Merit Medical sees 52-week high on Q4, 2016 beats

Merit Medical (NSDQ:MMSI) posted 4th-quarter results today that beat the consensus forecast on Wall Street, sending share prices to a new 52-week high.

The South Jordan, Utah-based medical device company said profits were up 17.1% to $7.5 million, or 17¢ per share, on sales of $157.7 million for the 3 months ended Dec. 31, for top-line growth of 14.0% compared with Q4 2015.

Adjusted to exclude 1-time items, earnings per share were 31¢, 7¢ ahead of the consensus on The Street, where analysts were looking for sales of $157.3 million.

Full-year results, however, missed the forecast. Merit reported a -15.5% profit slide to $20.1 million, or 45¢ per share, on sales growth of 11.4% to $603.8 million compared with 2015. Adjusted EPS came in at $1.01, 13¢ beneath The Street, which settled on $663.4 million as a sales target.

Still, investors liked the Q4 beats, sending share prices to a 52-week high of $30.25 apiece today, before settling to $29.90, up 4.4%.

“We are pleased to complete year 2 of our 3-year plan,” chairman & CEO Fred Lampropoulos said in prepared remarks. “With the introduction of a number of new products in the beginning of 2017, we look forward to continued growth accompanied by continued expansion of gross margins and profits.

“We believe the recently announced acquisitions of an Argon Medical Devices business unit and Catheter Connections serve both tactical and strategic objectives,” Lampropoulos added. “We believe the Argon transaction will enable us to participate in tenders which previously were not available due to vacancies in our product line, especially reusable transducers. Additionally, we recently came to a preliminary agreement with our longstanding Japanese distributor to transfer licenses and customers to us. Almost 50% of the Argon business we acquired is sold in Japan and other parts of Asia. We intend to combine the acquired Argon business and the Merit-branded products into one business. When completed, we believe the new combined business unit will substantially improve our growth prospects in Japan.

“We believe the Catheter Connections products complement the Argon products and provide a substantial value proposition to both domestic hospitals as well as international opportunities,” Lampropoulos continued. “We expect that this product line, which has had substantial distribution gaps globally, will enhance company growth and profits as we integrate the injection molding and a portion of manufacturing. We have already initiated new product development in both of the acquired businesses,” he said.

Merit said it expects to report adjusted EPS of $1.15 to $1.20 this year, on sales of $713 million to $723 million.

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