
Merit Reports Strong 3Q23 and Raises Full Year Outlook; Notes CEO Succession Plan Likely to be Announced by Year End
10/27/23 (written by: Scott Gleason) Merit Medical Systems announced financial results for the third quarter ended September 30, 2023 with reported revenue of $315.2 million, marking a 9.8% increase compared to the same period in 2022. The street had been forecasting 3Q23 revenue of $306.3 million.
Merit’s revenue was buoyed by strong performances from its Cardiovascular segment, with total revenue of $306.1 million for the third quarter of 2023, showing a 9.7% increase on a constant currency basis. On the call the company noted the strong growth in its peripheral intervention segment was driven by its Scout radar localization and drainage products which grew 19% in the quarter and provide half of the revenue for this subsegment. The company noted that revenue included $7.3 million from the acquisition of AngioDynamics which it completed in June.
Merit also noted on the call the company has completed enrollment in the WRAPSODY Arteriovenous Access Efficiency (WAVE) pivotal study, a prospective, randomized, multi-center study. This study aims to compare the Merit WRAPSODY Cell-Impermeable Endoprosthesis with percutaneous transluminal angioplasty for treating stenosis occlusion in the venous outflow circuit in hemodialysis patients. The study enrolled 244 patients with arteriovenous fistulas and grafts in multiple countries. Data collection will continue, with primary endpoint data for the last enrolled patient expected in February 2024. Merit Medical plans to submit primary outcomes to the FDA for Premarket Approval (PMA) by the end of Q2 2024.
In the Endoscopy segment, which includes Endoscopy Devices, Merit reported revenue of $9.1 million for the third quarter.
Merit Medical also demonstrated improved profitability in the third quarter of 2023. The company’s non-GAAP operating margin* increased to 18.3%, compared to 16.1% in the third quarter of 2022. This led to strong growth in non-GAAP EPS which were $0.75, compared to $0.64 in the same period last year. Analysts were forecasting non-GAAP EPS of $0.65 for the quarter.
Due to the strong performance in the third quarter, Merit Medical has raised its fiscal year 2023 financial guidance. The company now expects net Sales of $1.242 – $1.251 billion, reflecting an 8% – 9% increase from the previous year. The company had been previously calling for revenue of $1.230 to $1.244 billion. The company is also calling for non-GAAP EPS of $2.93 – $2.99.
Fred P. Lampropoulos, Merit’s Chairman and Chief Executive Officer, expressed satisfaction with the company’s third-quarter performance, emphasizing that it exceeded expectations. He noted that the growth was driven by the broad-based strength in their primary product categories, particularly in the United States.
Mr. Lampropoulos also noted on the call that the Board is currently undergoing a succession planning process for the CEO role, which is expected to be complete by year end.