Merit Medical Systems (MMSI) 27 Oct 222022 Q3 Earnings call transcript

Good day and thank you for standing by. Welcome to the Merit Medical Systems Third Quarter 2022 Earnings Conference Call. [Operator Instructions] Please be aware that today’s conference is being recorded. I would now like to hand the conference over to your speaker today Fred Lampropoulos. Please go ahead.

everyone, XXXX Medical earnings welcome, of third and year fiscal conference you to System’s Merit quarter Thank call. our Treasurer; I’m by joined Brian and Raul today Officer Lloyd, and Parra, our Corporate on Chief Financial the Secretary. Chief Legal call and Officer you through the mind provisions, Safe us taking would Harbor please? Brian,

like remind receive under protection Safe that Fred. presentation this laws. you, Thank to contains I Harbor federal would everyone forward-looking that securities statements

and subject uncertainties. are statements realization based reasonable to forward-looking unknown these these currently are risks events or of as believe we any company, transactions Although uncertainties, impacting to results anticipated. from well The differ actual extraordinary assumptions, of those upon or our they risks cause materially could as

today, as section XXXX relied We by In update not Please statements, be our October representing specifically should to such statements. refer recent filings Forward-Looking such a refer from addition, actual any as most forward-looking our as except XX, entitled results disclaim important represent could Statements any to that and other statements. upon statements as the forward-looking Please to to SEC regarding our views factors for required of views presentation Cautionary these discussion with obligation for date. law. any of information the cause applicable only today’s also in Regarding of differ Statement

are Our in with in accepted generally which United financial the prepared principles are statements accounting States. accordance

Readers our most financial also may this useful measures in and should X-K. investors measures of in measures included of However, of prepared regarding comparisons a to SEC be discussed regarding addition presentation reconciliation believe This Measures in for to accordance our of non-GAAP can we Investors titled non-GAAP companies. calculations consider Non-GAAP will today’s as presentation Form and with the Please underlying measures directly U.S. to, turn reporting comparable GAAP information not our call. release operations. Fred. information A financial the release Both is refer GAAP. section are Financial under operations measures. on page these useful business such furnished certain the to the non-GAAP press for provide that measures and financial presentation the comparable of call important not ongoing financial note with I Please financial and on measures the with financial of to measures our today’s available now trends non-GAAP performance website. entitled certain contains back other be non-GAAP for, substitute presentation press similarly period-over-period

a our with you, let formal Brian. review what overview press remarks, our well release, start remarks. the And quarterly third more of I prepared condition. of you will me during an guidance will sheet with Thank we my updated revenue XXXX and provide we better-than-expected start that with financial results Raul for our brief as results cover balance quarter. After as financial of agenda summary a the opening of and will our for in-depth financial in today’s a

reported questions. performance, year-over-year. up revenues your of a for Beginning revenue then our call will We with second quarter, X.X% total million the $XXX quarter we third the open review in of GAAP

and revenue a growth driven sales. growth X.X% in in sales GAAP total was Our international by U.S. growth X.X%

excluding exceeded results quarter growth the earnings second constant growth to compared Our that in exchange in related constant currency quarter the revenue on to changes an the in third year period. to total revenue GAAP that XX.X% increased we the discussed basis, revenue expectations our organic We our headwind year-over-year prior currency call. delivered rates

stronger APAC by X% to and in in better revenue constant sales demand anticipated the the our solid of currency than a in revenue particularly than constant were more quarter U.S. favorable X. team, international in EMEA range driven results and expected trends, for reasons. expectation our the anticipated shared we year-over-year than currency execution The X% from Specifically, growth

rates with provide of the all primary growth our GAAP available and Unless are me year-over-year performance results you our currency and beginning in non-GAAP let and website. approximated related in to sales our are more reconciliations with Now, categories. a basis. our included a press revenue reportable from detailed product on review release We’ve each constant otherwise in quarter, our a third presentation reported item of stated, results on

cardiovascular representing XX% of total by the driven Sales and of endoscopy was growth products cardiovascular in again increased revenue peripheral driver total segment our growth this in largest XX%, growth XX% segment growth quarter segment. Third in our our intervention quarter.

of sales by the packs, intervention representing in cardiovascular of XX% was Within in Intervention the sales of and the growth increased double sales SCOUT and and products. growth. sales half Localization Intervention and in and our a X angiography the biopsy our of together largest growth Cardiac represented PI map products, PI and year-over-year total growth our by of total of the increase growth PI represented low and embolics our together our are portion teams PI respectively, the nearly contributor each our products inflation impressive. driven total roughly sales our category, products X which XX% in primarily largest XX% XX% products driven access in angioplasty sales growth was and year-over-year. quarter growth segment increase second product notable in cardiac XX% devices. digits of the of category, makes intervention to mid basic quarter business X/X even and more XX%, intervention products, growth sales increased our growth Radar of Within

else demand for hemostatic our anywhere than The our our sales the X. expectations EP by and our in growth and strong needles. products in Sales PhD band strong in of quarter increased We XX% business XX% quarter OEM valve in hearts of driven our for our also and products sheets, saw was snap CRM transseptal products sheets more outperformed demand X.

of multiple categories fluid challenge type precision. including we the this from a performance that quarterly But kits, in Some customers cardiac reflects demand function business quarter improvement this coatings of management. access and believe continued larger third with revenue is in predicting of

surprise, X% guidance. While OEM modestly declined growth to flattish certainly in our relative the a positive and reforming our sales of assumed CPS was growth products

sales party in assumed manufacturer. Recall disruption increased segment, Finally, quarter XX% our segment on in our at sales guidance given wider our X end had our a the range, range X provided endoscopy potential we call. quarter contract growth a third issues endoscopy the the quarter high to with notably business of in of that

call was. demand We delivered and it managed results endoscopy indicated product viewed X of esophageal our As was the at esophageal transition quarter our to transitory we range. on disruption both high stance. Elation growth and driven sales end endo strong for covered balloon this note the our Max by growth Of is indeed fully the

to basis. our a on geographic sales brief a turning of performance summary Now

in continued represent all Our third U.S. and growth high customers quarter, sales quarter. expected of growth expectations, XX% quarter and the growth of trends X% strong the this the our total year-over-year. reflecting represented OEM U.S. currency U.S. end constant and execution in increased in revenue of came improving U.S. the contributor largest company the end overall Sales better the at endoscopy PI, our our performance CI to above expectations than to came high in standout this

and and the global EMEA three year-over-year quarter, is environment X. regions quarter our the quarter sales which Our in performance the challenging strong mid of the light increased posted sales XX% specifically, in XX% macro international XX% APAC, major in in growth of to third XX%, year-over-year. high third regions world teens in of All the respectively increased rest

with all and in primarily driven seeing and PI UK, customers grow regions Western Middle which specifically Europe, Eastern demand than driven by of demand the of is for based XX% EMEA world from our While demand region offsetting CI also in strong China, are our growth by high our to than driven Europe, and we XX% headwind more rest lastly EMEA continued the was of year-over-year teens And was was expectations, from purchasing. growth volume encouraged growth of ahead particularly exceeded related more the expectations, France, execution of by three which in marked growth team strong improving delivered the APAC summary, our strong in environment, operating are markets. the upside. international and end where challenging growth and in East quarter by the and we product, Brazil. mid proud Canada, In another the customers guidance in despite by APAC trends Italy. Germany,

on Raul, I to over to in comment few items call wanted the the other turn quarter. noteworthy a I before Now

quarter delivered improvement another impressive cash X. of free generation quarter First, and flow margin expansion profitability in we

and XX% non-GAAP in non-GAAP income respectively gross non-GAAP income X%, Our and quarter net profit, XX% year-over-year X. operating increased

We organic $XXX a in the year operating of represent which period revenue the long reminder year-over-year at XX, to least that free currency margins points increase CAGR free than program margin non-GAAP results three profile. targets generated to XXXX call our in enhancing ending we of non-GAAP and believe to increased at million flow over executing XX% financial constant growth of outlined remain the We flow goal XXXX the evidence And Our term cash financial committed growth cumulative basis X% at are for more foundation’s quarter. of December months nine and generated least of cash Merit’s for $XX XXX we towards operating our XX.X%. by that for of of way we profitability the clear first million.

been to wanted clearance key strategic one our products. area of the highlight initiatives, has where executing specifically, another team of development our I and new commercialization towards Second, well

to products roadster balloons announced pocket. can launch revolutionary offers provides and legs and high and X.X prevalence visibility narrowing use there cool heart will builds launch and call that as variety condition we care Prelude The size ongoing blood that focus cardioverter prevents in strong we products. detect In critical in of from and PAD. to unique with biopsy of merits sites or patients Elation well nodes, device need range is the and in diagnose airways. soft accurately August, specific available Prelude tissue same system. of that are multistage we soft indicated diameter we the One areas. match lab resilience balloon on tissue The anatomies addition advancement procedures of for which in treat new The a vessel. and environment. as represents original the for proud compression where lesions. a safeguard In accuracy elite a improving other new four large commitment of airways can PAD often our labs performed discussion access that too use lungs, press of cooling procedures continued fits pulmonary launch performance, pulmonary risk locations introducers our and in devices, sheet. open terminal device. an commitment such the balloon cool soft were vessel artery also focus of dilators continued releases the for updates, too lymph be patients. balloon it procedures broad announced in with physicians We development, balloon with happens in areas, in U.S. procedures new allows solution long space. across the is more portfolio, roadster July, access Roadster of cardiovascular products To launch upon blocked and to these elite peripheral amputation. safeguard the or late configuration and single addition single I’m and portfolio pacemaker of execution, addition products of the highlighted sefibrillator and of terminal an X marriage help not lung, surgical our newest quarter. configurations. guide of indicated lower And use pulmonary blockage PAD over peripheral example dilator. PAD is deliverability, failure, team’s to September, to flow liver, device the vessels, physicians configuration Historically, compression compression a small as twofold with progress we the third version length new the of used marriage in stage these suspect easy that comprehensive September, our its Rowson patients. basket of more and but the have which to other increased suffering latest and smallest estimated accessories. believe to hemostasis associated relied This aimed smaller implantable designed diagnose our aged In of a the peripheral clearance refrigeration, and the safeguard that the ideal shortage to the bringing to terminal of vascular The at treat XX limb in in the In the post elite notable and torturous help nation. is including our mainly announced the This as these does to tissue of finally, a four to of the to extremities is offered another making biopsy use the kidney assist disease the older deliver quarter serious options people new this a to million idea devices believe for commercialization prepare require portfolio announced treatment Prelude pathology is kit, diagnostic various The the focus, with in for areas make includes and to device biopsy we

of said, third with me we guidance Now our release. quarter will updated and that financial today’s turn detailed through Parra? XXXX review to our press which Raul, in call take financial who Mr. over the you a results let

you, Thank Fred.

Given rest revenue a begin of Fred’s results, detailed review the of I discussion across financial our P&L. of performance the will our with

of focus of otherwise company’s on my results quarter For doubt third avoidance the year commentary the during XXXX. unless non-GAAP the fiscal will noted,

reporting and results available in non-GAAP increased quarter. the third on approximately website. X% reconciliations from presentation related items release our We have press profit included our year-over-year in Gross GAAP our to

gross Our for year variances. to primarily XX.X% prior year-over-year compared to XX.X% gross margins third variances price due The XX margin the purchase in was manufacturing was unfavorable point quarter in the period. decrease basis specifically

period. experienced we year compared freight higher the costs expected, prior As to

effective and air to back to more to continue mix a orders higher We delayed demand a led meeting customer mandating and cost has prioritize back alternative. which transition shipments of the ocean

year-over-year raw our from third labor higher assumed we freight inflationary basis results expected, roughly non-GAAP our represented costs year-over-year in and logistics, headwinds guidance while material points on the raw expected quarter incremental of freight, quarter Similar and what our higher expense expenses, third to logistics included gross our freight headwinds to materials. headwinds results logistics in seeing increasingly which XX than and raw each reflect As in experienced materials, of a are we basis. QX margins and

SG&A operating expenses decrease the quarter to of X% increased year-over-year increase increase period. driven X% the was third expense. quarter by Third The a compared in a to and XXXX. in in operating prior R&D Compared expense expense X%

Total XX.X expense income operating expense expected XX% third in than prudent QX the quarter reflects increased performance was and to million, X.X year-over-year Our management. operating million. better continued or in

the compared decreased by year year-over-year prior QX gross expense was in non-GAAP XXX our driven XX operating XX.X% Our point compared period. change prior for basis in margin partially by to operating basis non-GAAP reduction margin margin the was our margin. offset in operating XX.X% to The the point in period,

expense interest million decreased currency other net from expense effective interest due to last losses was prior the quarter change related other net compared increased was to expense in partially and a X.X by realized Third rate period, higher offset the year, year-over-year. to expense foreign unrealized primarily compared to XXX,XXX

compared share, prior to net $X.XX year income or XX.X or was $X.XX XX per share Third in per the point quarter million million period.

we calls EPS. of net diluted exceeded with share in year-over-year for in guidance range, high We non single low digit are both of third our earnings growth per XX% very quarter, the our income GAAP which and and performance net end pleased income the profitability where delivered

million, of Total XX% the sales months XX period, financial or over returning review brief basis of of financials September profit compared point year-over-year. XX.X year-over-year, results of months our first a of to X% XX% brief for million currency representing nine prior to review to a XXX XXX.X growth decrease constant the Turning in to XX, a approximately Gross XX.X% basis. million to nine ended sales on our increased year-over-year XXXX. revenue the up was

XX.X% the materials, have to increased year-over-year. XXX A growth we gross logistics. sales basis majority our program and team’s incremental in representing freight year inflationary foundations the are XX% XXX.X a prior the the million benefits headwinds early The reason seeing dedication period. that more primary to -- to pressures our the have related these points to Operating year. XXX to offset to inflationary result of as hard basis were and profit compared of XX.X% point managed our we of first increase this headwinds than raw gross margin to compared we margins Now of experienced to year-over-year for sales of work and

prudent growth $X.XX strong management, leverage to increased operational prior XXXX. than XXX. which $X.XX growing of nine operating compared driving per or period. months share or are We revenue is per income share in the faster the to first profit year-over-year over million expense XX.X million X in through resulting Net XX%

review and XX, of condition, and Turning million XXXX XXX and of financial XX.X cash approximately XX.X million cash into a balance XXX of million available to of approximately million XX, This September of long term our XXX available debt we had borrowing debt approximately hand capacity cash equivalents sheet of approximately term as and of borrowing obligations capacity on XXXX. of million compares obligations as long of million. December XXX

generation the basis. in Our quarter in of to generation $XX quarter. of investments times of profitability quarter strong with resulted working in XX, cash ratio third combined XXXX the flow performance the strategic net respect third capital third September flow as With free X.X was an adjusted leverage on our strong cash million our in

we in of customer invest proactively million prior capital to use free high to discussed our of strategy working the safety In recent levels. $XX for our cash flow XXXX. increase free compared requisite periods. expected, ended balances months during September service We ensure XX, quarters generated our the stock inventory to nine build have As and cash the

investments track generating free cash year our We on that Of of the to in to XXXX. investments are million growth of and free in range the note, to our this at CapEx generation flow cash foundations to this XX deliver million XXXX. for planned goal and of flow XX expect remain continue XX strong assumes expected cash to million least drive target related flow in free programs

XXXX today’s press of which Turning financial in release. fiscal we review to our updated guidance, year

approximately the assumes ended GAAP as GAAP currency revenue now the incremental growth prior the months XX XX.X our guidance expect a GAAP GAAP revenue revenue range in revenue X.X% to $X.XX net an headwind With to now we XXXX segment decline X.X%. basis realized guidance a net guidance expected headwind compared which GAAP of to balance the per million to This $X.XX to to to X.X% XX.X of compared range revenue $X.XX year-over-year. prior for FX impact in X this our changes to foreign million we expect diluted income GAAP growth $X.XX prior in to in The of FX the income, in to million or net in guidance respect which approximately to of of XXXX or our XXXX X% to approximately For a share. of per compares segment, range a income our assumed net XX.X or This QX. non-GAAP range is forecast QX of of to of year. This year-over-year. Note million December profitability approximately share, of the net our range X.X% of per net representing increase share. our the was prior compared XX, seems per X% in to range impact rates growth million in X guidance diluted to of diluted GAAP range range $X.XX to XX.X exchange growth assumed results to compares revenue X.X% now of headwind diluted which guidance. this million headwind million with X.X% approximately net prior $X.XX our to in increase roughly X% industry X% XXX.X GAAP XXX.X to cardiovascular the non guidance in our and million from This approximately $X.XX GAAP a to share. approximately range range XXX.X XXX.X million net net in income to our $X.XX XX.X an at XXX of reflects incremental million, net points to million or rate now income approximately range

gross to fiscal in XX.X% our to range purposes, the range XX.X% now XX.XX% year financial modeling XX% assumes guidance XXXX to margins of a non-GAAP previously. approximately For of compared

are financial material half our prior impacts balance assumptions. pricing, basis rising raw QX XXXX continue revision as reflects with of QX The our pleased the our are of to increases of gross in to expected of incremental are a we in raw our our it in the the XX related were and see significant and results. over change to basis roughly we Note continued XX margin we area areas seeing which point freight with and FFT of or guidance progress, the increases in expenses While expectations points to costs gross materials GAAP expectations contemplated to initiatives result logistics. XX non margin impact just freight the of our logistics the second

review comes of and the raw decision expected impact a our freight, our to a XX% a result X.X million of GAAP XX.X the diluted to of modeling approximately Returning approximately than million other to our expect a XXXX key XXXX and X.X non-GAAP direct compared products XX.X% the range world. to assumptions while million. expenses XX.X% previously, demand and Finally, the XXXX. a our of is around strategic cost supporting margins million second in updated versus GAAP on our approximately of for shipping stronger of of higher million previously, for shares now year range X.X control, financial previously. to in respectively, respond XX.X% rate the We from material largely XX% tax half of to to of of outside impact operating other versus guidance is X.X XX.X% rate margins higher which approximately compared non gross outstanding full and

the given XXXX. to expectations for transparency we in environment, related growth continued our provide fourth would the global macro Lastly, of additional quarter profitability uncertainty like to the and

in of Specifically, revenue approximately expectations U.S. see we XX% X% margins X% profitability of and on growth growth our our range With currency markets. fourth in respect the increase total approximately to year-over-year on basis to growth to the year-over-year our expect quarter, constant U.S. basis. up increase non-GAAP GAAP the Note approximately expectations in in to expect the XXX X% a points currency on approximately midpoint year-over-year the of range sales basis year-over-year a basis. and a X% X% to up fourth quarter all constant gross flat sequential we for to assumes

notable call expected basis. basis non-GAAP a XXX We that, points our a year-over-year EPs of expectations are end in back margin the turn in down year-over-year to also end non-GAAP XXX year, the rate in to XX% to points income With in with margins of Fred. compared change a drive a sequential low expect last of range. the to the digits on on ‘XX, high in I’ll the high to specifically and range increase single versus QX, XX% flat net on operating range to see basis increase These combined non-GAAP tax

of there. Raul. done thank work lot Well, lot of numbers a A and you

despite strong third operating first we growth closing and hard they our months as expectations. that all the over around a the how strong around appreciate world. now how made profitability performance that believe So focus performance our continued they to and are of quarter In environment strategic initiatives. world of much. delivering We nine exceeded result We’d execution has But and members thank our direct our XXXX team challenging working very relentless I results of the on know are possible. continued our these like team the our

committed progress. success, to prior continued not our remain Importantly, resting on we’re we

We’re in total XXXX for X% currency now a confident which the on guidance revenue our of calls growth basis year-over-year. constant

to in continue to non-GAAP free XXXX. operating and flow cash margins We strong expect improving also report

over are wraps prepared to we’ll detail next that following back questions. And visit and then if our up and necessary. be hours time for I to Raul the Now get the now available remarks. administrator into couple that turn for will And of more

thank the will you it much. We turn now very over administrator, to

from [Operator Instructions] question of comes James. our from right, Raymond line Jayson the Bedford first All

open. is line Your

congratulations Good quarter, job. are afternoon, and you on the nice guys doing a

guess I me. So few a just for

one in First, the implied question market guidance dynamic was third But organic of can appreciate specifically and fourth I quarter there. guess result up organic kind out there the is, there, growth the on the it’s I growth propped anything time-ish the quarter in that quarter?

is answer no. the Jason,

some time When kind ‘XX. gross of Raul dynamic I’m of does great. the slip? in margin for stress freight? Maybe dynamics, versus on will any But Fred guessing or you some of that kind of the be ocean air framing that terms in

ahead reliability. I ourselves looking XXXX won’t for Jason, Yes, but we get of is what think talk we’re about to

more frankly. reliable capacity. are needs, enough things think It’s definitely there’s I opening up for quite our customers just and not

to continue air demand the seeing. current we the have. the we’re see continue And to kind We’ll ocean we so, use of that mix extent that to versus

So I of a dependent guess carriers, reliability that bit the customers. it’s our little on the demand and from

was Yes. think you say just And And that meet result that decisions a needs. saw It’s making international correct. of as customer that’s as And result. that. I to would simple I

a then to as Rhapsody comment stand from timing Europe, And the we Thanks. of and one maybe product on where last terms just in you related. Can a for in reminder U.S. just that product?

whole of about close to number halfway terms through was it a through, terms Sure. in we that halfway Rhapsody then, pretty of but accelerating Again, we’re the there and been thing in COVID enrollment. has is of timing, have trial. the

for approval. a in to Brazil. very be to out going two still as Europe, well build also seen that We I’m as its years a So interests business still and we’ve to continued over continue pleased half a say of and lot that

question. moment One Thank for you. next our

of next comes Biegelsen Our Fargo. line Wells question Larry from

open. is line Your

I’ll And just question. echo it’s my wanted little the on spending is bit. here, XXXX really to on quarter relatively maybe I Fred taking nice R&D for Raul. a Thanks start afternoon. Good a Fred. year-to-date down OpEx actually flat and congratulations

holding So up x flat in you an how are inflationary environment?

come Yes, it’s anything has that about I and think I’m to this good this, And then explanation better would and Larry. question, up. I pick have, I Raul? I a comment need he talking were and if I’ll I’ll let Raul, further. for him going back

Larry the expenses travel shows, Yes and some a of of see SG&A year, you’ll, in in I that of some , things trade mean, lot right up and investments this I think line. the you’ll we’ve certain it like the

on frankly, think on is clinical that been the on clinical, there enrollment. side a ongoing initiatives anticipated bit line, quite including that from the and than standpoint, little think are that slower I things things cost and we have R&D I there’s the R&D

So also, that move we helps. R&D, to on other. expenses the push priorities or And that out just tends as within and way one shift

the again, expense kind a we’re of our prudent on choppy understood I that to that in So, think environment it’s making we normalized way just management recovery. sure side, still on

kind our with our expenditures, of then outside patient of of being some and just So it’s scope. just

our integration, deal continues heard control you’ve to to let that our times, big Merritt. And a And to the allows this adapt say just production to that be vertical and many, add many conditions. me us, me very to for us

over a long it’s well, time really made mean, Raul? doesn’t I those difference. but and years, investments we the Just made a

to want really margin just employees, sure all I as out the team to I to committed operating and our lastly we’re our XX%, make into XXXX. achieving we head think, point non-GAAP that executive I

and sure a the there’s making broad think frugal commitment our we’re I expenses. from the that team in So, executive on employees

guys, the X% about How done XXXX, X% you’ve you, since to think you in XXXX. growth taking you people think meet going essentially guidance do have XXXX, so how growth you implies have for algorithm momentum those how goals Merit in do the if for and mean forward. here? flat and you could to still your about momentum the about Thanks the just the I want question. growth organic about CAGR think do gave people for foundations you because I sales well helpful. want Fred, That’s

welcome. through what to February-ish, we want there. to to Larry. we XXXX we that through will That’s want we’ve and out and go when want plan and our to around entire stick Thanks, of Larry, will our year, lay about we think set, will goals the them we want we XXXX go from finish the program. people, You’re then we February

Thank you. next One moment question. for our

question next line Mike Our from the Matson Needham. from of

Your line open. is

terms top the my want to side on I clear P&L. maybe you into surprises material hedges pretty I the you’re there your understand are a in impact risk and ask but well Yes, it is Has on How rolling earnings? anything I as questions. about to taking a that? impact any talk off of of with the had hedged wanted impact thanks expense the on there XXXX just on or we like one for the head your line, currency. or

Yes.

So we obviously place the have of that some that buffers, impact program we’re in a that seeing. hedging

in then And operations we also have in We also expenses as natural hedging. our place, help also the in you region have APAC Europe. that with know level some of hedges

So our I P&L. of the because that margin within on hedging say we might to we the to program is impact But mixes generally, the I the effects. gross the disclose have of some don’t rest really designed OpEx minimize would EPS. impact geography and say,

on why And a so minimal kind side. I a think the impact seeing earnings that’s you’re of

impact head reason the and continue there’s be as from to at XXXX to to EPS. that you to all, that we into just expect of offset should able when no change And most

lapse, of like going FX, most of again, at FX think but looking challenged standpoint, the going we’re with be be half as think kind people, probably think to to year, first are things next I for year, an us, from it’s I the usual. business the people people I you’re most right as

I and program, Well, stick your have point, think that with we’ll to a successful program. what think Raul we is and we

And one on then just China.

you there. VVP of said call saw So the I you some teens mid out you growth did think program. impacts But some

outlook product years quantify more like your how expect there of VVP VVP do categories? into to So would next better then just that have headwinds in I term from terms much as you’re over and expand growth longer without been they don’t if the few what’s the willing you continue know,

happening, purchasing are contemplating Yes. Mike, guidance. in but they are our tenders based volume

of this, discussion will those provided, specifically about or that other, guidance part our of our February. that So we’ve we are and taken talk contemplated stop those that. but don’t be We and we’ve the and part have in

question. moment One next you. Thank for

from Our the comes next question line Plovanic of from Canaccord. William

line open. is Your

that to not, end thanks. be the to math EPS get Great, basically please year. you If and I’m we to flat be Good sequentially correct end flat QX sequentially What going guidance. you’re doing quarter bigger is me guidance a for in right, is evening. A if quarter are and question in revenue contemplating about saying this Fourth low much guidance? on will when I’m typically my everything. low for

understand gets low high versus end? to trying us the end the what to just I’m So

we Look, Sure, of for a I sure. QX. think, first had all, great

growth environment, continued talked reflects half. last as a the in I kind think operating QX the we’ve over really of improvement year about our the and

kind we to So, is kind a see recovery of of recovery how things. again, chop, normal a a choppy

QX expect midpoint a XX%, growth quarter currency markets, currency total sales we constant fourth approximately The expectations year-over-year on year-over-year the constant to of revenue markets. currency in U.S. X%, So and approximately our roughly year-over-year approximately constant X% basis. of our assumes currency X% constant O-U.S. growth growth, growth

So, numbers growth at again, are pretty, those on basis. it I solid you pretty when look a year-over-year think

so P&L Help year understand you the you’re at into okay, FX you does benefit weakening is, FX next to in does taking revenue. looking impact to lies have of seem it? that kind a come on you into your get your put doesn’t I’m through rates strengthening understand, the dollar margins to gross your as from it depending peak of gross how the us actually hit just then haven’t again, flow and Obviously, as a the margin and search where And how gross down trying little, like okay, terms we’re hedging really question because it margins?

I get as from so us. but going guess companies us, the mean, operations just also that, revenue company. especially the drops, say of that Ireland these that that we’re not into company as Yes, obviously, Euro to details I are again, to as generally I we drops pretty you would helps in complex have things Bill, hurts know

in a kind place, along of of with standpoint. that So lot there’s that a and that intercompany feed balances hedging also offsets from into goes hedging

to into So, our saying don’t hedging I’d details say EPS. Right. is minimize it’s pretty with does it complicated get which end we stuff, program P&L. all the is on impact I’ll that what the rest of just that the of the to really made but why

So that’s or for our is the us ultimate how EPS way test the is moving other. one

us of And I good original. think within so pretty far, keeping our it’s done a job

I if may. question, Last

Just on guys China. a China. to mean, have significant exposure I you

of XX% And that. understand piece this just your from in. lot something business. line sales like bottom line that big it’s your age, pretty a obviously, in Help think It’s there’s terms protected I us of you in protectionism top are day more and business? coming how a or of and perspective

mean I region. outstanding think in had growth I we you at look every look, one, for I mean almost if Well, our growth

was on I I APAC would not we’re our So dependent stellar. say growth pretty China. that overly mean

to other there’s that But that to of our minimize we say generally, part areas and can the think invest investing a register would continue help I we big that but business, from products. impact continue standpoint. So also China I there that we’re is

Thank One you. moment for next question.

the from Piper come Bednar will question of Jason Sandler. next line Our

open. is line Your

solid the on Congrats quarter.

here on producing. You got down so

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from one more So us.

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our One next question. moment for

Our next of the Jim line question from Sidoti from comes Sidoti.

Your line is open.

the Hi, good afternoon. taking Thanks question. for

Jim. Welcome

your increase So guidance, revenue headwind. currency you a despite in the increase

So products? the are you gains, to you with share seeing getting price effect? better you’re doing that because starting take are traction the increase is Or new

good That was a answer.

a of factors. to wise mean, know, I a always But I think as I Jim, of function a don’t want lot guy. you is be performance the

efforts for our to able their mean, across and region. Yes, I mean, to for take operations thank force the minute deliver one I’ll part, the being multiple regions, then just the not group on sales our it’s I maybe execution also product. a and

right then doing a only now And people they’re the sales challenging materials and up work. on being to raw environment not procuring execution a able side, job, think I magnificent on getting it’s but product. to the to deliver also show

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they’re this the affected at into behind chain Do do to with you see you endovascular sounds going supply are starting of year? issues going done. other improve? Well chain business be you point. Or to any still supply think the the next It like issues

question. great a that’s Jim,

disruption. to We of continue see kind modest

I predict that’s to think what I that say. would hard it’s

stable are I you job. think and still Obviously, it’s getting that we’re a doing that’s it’s I difficult. generally whether you and the thought things a things are see of one its things, see. problem to we pretty going random that time But just, be have predicting good part numbers. can sales not. just wouldn’t better. And again, a plastic It’s it’s the have little or But hard we think

level, executing our are that’s a through high very product. operations delivering the and without possible not We

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magnitude you’re have the then new Or you on think you now? XX% And as the that’ll new Rhapsody. that that’ll that products much the Rhapsody do products contributor of you benefited few enrolled a that’ll order same be highlighted mentioned something approved, a do on you quarter. be be And larger contributor? a think during gets about you When of

new on wait to continue Well, Jim, of a think it’ll maybe pneumothorax all new tray, work is through again, it into down really Merit’s discussion I long. I’m our But mini all is something be think in the the so and part And, this Merit earnest out be whether has important not going that that supply thing matching to known up it scout coming ability to reflector, with we’ll been things go we in what meet and the heritage. demands see belief breakthrough how are that products designations, system, road. for the number, part have customers develops. up, of or chain, of that’s of same those add that merits the the terms delivery resolve, a the And BX of that I

to lines you’re Or for last next if any to do product it you do the recessionary that? be there And hit, think is me a one year, particular? concerned you’ll environment we that then are if able in file about

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just factor as And so recessions that. are It’s not Merit. big at as simple a

I it, would quite go well during and back pullbacks. think history Merit look done at that has these find economic you’ll

question. next our for moment One

will question next Research. come Our Petuski from line the Barrington of Michael from

is line Your open.

So the labor you that bringing or going to game back or to coming to be macro When winter. think I previous possibly the challenge A you a to how particular we’re level narrowed things of three out inflation, if question, QX. whether or you recession, area, it’s mean, or sort are going our have possible about heavy three like, about flu, COVID, all there’s in down get this a of the this to me be a really is Thanks. two mean the concerns really been challenges, I Fred sort to retention, think you of things two are all, are, I are as right on first now. impressive of what macro sort guess, do currency headwind? more particular than shipping can’t time this headwinds, there, issues I that when remember this

I And that’s going do? Raul What’s goes I all think that to places. talking what on another when mean, you factor. these said war, were about

that to be over there, it think whether over terrorism, all when in other can’t things. it be Iraq, to to whether Merit’s you and things question the by things of did answer way of I we really all whether of COVID Afghanistan, of at years I it maybe whether the be meltdowns, better threats it XX, way wars, financial of look we X/XX mean, those look years. is, war all if mean, What these this history be I kind been answer down here the forget slow and best war all these it hit the We’ve happened. that

workforce helped business customer helped We the our meet way answer we the the we with with to see sales Mike, adapted, ones you needs. adapted I We that helped force COVID answer to the that, we temporary, hit to to the XXX generally, with even been Merit products it’s that found through, people how to adapted is people, So it as one question nation. swabs build, came we’ve don’t keep employed. were But like that can our always know already deal best those but guess, your the coming.

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up whatever been. it has So taken

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things and work think the we we I on will a that the adapt can’t. things to can We’ll terrific And that answer. that’s

enough. Fair

sort cash coming generating guys of of I lot for assets effort to cleanly are know, suspect Herculean question. to you I some on this I of have, your assets mean, mean far you your type you’re probably of quite great So thing. and companies, that thoughts? that as a managed really balance are in minimizing. lines is there as seeing off been looking not would are I all shape. that a I’m what as pivot But there, getting around are companies as then out are some maybe sheets, and guys you what divest other sort the I I’m And that valuations at. through maybe it’s or what haven’t product other de-levered look part. down assume of

finish while you’re eyes foundations open. keeping again, in position those want look to to third think growth, year that we Merit’s a right, Well, I at that I there. their that I sure are things. understand and for We things But I goal do is think of that are to make out emphasize

So deliver but these able very us think to have is be discipline, to they I and fine. the to just fit, doing helped It’s the and what’s the that’s in we’re results. And focus. patient business I kinds of think

know term about for consistent There we Mike. again, out they’re foundations that the We’ve But goals So with they them. be talked growth, we’ve there. out our to set have in opportunities. long are

may So have It I a that sound mean, because kind like canned answer. camp of is a program. we

promised. We are want what focused, laser we to and on focused we accomplish what

concerns lot a that last just and curtail on investors Thanks. would heavy of from for this comes hospital are of your Are about winter, quick or maybe you sort staffing surgical systems, in out suspect us anything this that contacts idea answer. COVID anything could about giving question back. of that flu standing hearing I be really Hey, volumes? hospitals

specifically but surgical into Not Yes. staffing.

problem And system. is away. staffing a a We have It’s member rate going Mike. It’s that a this. the of like for challenge hospital we Until runs a everybody. our higher for and everybody not get participation board things

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closing Fred conclude Thank you. And remarks. turn I’ll that any to Q&A. it for will over

here. much out It’s crazy And ladies to you and the And again talking Thank us. gentlemen, one soon. just like Salt wishes. you note. see thank time host a night to you here you Come and your for City. Lake. busy time. We’d love from look forward day. snowing in for Salt out It’s good again very Well, Lake to and we’ll closing Best

today’s for call. Thank you conference participating. concludes This

Everyone day. You good may now disconnect.