Merit Medical Systems, Inc. MMSI reported fourth-quarter 2024 adjusted earnings per share (EPS) of 93 cents, up 25.7% from the year-ago quarter. The bottom line surpassed the Zacks Consensus Estimate by 12.1%.
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GAAP EPS for the quarter was 46 cents, down by a penny year over year.
Full-year 2024 adjusted EPS was $3.46, up 21.4% from the comparable year-ago period. The metric topped the Zacks Consensus Estimate by 2.7%.
MMSI’s Revenue Details
Revenues grossed $355.2 million in the reported quarter, up 9.4% year over year on a reported basis. The metric topped the Zacks Consensus Estimate by 0.9%.
Total revenues at constant exchange rate (CER) increased 10.1% year over year, whereas CER, organic revenues increased 6.1%.
Per management, the better-than-expected total revenues at CER were driven by strong organic growth with contributions from acquired products.
Full-year 2024 revenues were $1.36 billion, reflecting a 7.9% increase from the comparable 2023 figure on a reported basis. The metric beat the Zacks Consensus Estimate by 0.7%.
Shares of this company gained nearly 2.7% in today’s pre-market trading.
Merit Medical’s Geographic Results
The U.S. sales amounted to $213.5 million, which increased 13.3% year over year on a reported basis and 13.6% at CER. This figure compares to our fourth-quarter projection of $207.1 million.
Per management, MASI continued to witness strong demand from U.S. customers in the fourth quarter.
International sales amounted to $141.6 million, up 4.2% year over year on a reported basis and 5.3% at CER. This figure compares to our fourth-quarter projection of $138.9 million.
Revenues from the Asia-Pacific region were $60.9 million (up 2.2% and 2.8% year over year on a reported basis and CER, respectively). This figure compares to our fourth-quarter projection of $56.4 million.
Revenues from Europe, the Middle East and Africa (EMEA) region were $65.1 million (up 3.7% and 3.5% year over year on a reported basis and CER, respectively). This figure compares to our fourth-quarter projection of $70.5 million.
Revenues from the Rest of World region were $15.6 million (up 15.3% and 24.6% year over year on a reported basis and CER, respectively). This figure compares to our fourth-quarter projection of $11.9 million.
MMSI’s Segmental Details
Merit Medical operates through two segments — Cardiovascular and Endoscopy.
The Cardiovascular unit reported fourth-quarter revenues of $337.7 million, up 7.1% on a reported basis and 7.8% at CER year over year. This figure compares to our segmental projection of $327.8 million for the fourth quarter.
The Cardiovascular segment includes the following product categories: Peripheral Intervention (PI), Cardiac Intervention (CI), Custom Procedural Solutions (CPS) and original equipment manufacturer (OEM).
PI product line revenues were $140.4 million, up 4.6% on a reported basis and 5.5% at CER year over year. This compares to our projection of $143.3 million.
CI revenues of $95.7 million rose 6% on a reported basis and 6.9% at CER year over year. This compares to our projection of $91.7 million.
CPS revenues improved 3.2% on a reported basis and 3.5% at CER year over year to $51.2 million. This compares to our projection of $49.8 million.
OEM revenues improved 22.4% on a reported basis and 22.5% at CER year over year to $50.4 million. This compares to our projection of $43 million.
Endoscopy devices’ revenues totaled $17.5 million, up 87.9% year over year on a reported basis and 88.1% at CER. This figure compares to our segmental projection of $18.2 million for the fourth quarter.
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
Merit Medical’s Margin Analysis
In the quarter under review, Merit Medical’s gross profit increased 14.9% year over year to $172.9 million. The gross margin expanded 232 basis points (bps) to 48.7%. We had projected a 46.9% gross margin for the fourth quarter.
Selling, general & administrative expenses increased 16% year over year to $111.1 million. Research and development expenses rose 16.4% year over year to $25.2 million. Adjusted operating expenses of $136.3 million rose 16.1% year over year.
Adjusted operating profit totaled $36.7 million, reflecting a 10.8% increase from the prior-year quarter. The adjusted operating margin in the fourth quarter expanded 13 bps to 10.3%.
MMSI’s Financial Position
Merit Medical exited 2024 with cash and cash equivalents of $376.7 million compared with $587 million at 2023-end. Total long-term debt at the end of 2024 was $729.6 million compared with $823 million at 2023-end.
Cumulative net cash provided by operating activities at the end of 2024 was $220.8 million compared with $145.2 million a year ago.
Merit Medical’s Guidance
MMSI has initiated its outlook for 2025.
Net revenues for 2025 are projected to be between $1.470 billion and $1.490 billion (reflecting an increase of 8.4-9.8% on a reported basis and 8.6-10.1% at CER over the comparable reported figures of 2024). The Zacks Consensus Estimate stands at $1.47 billion.
Net revenues from the Cardiovascular segment are expected to be in the range of $1.395 billion-$1.413 billion (representing an increase of 7-9% over the comparable reported figures of 2024).
The Endoscopy segment’s net revenues are projected to be between $74.6 million and $76.7 million (representing an increase of 36-40% over the comparable reported figures of 2024).
Adjusted EPS for 2025 is projected to be in the range of $3.58-$3.70 (representing an increase of 4-7% over the comparable reported figures of 2024). The Zacks Consensus Estimate is pegged at $3.75.
Our Take
Merit Medical exited the fourth quarter of 2024 with better-than-expected results. The year-over-year uptick in the top line and bottom line was impressive. The company saw revenue growth in both its segments and across all the product categories within its Cardiovascular unit. Robust performances in the United States and outside were impressive. The expansion of both margins bodes well for the stock.
During the quarter, Merit Medical completed the acquisition of lead management portfolio of medical devices and certain related assets from Cook Medical Holdings, LLC and substantially completed integration of the production, distribution and sale of the EsophyX Z+ device previously acquired from Endogastric Solutions, Inc. It also announced the FDA’s premarket approval of the Wrapsody Cell-Impermeable Endoprosthesis device, which is intended to extend long-term vessel patency in dialysis patients. These look promising for the stock.
However, during the quarter, sales in the EMEA region were softer than expected by MMSI, due to softness in Russia and distributor markets. The tariff situation and potential retaliatory measures by other countries remain unclear, which further raises our apprehension.
MMSI’s Zacks Rank and Other Key Picks
Merit Medical currently has a Zacks Rank #2 (Buy).
A few other top-ranked stocks in the broader medical space that have announced quarterly results are Cardinal Health, Inc. CAH, ResMed Inc. RMD and Boston Scientific Corporation BSX.
Cardinal Health, carrying a Zacks Rank #2, reported second-quarter fiscal 2025 adjusted EPS of $1.93, beating the Zacks Consensus Estimate by 10.3%. Revenues of $55.26 billion outpaced the consensus mark by 0.7%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Cardinal Health has a long-term estimated growth rate of 10.7%. CAH’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 9.6%.
ResMed reported second-quarter fiscal 2025 adjusted EPS of $2.43, beating the Zacks Consensus Estimate by 5.7%. Revenues of $1.28 billion surpassed the Zacks Consensus Estimate by 1.6%. It currently carries a Zacks Rank #2.
ResMed has a long-term estimated growth rate of 16%. RMD’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 6.9%.
Boston Scientific reported fourth-quarter 2024 adjusted EPS of 70 cents, beating the Zacks Consensus Estimate by 7.7%. Revenues of $4.56 billion surpassed the Zacks Consensus Estimate by 3.5%. It currently carries a Zacks Rank #2.
Boston Scientific has a long-term estimated growth rate of 13.3%. BSX’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 8.3%.
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