

                                                           Three Months Ended
                                                            March 31,
                                                           2013      2012
Non-GAAP ADJUSTMENTS                                                
GAAP net income                                            $671    $5,748
Acquisition costs                                           467      67
Severance                                                   1,080    187
Fair value write-up of acquired inventory sold (a)          580      --
Long-term debt issuance charges                             199      --
Acquired in-process research and development                --       175
Amortization of intangible assets                                    
Cost of sales                                               2,363    994
SG&A expenses                                               1,118    888
Fair value adjustment to contingent consideration (b)       16       29
Income tax effect of reconciling items (c)                  (2,213)  (889)
Non-GAAP net income                                        $4,281  $7,199
Non-GAAP net income per share                               $0.10   $0.17
Diluted shares used to compute Non-GAAP net income per      42,835   42,436

Merit's non-GAAP income, after giving effect to the adjustments referenced in
the preceding table, does not reflect stock-based compensation expense of
approximately $459,000 and $555,000 for the three months ended March 31, 2013
and 2012, respectively.

(a) Increase in cost of goods sold related to the mark-up of finished goods
associated with Merit's integration of Thomas Medical's operations.

(b) Represents changes in the fair value of contingent
considerationliabilities related to recent acquisitions.

(c) Reflects an estimated annual effective tax rate of 38% on a non-GAAP


Founded in 1987, Merit Medical Systems, Inc. is engaged in the development,
manufacture and distribution of proprietary disposable medical devices used in
interventional and diagnostic procedures, particularly in cardiology,
radiology and endoscopy. Merit serves client hospitals worldwide with a
domestic and international sales force totaling approximately 200 individuals.
Merit employs approximately 2,750 people worldwide with facilities in Salt
Lake City and South Jordan, Utah; Angleton, Texas; Richmond, Virginia;
Malvern, Pennsylvania; Maastricht and Venlo, The Netherlands; Paris, France;
Galway, Ireland; Beijing, China; Copenhagen, Denmark; and Rockland,

Statements contained in this release which are not purely historical,
including, without limitation, statements regarding Merit's forecasted
revenues, net income, financial results or anticipated 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, 2012. 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 recent, proposed or future transactions;product recalls and product
liability claims; 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;
greater governmental scrutiny and regulation of the medical device industry;
reforms to the 510(k) process administered by the U.S. Food and Drug
Administration; compliance with governmental regulations and administrative
procedures; potential restrictions on Merit's liquidity or its ability to
operate its business by its current debt agreements; possible infringement of
Merit's technology or the assertion that Merit's technology infringes the
rights of other parties; 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 and regulations; laws targeting fraud and abuse in
the healthcare industry; potential for significant adverse changes in, or
failure to comply with, governing regulations; the effect of changes in tax
laws and regulations in the United States or other countries; increases in the
price of commodity components; negative changes in economic and industry
conditions in the United States and other countries; termination or
interruption of relationships with Merit's suppliers, or failure of such
suppliers to perform; fluctuations in Euro and GBP exchange rates; Merit's
need to generate sufficient cash flow to fund its debt obligations, capital
expenditures, and ongoing operations; concentration 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 health care markets related to health care reform initiatives;
failure to comply with applicable environmental laws; changes in key
personnel; work stoppage or transportation risks; uncertainties associated
with potential healthcare policy changes which may have a material adverse
effect on Merit; introduction of products in a timely fashion; price and
product competition; availability of labor and materials; cost increases;
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, 2012 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 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

CONTACT: Anne-Marie Wright, Vice President, Corporate Communications
         Phone: (801) 208-4167
         Fax: (801) 253-1688

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