Merit Medical Systems (MMSI) 28 Feb 242023 Q4 Earnings call transcript

Welcome to the Fourth Quarter of Fiscal Year 2023 Earnings Conference Call for Merit Medical Systems, Inc. Please note that this conference call is being recorded and that the recording will be available on the company's website for replay shortly. I would now like to turn the call over to Mr. Fred Lampropoulos, Merit Medical Systems' Founder, Chairman and Chief Executive Officer. Please go ahead, sir.

and Year to XXXX much, Quarter Medical's very Fiscal of Earnings you welcome, Merit everyone, Fourth Thank Conference Call. the and Lloyd, on Chief and joined call Raul by I'm Parra, Corporate Financial Secretary. Officer Chief Treasurer; our Brian and Legal Officer today our mind would please? you safe statements, us taking Brian, the through harbor

that like laws. protection harbor in federal securities Thank would everyone this safe to you, Fred. presentation receive that remind I contains forward-looking statements our

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

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

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

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

Brian. you, Thank

afternoon. a a will announced a a growth on quarter quarter we results constant review more of fourth will and program XXXX, financial up XX, of our of I as revenue a well with growth our during we $XXX.X Raul outlined reported fourth as balance in guidance my quarter our a quarter, and overview questions. performance, with your XXXX. ending year-over-year currency our which of as we on we XXXX currency the total condition in was XX.X% financial for start the opening the for I continued formal XX, in growth we period press December in-depth and provide financial of quarterly for will summary remarks, start After for release this discuss on will will then Beginning December prepared separate million you our The high year-over-year that XX.X% up call the review and agenda of fourth revenue with revenue we the brief range the expectations cover stronger what sheet our revenue related X-year of open quarter. remarks. our end me fourth an Then Let than the our results delivered targets initiatives earnings financial basis. call. of X of a constant basis with GAAP

we Specifically, X% year-over-year. in quarter to revenue range of fourth currency growth X% the the in expressed constant

revenue high growth product nearly fourth strong the contributions expectations and quarter of XXX our XX% the in Foundations performance for XX quarter, million. the believe a by team marked improvements off team's delivered that fourth and respectively, the delivered delivered in capped to third of non-GAAP CPS with XXXX the basis XXXX.Our constant the direct constant impressive points, strong expectations an continued fourth of This of the growth, and performance and profit respectively. importantly, to year-over-year result international quarter basis year revenue financial completion and our and XX.X% basis our and our our organic of versus commitment per to objectives, also which profitability better-than-expected free margin, fourth of and expectations results by we're an the than and hard our highlighted in be currency XX% quarter was of improvement share in And X and $XXX exceeded resulted both expansion a cash very flow final profitability income financial XX%, generation point XXXX, leveraged in Importantly, strong in points balanced execution results the categories revenue Growth well. in non-GAAP growth, of of currency program. in strategic our PI, the relatively as markets. in U.S. more to and the gross performance With work performance in net particular reflecting strong and we OEM continues driven proud modestly non-GAAP year-over-year operating profile year operating from our XXX margin our more a our upside quarter resulted growth and strength the operating versus strong end in respect profit we we results of earnings performance Overall,

free a of our XXX non-GAAP has We margin point currency of execution the It a excess FFG than focus constant in in flow their improvement of currency in are of and very revenue the compared million. expansion strong delivered of strategic basis margin when more points cumulative in more team's flow cash we a cumulative of generation cash resulted approximately endeavor. revenue non-GAAP CAGR million. of $XXX operating and than generation proud free is relentless that basis X%, XXXX, CAGR on Notably, multiyear and the $XXX organic to because efforts program X.X%, operating constant XXX

enhanced ending achieved opportunities the growth position to success Foundations As the related have to program continued in identifying announced XXXX. our Growth X-year in company profitability. program, commitment we release XX, our for upon growth initiative the better continued long-term sustainable December the notable a financial and this afternoon, introduced reflects initiatives separate press formally for program period and growth Building the targets for

to and so market-leading FFG. prior the in legacy proud customer-driven we're to so the over well with think strength made of we challenge executed believe historically the we on calls, ambitious preserving as discussed the Merit years. while the holistically quo for and our status the last of has use program many and innovation improvement we profitability business, have our for Growth to across well an very served comprehensively all progress As X growth and We the to of a wanted deliver vehicle profile, us Foundations culture that years,

in commitment next represents X program that momentum defined in The in objectives to done. the our that company years. established and CGI CGI end, continuation recent mind. has of development company chapter clear improvement a the the program was Importantly, To not and we're the with

including efficient offering First, ability the optimization, maintain based and therapeutic proven growth, service and market. of with and to Product through profitable our sales above-market our customer-centric customers together with prioritizing leveraging strategies, advancement pricing rationalization further engaging customers and solutions innovate including to unique initiatives education. deliver SKU

the planning and increasing growing focus throughout strengthen lowering continued our margins significantly development. operating employee tracking costs efficiency ongoing Second, engagement, forecasting, and development for organization. and network enhanced the non-GAAP the third, Merit organization, included and improve and programs culture leadership consolidation, Way targeted organizational And on to through throughout sophistication

functional company's integral the objectives. position key years to for aligned with execution are changing prioritizing in clear plan success health in of company investment best to needs strong towards come. and in care this the with the strategic our We objectives further evolving the is and goal meeting individual believe We business markets sustained people

and of kick committed it is completing an merit non-GAAP CGI the growth initiatives at important believe and Together, revenue activities objectives organization we margins formally the both fully operating year successful forward. XXXX, program, with in foundation our to the XX, new will we the that of to have that going growth is execution we XX%. $X.XX least understand our of As continued billion result for continued December off execution more of than ending efforts

of flow review as fourth as drivers which of XXXX, we detailed and in which take $XXX profitability and XXXX you our With will least well believe flow will also financial the a financial balance a our generation me we the generation, summary program. X-year results call key our and as release some period press our part cash enhance to let efforts We introduced Raul? over December growth, drive financial today's cumulative turn guidance, ending who of CGI XX, of Raul, at will million during the significantly improvement quarter cash condition. that, of through sheet free project our of

reportable performance all I'll review on product results the presented fourth our Note growth rates are basis. and a of both quarter, revenue otherwise Fred. beginning stated, in detailed you, in the sales Thank currency of our start constant primary year-over-year unless with categories. with and each a approximated

available GAAP revenue included growth in growth total Endoscopy our presentation Cardiovascular and segment XX% our reported have and Fourth our results in on non-GAAP was earnings driven related reconciliations the segment. release website. by our from XX% item quarter We in growth our to

end results segment Our growth better-than-expected the primary the currency of driver the cardiovascular constant versus of high expectations. revenue was

While line of XX%, cardiovascular driver segment PI with quarter. largest Sales sales intervention again in were peripheral segment of representing our expectations. products, or our this total the growth Endoscopy increased

XX% contributors principally our in than total our from increased customers increased hemostasis intervention we for of certain products, of key our the Sales X%, which and access X/X Sales end access respectively. acquired products, the growth exceeded notably to increased of CPS sales foundations increased high strong more of of sales and SKU XX% sales CRM our total constant continued which benefited to products, of of or lines categories sales customers high and for of geography increased XX%, higher from driven Organic mid-single-digit in on radar our primarily products, together growth driven have were localization PI basis. Solutions, growth with XX% in sales as from QX. EP in attribute products in and our PI were of growth a and demand PI which our OEM little the and demand which Procedural geography Cardiovascular also and part and Custom product CPS of currency biopsy X% better and organic the QX. Sales our been increased end multiple initiatives. in in of our our by contributions large intervention solid together an quarter. strongest products, XX% identified from represented expectations, segment results XX% which decline by growth both XX%, expectations, which and that sales represented products of product And we than sales at QX. increased PI growth. was sales by for organic product products Cardiac rationalization expected category the growth together sales XX% and was our drainage respectively, and OEM both nearly the this cardiac Excluding

third of sales call. expectations range the line in quarter segment which outlined Lastly, in XX%, our our growth on we increased was with Endoscopy

see sales of deliver in see pleased continue As and business mid-teens improving to growth the we quarter, XXXX. second fourth expected, this in we're the trends to half

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

exceeding in by fourth sales and period. a our basis the the nearly XX% constant in XXX U.S. currency high growth increased organic X% points constant on quarter currency expectations on an the basis Our basis, of end

particularly in X% market With during hand U.S. outside the X% line of which extent World continued with improving growth growth compression U.S. growth fourth overall EMEA quarter, in performance hemostasis essentially and exceeded primarily growth in the in World device tenders saw PreludeSYNC in in execution radial which the headwinds and products. the more expectations volume-based as our International the growth XXX growth on U.S. The regions impressive reflects our trends our were direct QX. APAC, related geography business, and our quarter. Our Hydrophilic was constant strong constant the of in a both Rest our and compared purchasing by organic year-over-year by Guide the sales by currency impacted stronger-than-expected in of by basis, flat was and and Wire specifically, in by organic the to exceeding region region driven customers Rest lesser the end our of XX% growth X% an currency the in increased than basis growth were high sales to to sales points to of Steerable and China that to the respect expectations EMEA expected. Splash expectations

Turning to financial the a P&L. review performance of of the our rest across

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

the level quarter. items our press the We website. have to included on approximately and year-over-year fourth in increased in results our related non-GAAP reported profit reconciliations presentation from Gross our at release XX%

XX% the of as the end increase points was period. of year mix were in of quarter Operating Our from gross year and benefits year-over-year increase SG&A an basis increased gross manufacturing to compared from XX% from the expenses a expense expense in variances by compared XX was R&D increase margin quarter in XXXX. period. prior XX% fourth at by year-over-year The expectations prior the partially was in offset expenses XX.X%, fourth to operating margin driven XXXX. increase up the lower The

the in XXXX future of performance commissions growth better-than-expected quarter million. the or XXXX of the million operating higher to on fourth fourth support expense income Total $XX $X.X as results XX% in expected. operating prioritization QX and Our increased investments from initiatives reflected quarter of to our sales

per compared Our was prior in increase was compared basis partially by by point XX increase operating year offset in non-GAAP The margin, associated currency a basis operating XX.X% losses quarter income or by and by as with to with well interest or XX gross driven million offset net realized margin to the in increase rates expense rising in higher in an period. the prior margin balances. period, XX.X% a to interest point cash driven net XX in our with $X.XX in foreign year. in an net our the last other year period. partially associated increase as income share income million $XX.X basis per million was in quarter fourth interest unrealized to of million increased $X.XX prior was the compared The $X Fourth our net was associated increase compared borrowings year lower $X.X OpEx year expense Fourth point other non-GAAP expense quarter period. share compared and the $XX to change prior

where with high are quarter revenue pleased our stronger-than-expected we gross our results non-GAAP per We expansion the our profitability share and drive expectations. exceeded operating end earnings margins leveraged diluted in to that the and our performance fourth in of

of our review condition. a to balance and sheet Turning financial

obligations million and $XX.X $XXX.X XXXX. available cash borrowing December of of $XXX had As as obligations of approximately of capacity debt cash of cash December XX, capacity debt $XXX million equivalents and total we XXXX, equivalents of $XXX $XXX.X million, of million and total XX, of cash approximately million, compared borrowing and available to million

at in of a the of per generation Our XX% leverage price share. the and of significant quarter mature borrowings free XXXX driven the up flow December change was of the XX an million have approximately as was notes improvement cash conversion of used proceeds third $XXX.X has interest XXX% generated conversion quarter million XXXX. quarter, in after have in cash and interest Capco $XX XXXX. result $XX.X sale of issuance proceeds semiannually, than extremely in an December free more the and X% generation down adjusted cash transaction, pay cost and FFG free are nearly XXXX. payable. million areas a cash and We the convertible obligation The in price of related in significant fourth mentioned XX, net in in The proud debt primarily year, notes of rates, net accounts of of from total of totaling basis. on million $XXX ratio improvements obligations The debt. revolver initial fourth quarter term in and ] per approximately We $XXX costs delivered outstanding working cash free specifically up was XXXX. of flow fourth higher specifically $XXX of million were in debt from gross as $XX.XX XXXX flow of earlier, was Initial were use and X of an bear X, inventory of we the capital, the ended from February offering of as And issuance generated the deducting December flow by at per payable million effective notes X.Xx share. Fred million part our which of $XXX program, Total $XXX the proceeds years [ the

Importantly, not enhanced expect generation free only strong generation the next expect flow we we years. do cash cash over X free flow to continue,

Specifically, the we program cash XX, $XXX million ending X-year will generate our XXXX. flow than in period free of more believe CGI December

a review today's guidance, financial introduced to year fiscal Turning release. in which XXXX of we press our

reference, those have the formal earnings prior each a period. items table compared our we how details in financial of release, included For year our to which ranges guidance and press

to X% assumes segment net X% growth XX $X.X growth We GAAP approximately of X% our net revenue change and in headwind range to million in points a revenue rates basis segment foreign year-over-year. in or exchange to approximately X.X% and X% approximately Endoscopy of net from expect of growth growth currency guidance GAAP year-over-year. to The our of revenue revenue X.X% Cardiovascular approximately

of constant a X currency items XXXX. when impact currency net of to to growth growth basis currency of X.X% consider we in exchange foreign X.X% constant in our changes to for rates, revenue the are XXXX. in range evaluating on X.X% the Excluding X.X% revenue total There expect

ongoing revenue related First, U.S. XXXX, CGI impact our represent rationalization to in representing to roughly and on currency lesser a in extent, growth million in headwind basis EMEA a FFG year-over-year. the SKU initiatives point XXX to and our $XX constant roughly

the and World growth to growth Second, offset range high our constant EMEA X.X% U.S. to midpoint the X.X% basis, APAC of the X% purchasing. and a expected substantially single-digit in currency U.S. related total expected the to driven continued be units both by outside is of Rest decline growth partially currency growth where the U.S. outside decline regions, assumes in growth the revenue China, on to year-over-year in of expect sales a due in related by total volume-based region. year-over-year but we expect we to is headwinds grow APAC The Constant sales to decline

net $XX total our revenue fiscal revenue in million of guidance inorganic assumes announced X, contributions also for the in acquisition June million $XX from range the the aggregate. on year XXXX to XXXX, Finally,

inorganic to Excluding constant reflects the of year-over-year. total this to net for guidance our representing to year-over-year. $X.XX, revenue organic $X.XX X% in XXXX, we expect per X% X% With of growth revenue, share of XX% an on range range a the approximately diluted in non-GAAP profitability guidance increase respect to basis currency earnings

financial purposes, approximately last basis to to assumes other range million. For operating approximately million $XX.X non-GAAP approximately non-GAAP shares interest our XX% fiscal year, guidance points year XX approximately Non-GAAP modeling XX to of of of rate XXXX compared XX.XX% margins tax $X $XX.X diluted outstanding expenses and year-over-year. million net of in up and XX.X%, the

least $XX range $XXX to million. CapEx expect million Finally, free of and the flow of in cash we million at $XX

additional of provide to to our growth profitability quarter and the like first for related would transparency expectations XXXX. we Lastly,

approximately of in sales currency of revenue. expectations U.S. approximately million growth assumes XX% markets. X.X% midpoint X.X% midpoint year-over-year X%, Specifically, in increase and also range year-over-year year-over-year up in expect a the $X currency quarter to Note our the quarter of the expectations approximately growth on basis X.X% on basis. first sales constant includes first our our GAAP total year-over-year currency international of a revenue constant X% growth and The to X.X% constant growth approximately approximately to we inorganic

increase range we XX%, X% basis quarter Excluding margins of to approximately these the expectations revenue inorganic profitability up With operating our quarter XXXX, expect expected to first contributions, non-GAAP respect approximately of to our to points XX first year-over-year. XX.X% the in for year-over-year. is XX

questions. Finally, prepared now in That to EPS up we wraps non-GAAP line like for Operator, expect range would remarks. $X.XX. our for the to up the open we of $X.XX

Thank [Operator you, sir. Instructions].

with question first Our Sandler. Bednar Piper from comes Jason

to and and I Congrats here. pick appreciate color I to that new CGI out again, a be of see a don't X% ranges guidance elements, anything story, aware as on all at then the and points to surprise on the products, there's if to investors a revenue embedded criticism, headwind I a X% margin regulatory nice in XXXX on tailwind that anything CGI. the to math the on, the think The growth I up call or guide of? to makes side basis are of complement there XX notable finish more like here. really to here to the wanted margin will the pricing, first CGI close the operating And I'll these think something predictability that's just sense. outlook check be year, out line. to your in of not any equation, of annual works to expansion XXX

for I'm think expansion skew how more end few are about what margin benefits and 'XX, lower that between here OpEx and here, the leverage? gross at 'XX it we maybe looking in Given there sorry of towards we're balance looks do pack a that, at XXXX, the but to

Yes. A lot unpack to Jason. there,

revenue side. try to the going maybe on and I'm hit So

same U.S. the on would the low largest bit think And CI, CAGRs international X%, to and specifically is X%. with it that the upside our categories, CAGR. CI. more think the at reportable we really the then little CPS, be and PI to on hitting of then have, end and when PI it's selling if So drivers, product a least introduction, start OEM we and less depending the we're positive always than on each really products CAGR the of what coming Product contributors But you on in tell the Endotek the comes from we look, key happens. like I right, really on what

of did So it's frankly. what really just FFG, quite a follow-on we with really

So on that's the revenue side.

we as higher operating going is end, operating really be you you're And on leveraging up. margin. to get end, As piece, on the far margin focused driver that low on say When gross I really the the the would primary margin. to the

leverage You're from would what end. getting OpEx than more the we in low

So hopefully, that provides of you color. bit a little

next also, wraps this that And business. that products. revenue include And release, These any does a are that the make Merit me include existing we may long new but currently releases, they selling, It this of new release add our the when release thing product then we're as does of let notice of have to history year. existing that. is new not products. but we'll and And they no prognostications or products

good a point. That's Yes.

Rhapsody, expect the point included one we a but the not haven't that happen, it sure. WRAPSODY we weren't we the but for when that of clarity, U.S. going really been it's U.S. So have know just we included as approved it's sales to don't think exact would outside of XXX% given been where know sales, timing, CGI, we in we

it. we So didn't include

Very there with Okay. I WRAPSODY. on And you that hinting yes, up was what helpful. picked

entirely and I the So appreciate upside that on sounds all details CGI. that's like there

for guide here. the parts few here a On for moving XXXX, different

and benefits. you Are Can more you're X% for these like XXXX? about dynamic? you be Presumably, whether growth talk benefits X%, some organic I margin those here in that XXXX think the that EPS rationalization like mentioned. core if SKU margin not rationalization of a SKU something would that Is impact? realizing has to

It's Yes. CGI. similar very to

especially driver make for margin investments higher we in end, you're about as So the on And WRAPSODY. that we expense margin operating talking us end, more that really to up operating end high ramp the on expansion. the gets the that of getting low some range. of gross operating leverage business, expansion the margin and main you're It's then as

helps, hopefully, that Jason. So

Yes.

rationalization, a, helping Sorry, that's XXXX? was benefit going asking particular, guess, in I a or the I to gotten SKU in be

throughout helps And several us out out CGI. Yes. we've I throughout the it in it's it's things the mean working years, included numbers. been but last

Steve Lichtman from Oppenheimer. comes question next Our with

are your And income out a on on higher flow over on the couple as I few look the that cash a out? congratulations next capital call last free Or solely spend And levers that see forecasting? what X step you that working specifically it higher looks quarter. to cash. for is Anything on the years there's guess up operating versus based directed Is out outlook to like in there you're you toward? playing 'XX, CapEx.

Yes.

So on free specifically flow. CapEx, cash around the

program. So to going we're obviously, throughout earnings have the higher CGI

So we to expect that flow through. obviously

far be Mexican we're that facility a generation, so come as working over in couple somewhere capital. as the that we do One we anybody. will program, the work of X-year the of obtain will within we'll is little our will several expect investments We CapEx currently year half as the do we from that were sales. highlight this I building bit don't I think other we the the to there just next surprise Now mean it to flow in. cash want of able be do have CGI We X.X% to be to in X% years. making a of

did a it the buildings. than was you It because we now it. that take and available, we we X So it's lot the wanted have And it available advantageous. when when full easier space. need was It's to

do town be to have we that. want across Well, don't driving to to

included in the in million We call on numbers, fourth but want get $XX as to planning it a the it nominal on would be bit plans do have in we more something That as we're on That early is get into is The year. likely here it, we'll we I doing. and started than of for immediate Salt that investment spend. a year be flow center doing whatever will that about next out for There's as be bigger out a but that just one work will So it. we plan free but our no we quarter, it. need that little space, build will this it distribution could there cash a Lake. pushed

increased So couple a of and the working a is lot just callouts. capital. of drivers But profitability

then that helpful. your as deals. just you provide opportunities balance solid flow And on there? outlook follow-up, and Any just to out seeing cash thoughts M&A, a your would given thoughts can Are do on latest appetite free that your Great. be sheet, you

think at identify to and the opportunities. them We not fit Yes. Listen, time. I have continue frustrate. to look They we'll all

back There's business, that pocket. felt go things we at did money the we in years, I our no would ad. and the X opinion, last the think our if a that's enhance hole burning were in things we and look same that the that

right to will spend if keep But sales just discipline, consistent we've right. the It's in it. things, that it's objectives, to we force, our that's even it's just We things. when we've going it sales of it, But our been is have business very but see I cash plan. word, with right same at that's mean approach the won't we that a didn't this do a patient consistent couple it's we're but been be point, have and we do we we're as the with the an And it and what usual. hesitant lack don't done and ongoing better it's process same past, the right and find our to the go business things. of doing. exactly We We're want looking that going And call find we'll away. I be for something -- to months.

program not does M&A a as contemplate any the just also, reminder, activity. And CGI Yes.

a good point. That's

question with James. Raymond from Jayson next Bedford Our comes

stake instead Glen goal. flow I'm really like of if set he a goal looks didn't I hope $XXX,XXX are Eldorado of Rule Ross, shy cumulative movie sure of get the cash you that the in not guys fans came the free no Cadillac the deserves. that It Glengarry but of

wrapped No. They a in and plastic actually were wrapper.

think right. what and hair from all from that you're just We were after honestly, and have companies everything a with short happened standpoint yes, we've chain but we Jason, reminder, treated But a to that a it ago from be years we that slightly the whenever value fair million payment supply a that COVID and through through made of had remember, X I Just or estimated because been whatnot. been $XX different was. had standpoint contingent

we're an team to error for what commitment the that, think, of I rounding that great to employees on pretty within team is made of be towing the to proud example were a our everything. we've as and honest. think we And I the line executive of be accomplish, a of also able

doubt, proud. you be No Yes. should

So It just comment. that question. my was a wasn't

looks dynamic, So a organic the cardio just quick you impacted expect by segment in guessing of the about to SKU disproportionately X% like a It do in ones ex which But see X bit SKU I'm here. the rationalization. it's implied slowdown. is

you the see are and the called You in slowdown to going 'XX? Where anticipated drivers. TI out CI as

Well, packs. a from and of comes the our rationalization lot kits

that's we'll of But most I So bit mean, stuff, see where of growth the MDR-related than is I most But some is growth whatnot. at a from little impact. I about of our going coming X.X% of the and X.X% think to X%, of and other U.S. think there really, outside then be almost over growth the U.S. year-over-year spine the that, business

that hopefully, helps. So

all U.S.? the growth, Okay. Maybe us in in end I the remind there's acceleration anticipated out just Is to of timing just the upper bit. potential broadening Revenue 'XX. there it due 'XX think the in an success basically implied WRAPSODY and the and CGI, a on

to Look, weighted in weighted It's X little and is Fred. on it you revenue when say almost front. and 'XX that Jason, plan Yes, slower back the thing, the was programs, on other But we in see that than on back all end It get in depends the the is a remember that 'XX approval it's years. the fair. bit existing. not

we this million. year, That's as that's remember, year. XXX for about we talked happening rationalization points $XX basis about, And some have SKU this Yes.

to back get behind accelerate that back are into you what the us that to. to get us, that guys we to to start then X% as X% So used you

again, CAGR least So a think a timing I from at really standpoint. thing it's just from

now new we haven't that been think U.S. can the MDR I that feel products another feel we And other we thing products. guidance. we products mean, selling start sales with selling to just recall, of in Yes. numbers, not with tell MDR They're you applying that things will in could in these I we line U.S. existing are this. because completed so there for are selling mean, comfortable of comfortable finish we I those get we're our we so but approaching the the have for the the that Merit, and

I should leads were the Again, just at enough to related XXX of again, can't everybody we're that the higher day, I SKU Yes. to think the profits. basis -- headwind end points going it about doing of that a which highlight rationalization, that's be happy the because through process

John Canaccord from Our with Young next Genuity. comes question

that supposed of a a here. think to question. to back Congrats circle strong on Maybe XX. year on February, final follow-up the that follow-up believe I complete you're in end to WRAPSODY, just on patient the I

the just submitted fan the the can if characterize it? And And you with So will FDA module interactions on was be far in wondering so still QX? that done.

is, and the And to everything. that that modules. we which now in being it. we're our Listen, it's still first previous then it have FDA. have the that hands which the for May. Yes. John, on schedule filed that one per at up and making calls, the on yes, in schedule of data, the the reviewed way And But we're the is requires point, And X April I think, sure we submit is populated or all tidied final FDA

help contracts, out the a think on expect come we Great. the priced color how to And then or projection, should Maybe XXXX as of just higher here. rationalization when get to growth renegotiation that just power pricing push SKU of year growth? I about do this you just any think for how products function

John. Thanks, Yes.

started to we continue mean, guys that give under context, versus you the As initiatives you pricing foundations think growth. CGI of They'll on. the working disclose I we've some and pricing just they're volume. we don't general just for I set part initiatives know, into But we're out our that

initiatives others a the And to goals minimum for working have CGI operating going that and X% be us, don't amount. disclose of tailwind is several of expect minimum among a we get on do margins. revenue one so CAGR we're the of but that we we it It or of XX% the a to at least

is from foundations are think, going growth John, very forgotten. bit that for we on that the maybe I not little ongoing. of a forward, that And things we learned They are made color it, are clear just have things that

that contracts the that coming this, for and other. due have We renegotiation are

So engagement on of all our every And we of of pricing, that come specific although things play. still all into The will things single concept program and day. to won't part those are those attention go we the through work numbers. all contracts

Officer in his We over nodding room, I'm have and he's at him and our looking Commercial the Chief head. just

So that's his commitment.

see but can't we You this it, now up. I thumbs and have can

there So you go. Thanks, Joe.

Research. Petusky comes with Barrington next Our question from Michael

Congrats.

were asked So a and couple me ask questions of couple more. let a but answered, my

just that in or of you the was of you pressure I weighed that. comment should wage wondering the that Mexico, In I on about terms immaterial could that is sort mean on if be going -- as that's is think something

to don't that belief that Mexico. the I those able at been pressures open with we're around think No, think of in table the that's pressures away. quite are the would them couple And Mike. mean something going deal globally. that We're wage we global, the least I go about call pressures been seeing would And that we've It's with. have wage that people of the a pretty throughout something speaking, it's is I I I years some frankly. think great question, say, about to that wage this dealing last overcome. to generally are, We've

we think a something we program facility have deal be at been and higher that it's of Mexican we how end working are we've that with to on the tend our employees, they our to on And make good sure in properly. paid things. I

But dealing else, it, would included it's with something yes, does is I Mexican think along for it time, that peso, but we're be so we're think it CGI. hedged than the everybody over in I of are so aware with, but we And well the we it's like less and impact gave for other the spread companies. and numbers

part. that's think I the And important

in this, of Some mandated. Mexico was by way, the

deal I So everybody mean, has with it. to

of to think our in best guesstimate what said, numbers have it, accounted in next I numbers. the along, follow Raul the it's in and costs, be. part would as it's We our those particulars of those We've

And so models. numbers we've in built our and things increases into

were Fred, you of guys specifics, of thought terms guys probably well, convert some I guess, as those think when I'll growth these a guys things getting in us up probably few a probably that people maybe the more aren't I burner couple possibly that did now note external Obviously, myself you And wrap have of months opportunities. in one few position? that teed a front people, without any suspect out did have you things I mean, ago,

business will never come initially. them, an Yes. people every there I Mike, say everyday ongoing would on are development at comment across that. as you day. at into our know we issue, desk we things that look that and We our look

ongoing. So it's

Some particular where would we is XX% is This very much. where we sell. have -- interest not This say you them that thank I fit. just not of operate.

things. those are place a come things for that of into there So lot

no well be the executed. I past. even during I a integration foundations and to of think, there's we've defend prudent done like has financial disciplined that in well prudent Again, and So be did burning The out everything holes think the will thought was were done I part on has of to the allocation profile fit And well. strategy. growth, that we

do way what the be was things, to know We good just that happen inflation. would thought it's be So we ready. with just we going it to didn't

Raul? did So we're We cases something people. we with other most we our competing and to control right in the that think of have remember, And move. that thing when don't continue day-to-day we'll fits, all we do that. work. But

Yes.

things. highlight just think I couple of to a also

wouldn't fact to that come to out think be I are look, as looking bit dropping. to happen those were find got that the as fast interest little rates was, were we that hey, it's going and believers And thinking a of actually way. we people

are yet, a we're looks not like run anticipated. victory but things to be slower people lap going going Now to than it

cash accretive. to on and it. some really interest I essentially capital, sheet. I it's at I think thing. balance of paying. So higher the of We the We're think that's hang did leverage And up, up right we mean, than earning leverage get a the cost EPS low day, were we're rate the end able

was one heard mean, projections year. I'm morning rate economist, X almost I or X radio initial, and Mike, an this always the I to X think, not would is morning, see X people has X it. listening I now this I to inflation the -- but decreases inflation this for or legs

bit apology. for a about So thank little -- that at out, all I said, first if I'll questioned that a your our someone won't of But on a things based all call could your and the judgment And all, candor. you it feelings have it of as because accept was it wasn't being time it. headwind works

but I may I them, technically not think owe spirit one you of the to getting I because Raul won $XXX not to bet. won million, think about I guys he the bet quite the

there. were You

usually apologizing you. to We're

So we're on happy side. other accept the to one

waiting now forward? guys that primary of would of want this, get you just terms you I but So and everybody some WRAPSODY the else clarify sure come terms see to endpoint moving gets in for data Are I back? want to all it. one in that issue, data to make Have that of maybe I needed still you seen

of patient in. for being organized presentation. data the is properly It is All

is in. much data patient the that's as So from I say about all can it. as of But of the all

right. it, the that's of so going protocol do you sure make all for news was the once that various the at of it And got in now now those goes to looking you have to organizing to it's process And issues because FDA, good it through, us. to the fall, all things have

got everything. It's in locked to be

process locked. the And that's I now. into it's we're be got think to right And

the track, remain disclosed on far. everything for we've I of think that the we at so Mike, day, end

you and the in if made one, fourth I'll any quarter. Russia it around get Last Yes. I catch comment didn't off.

little I a still that's know I had there, maybe revenue think QX And call, get incremental a maybe any but over just the there. there. you mess on comment we'll suggested

on based guess, expectations. line to that's Russia. updated, the licenses in I Russia, in going were with get do business able in, our We came think I to everything on required just

have you licenses, able the second paid. I just get the that think hurdle, getting within you're only to to also not make sure

sure in were we we receive a and that banking allowed in the us to proper So dollars. to money have partner able way U.S. U.S. dollar make good that

think happening worked out. all I circumstances think I'd the are we Mike, there, turned out, And so say but could I everything it with under that the happy were it how best

next Our Sidoti comes Sidoti question Jim from with Inc.

there and number come Now other XXXX the think that Or see line how you for projects with least you're that finish XXXX. will and we start the enrollment Are finished with R&D to you to fill at down? WRAPSODY close trial, of WAVE that in? should will

projects have No. allocated. R&D, Listen, in history invest the on to continue to budgets and been it's within that Merit's that see a opportunities we hallmark we of

I'm So going it's to say business usual. as

Some products are more complicated.

Some are are sons product line improvements. extensions

Jim, still a of things out R&D. we're committed hallmark our sorts always of It's of So been there's lot success. there, a to those but

Yes.

I add, want able to I Jim, back same. some we we the we I the just mean, found efficiencies similar the I more to of with to were reinvest to think business. strategically mean, And to that think growth, for foundations look, of we into did do what

Fred products. going to more there's As therapeutic mentioned, be

are able we that that you sure to are the make those been fund able and we've deliver. continue to growth to, to want we to so deliver guys And used to all

products, therapeutic we've a find it but So to we're managing continue really under a that, to to to we'll when do think through that I CGI. balanced approach and trying great think cost so reinvestment higher and of done job comes I

it made around So a think revenue. X will of you percent like sounds it be

fair. it's think I

then one and Has this that to product I be the think moved yet another you in quarter AngioDynamics last been point? completed was still And one terms acquisition, had right. over at All moved over. of

Yes. to produce in there. Everything our our is Mexico products in place facility

we've Greg think I Fredde, one and in did It So pretty the well, in I Becton We do going giving transfer, was it's you Angio our with precision. it it's things moved all and who Dickinson very been all credit, Jim. from think things the place. this absolute integration. And candidly same story actually know there. the seen that of to And back done

from Matson comes Mike And next Company. question & Needham our with

the deliberate but I program, guess didn't it, in if expansion but with on your gross I get set part, margins regard margin to just I think that operating but you've and Yes. the margin between thoughts gross I about operating apologize and how was there out some your break I targets, just anything on to just maybe CGI wanted missed see I leverage?

Yes.

focused gross did of But I XX% really on then only a the at FFG, minimum that FFG. million. of in guidance considerations. guidance. with did give flow cash CAGR modeling operating turn and actually some try what We then of And into to XX% we margins we least $XXX didn't we think revenue similar free to margin give X% for people So Mike, to

think So operating What it But either as delivering can from earlier, comes only operating or on time of think the shown at necessary. get and the margin at enough like don't we I from to ourselves we we've credibility be think come the XX% can day, to hopefully operating what adjust this and low margin, wherever we're end, that leverage to with going is that I we're we I the really expense gross that end going The margin, I from not gross expansion the of gross FFG get it leverage. our margin, to end hit built on levers. high gross it think would really with covered think expense we get but from similar around, gross we've do of get margin. mean, I did it. ahead margin, to up I want said just and those also we'll

operating And really from gross to those it expenses to. leverage so But is we'll reinvest need get preference margins. the into our dollars business and we if

really that's So focus. our

we ago, of every and aspect going our sheet. statement said fine-tune years balance to X income we Well, were our

that's So think what done. I we've

it's one it's of them. all the or So not other,

and human it's everything can of We've that materials, takes. throw have logistics to you manufacturing that's the I a consolidation. Yes. it going efficiency, more else But resource got we mean, initiatives. sharper what on We're gross to little color, same, give just We've bit because of at margin lean got better Mike. network

longer-term over look And the for what right. and CGI, I you've growth. single mid-single then is the the other just I question for high organically, if really more done digits. my the you've years, as guidance Okay. at All just be only particularly revenue for as guidance more well been around this mean, past digits few guidance 'XX

changed that And so out saw the have be the in probably SKU to mean, understand or I I I not anything other you terms wondering something conservative. things else call single baking there, about mean you're of there. but you're would in there's just digits, you trying something And maybe if to asking grow point rationalization. would I mean, you potentially? I somewhat there to But that or is I being high guess, to that from guide headwinds, I'm able that prevent

seen. have foundations Well, I would look, none of I I think we the growth, we us when think out headwinds threw for all anticipated mean,

sink in kitchen we X%. confident from everybody end everything of was low there the in feel in and thrown think everybody had But really look, I what that CAGR to saw experience.

things, I and quite allows us certain and it say think we think no frankly. achievable, it's to realistic to

X%. feel to And numbers at the so at X% leave it with I comfortable I we just think And that. would

I think X better, but of committing aspire we we're to. always is minimum to a do what

with Our Sandler. Bednar next Piper question comes from Jason

this trained obviously on I don't think all since you've anybody's and asked one, quick well one China Just here.

for the to due saying group. it down do The I'll revenue China XXXX, here for you're DBP. So guidance

of hitting a it XXXX, in second from we've simply is the 'XX? all DBP new back or that clarification. the this of now XXXX? that is half of Is more something Just check extension an here and talked developing about Or

Yes.

are the our year-over-year a we're to there, it's in mean, country-specific the managing Again, will going we're the China. Jason. to volume headwinds we additional -- I you're it think going of last on I that rates related color, X% volume-based So APAC related we've it's over basis. And But continued to region, continue say expect on we related obviously, not provide decline I growth been the and something through to most actually But due think grow is to decline several all purchasing. it give a into that we right of but of baked just seeing years, is X% which X%. out to not called track to the to I to

it I'm would this for Fred further turn showing no to I time. like back now Lampropoulos remarks. questions at to closing

for was you. questions It Well, call to us thank We you and a everybody, the opportunity again, joining present cover. to to to today. long with appreciate lot a the

wheel. We in single We worked closing, the a our reminder that we objectives hard. objective, in with objectives. had every Just and employee put the this individual shoulders company to aligned department company

all program, future. do, actually are expect to deliver to reporting didn't said being aligned We to able thing us. the right company, to we the in a felt which we we'll what helped we on do. So to to and over we forward is being accountable as exactly line believe and look our next and the X-year be it We have you

Lake from City. wishes best Salt So

out Merit's chance go held show starts the an this being Salt in SIR It's take Just March, to in at we to a and reminder, hope SIR meeting a the quick look maybe Lake even here merit. is meeting to City get and late you biggest opportunity a come Salt year. Lake,

Salt best So City. good from night and Lake wishes

conclude conference our Thank today. you does call participation. That for for your