MERIT MEDICAL SYSTEMS INC Q1 FY2025 earnings call

· First quarter total revenue up 9.8% GAAP and 10.9% constant currency; non-GAAP operating margin 19.3% (up 230bps), non-GAAP EPS up 15%. · Contributions from acquisitions of Cook Medical and EndoGastric Solutions. · Gross profit up 15%, gross margin 53.4% (up 251bps) due to mix, pricing, and cost improvements. · Operating expenses up 10.5%, operating income up 25% to $68.4M. · US WRAPSODY CIE revenue expected $7M-$9M in 2025, progress on NTAP submission with CMS proposing new technology add-on payments.

Total revenue was $355.4 million, up 9.8% year-over-year on a GAAP basis and 10.9% on constant currency. Cardiovascular segment sales grew 9%, with cardiac intervention products up 12% (including acquisitions); excluding acquired products, organic constant currency growth was 6.2%. Endoscopy segment sales grew 64% due to acquisitions, with organic growth flat excluding acquired products. US sales were up 14% constant currency, international up 6% year-over-year; China sales down 10% due to macroenvironment and volume-based procurement.

· Revenue: GAAP net revenue 8%-10% growth, constant currency 8.7%-10.2% excluding FX; Cardiovascular 7%-9%, Endoscopy 34%-37%; inorganic revenue from acquisitions $45M-$46M. · EPS: Non-GAAP EPS $3.29-$3.42 (down from prior) due to tariffs; $26.3M tariff impact on COGS, 45% mitigation possible by 2026. · Free Cash Flow: At least $150M in 2025, CapEx $90M-$100M. · Second Quarter: Total revenue GAAP 8.6%-11.1%, constant currency 8.7%-11.2%; non-GAAP operating margin 17%-18.75%, EPS $0.80-$0.90.

· Tariffs: Uncertainty from trade policies, $26.3M impact with 94% related to China. · China Market: Quarterly variability due to volume-based procurement and macroenvironment. · Endoscopy: Potential sales force integration disruptions in the second half.

Q: What are the tariff mitigation efforts?

A: Mitigation includes CGI initiatives, redirecting shipments, building inventory in Mexico, with 45% potential offset by 2026.

Q: How is the China market demand?

A: Softness due to macroenvironment, not specific trade tensions, volume-based purchasing in line, no change to full-year China outlook.

Q: How does the tariff impact EPS?

A: $26.3M tariff impact, 94% related to China, 83% of impact in second half if current trends continue.

Q: What's driving OEM growth?

A: Strong US demand, driven by new accounts, quality, reliability, not inventory pull-forward due to tariffs.

Q: What's the status of WRAPSODY?

A: Excited about product, progress on NTAP, one-year data at SIR, positive impact internationally.