EX-99.1 3 ex99no1.txt NEWS RELEASE Exhibit 99.1 [logo/logotype]MERIT MEDICAL 1600 West Merit Parkway o South Jordan, UT 84095 Telephone: 801-253-1600 o Fax: 801-253-1688 PRESSRELEASE -------------------------------------------------------------------------------- FOR IMMEDIATE RELEASE Date: February 19, 2004 Contact: Anne-Marie Wright, Director, Corporate Communications Phone: (801) 208-4167 e-mail: awright@merit.com Fax: (801) 253-1681 ----------------- MERIT MEDICAL REPORTS RECORD NET INCOME AND SALES FOR THE YEAR ENDED DECEMBER 31, 2003 SOUTH JORDAN, UTAH - Merit Medical Systems, Inc. (NASDAQ:NMS:MMSI), a manufacturer and marketer of proprietary disposable products used in cardiology and radiology procedures, reported record net income of $17.3 million, or $0.64 per share, for the year ended December 31, 2003, compared with $11.3 million, or $0.43 per share for the 2002 year, an increase of almost 53%. Net income for 2003 includes a non-recurring gain from the settlement of a legal dispute and sale of land of approximately $627,000 (net of tax), or $0.02 per share, which occurred in the first and second quarters of 2003. Merit's revenues for the year ended December 31, 2003 were a record $136 million, compared with $116.2 million for the same period in 2002, an increase of approximately 17%. Revenues for the quarter ended December 31, 2003 were a record $35.1 million, up 19.4% compared with $29.4 million for the fourth quarter of 2002. Net income for the quarter ended December 31, 2003 was a record $4.7 million, or $0.17 per share, compared with $3.2 million, or $0.12 per share, in the fourth quarter of 2002, an increase of 49%. Sales of every category of Merit's products grew in 2003, compared to 2002. Custom kit sales and stand-alone product sales increased by approximately 19%; inflation device sales grew by 17%; and catheter sales rose by 9%. 1 Increases in revenue for the fourth quarter of 2003, compared to the fourth quarter of 2002, resulted primarily from across-the-board growth in sales of Merit's medical devices, as follows: custom kit sales rose 27%; catheter sales increased 20%; inflation device sales grew 17%; and stand-alone sales rose 14%. "We are pleased to report a record quarter and a record year," said Fred P. Lampropoulos, Chairman and CEO of Merit. "We continued to generate higher sales over a relatively fixed expense base with increased efficiencies and employee productivity gains. Our earnings rose 53%, while our cash balance at December 31, 2003 rose to $30.2 million, an increase of 212% from $9.7 million at December 31, 2002. "In 2004, we anticipate that we will benefit from new product introductions and productivity gains," Lampropoulos added. "We are also planning to break ground on an 180,000 square foot facility that would increase our manufacturing space by approximately 50%." Merit's gross margin improved to 44.7% in 2003, compared to 41.7% in 2002. Gross margin for the fourth quarter of 2003 improved to 46.4%, compared with 43.4% for the fourth quarter of 2002. This improvement was largely due to higher production volumes, employee productivity improvements and cost-saving programs, which were achieved during 2003. Total operating expenses for 2003 decreased as a percentage of sales to 25.8%, compared to 27.3% in 2002. For the fourth quarter of 2003, total operating expenses decreased as a percentage of sales to 25.8%, compared to 27.9% for the same period in 2002. Selling, general and administrative expenses declined as a percentage of sales to 22.4% for the three and twelve months ended December 31, 2003, compared to 24.1% and 23.9% for the three and twelve months ended December 31, 2002, respectively. Research and development expenditures were 3.4% of sales for the three and twelve months ended December 31, 2003, compared to 3.8% of sales for the fourth quarter of 2002 and 3.4% of sales for the year 2002. Income before income tax expense rose by 61% to a record $27.0 million in 2003, compared to $16.8 million in 2002. For the fourth quarter of 2003, income before income tax expense rose by 59% to a record $7.4 million, compared to $4.6 million for the fourth quarter of 2002. The Company's overall effective tax rate increased to 36.0% in 2003, compared to 32.5% in 2002. For the fourth quarter of 2003 the Company's effective tax rate was 36.4%, compared to 31.8% for the comparable period of 2002. The increase in the effective tax rate was primarily the result of lower taxable income for the three and twelve months ended December 31, 2003, for the Company's Irish operations, which are taxed at a lower rate than U.S. operations. Merit said it currently expects revenues and earnings per share for the year ending December 31, 2004 to be in the range of $152-155 million, and $0.70-0.73, respectively. 2

INCOME STATEMENT ---------------- 3 Mos. Ended 12/31 12 Mos. Ended 12/31 --------------------------- -------------------------- 2003 2002 2003 2002 ----------- ----------- ----------- ----------- (in thousands except share data) REVENUE $ 35,128 $ 29,425 $ 135,954 $ 116,227 COST OF SALES 18,833 16,651 75,230 67,712 GROSS PROFIT 16,295 12,774 60,724 48,515 OPERATING EXPENSES: Selling, General and Administration 7,861 7,078 30,468 27,732 Research and Development 1,205 1,132 4,627 4,008 TOTAL OPERATING EXPENSES 9,066 8,210 35,095 31,740 OPERATING INCOME 7,229 4,564 25,629 16,775 OTHER EXPENSE- (INCOME) (142) (63) (1,394) 13 PRETAX INCOME 7,371 4,627 27,023 16,762 INCOME TAX EXPENSE 2,685 1,471 9,728 5,452 NET INCOME 4,686 3,156 17,295 11,310 EARNINGS PER COMMON SHARES: BASIC $ 0.18 $ 0.13 $ 0.68 $ 0.47 DILUTED $ 0.17 $ 0.12 $ 0.64 $ 0.43 AVERAGE COMMON SHARES: BASIC 25,844,394 24,582,720 25,401,445 24,226,095 DILUTED 27,615,738 26,585,140 27,033,964 26,238,449

3 BALANCE SHEET 12/31/03 12/31/02 -------- -------- (in thousands) ASSETS CASH $ 30,204 $ 9,684 TRADE RECEIVABLES (NET) 17,728 15,247 INVENTORIES 21,269 18,699 OTHER CURRENT ASSETS 2,260 2,538 -------- -------- TOTAL CURRENT ASSETS 71,461 46,168 PROPERTY & EQUIPMENT (NET) 29,197 25,412 OTHER ASSETS 6,643 6,725 -------- -------- TOTAL ASSETS $107,301 $ 78,305 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY TOTAL CURRENT LIABILITIES $ 14,530 $ 11,586 OTHER LIABILITIES 4,527 3,303 LONG-TERM DEBT 0 17 STOCKHOLDERS' EQUITY 88,244 63,399 -------- -------- TOTAL LIABILITES AND STOCKHOLDERS' EQUITY $107,301 $ 78,305 ======== ======== CONFERENCE CALL Merit Medical Systems, Inc. invites all interested parties to join its officers in their quarterly and year-end earnings conference call and 2004 guidance to be held today, February 19, 2004, at 5:00 p.m. Eastern Time (4:00 p.m. Central, 3:00 p.m. Mountain, and 2:00 p.m. Pacific). During the conference 4 call, the results of operations for the year and quarter ended December 31, 2003, will be discussed in more detail, along with the Company's expectations for 2004 and trends that may affect its future results. The telephone numbers are: Domestic: (800) 218-0204, and International: (303) 205-0033. A rebroadcast will be available through February 19, 2005, on the Internet by accessing the CCBN logo under "Webcasts" at www.merit.com or at www.ccbn.com. ABOUT MERIT Founded in 1987, Merit Medical Systems, Inc. is a publicly traded company engaged in the development, manufacture and distribution of proprietary disposable medical products used in interventional and diagnostic procedures, particularly in cardiology and radiology. Merit serves client hospitals worldwide with a domestic and international sales force totaling approximately 70 individuals. Merit employs approximately 1,240 people worldwide, with manufacturing facilities in South Jordan and Salt Lake City, Utah; Santa Clara, California; Angleton, Texas; and Galway, Ireland. For more information about Merit, visit www.merit.com. Statements contained in this release which are not purely historical are forward- looking statements within the meaning of the Private Securities Litigation 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, 2002. Such risks and uncertainties include introduction of products in a timely fashion, market acceptance of new products, cost increases, fluctuations in and obsolescence of inventory, price and product competition, availability of labor and materials, development of new third-party products and techniques that render the Company's products obsolete, delays in obtaining regulatory approvals, potential product recalls, foreign currency fluctuations, changes in health care markets related to health care reform initiatives, litigation and other factors referred to in the Company's 10-K and other reports filed with the Securities and Exchange Commission. All subsequent forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these cautionary statements. Actual results 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. # # # 5