Merit Medical Q1 earnings beat The Street, despite shrinking profits

Shares in Merit Medical (NSDQ:MMSI) have risen slightly today in after hours trading after the medical device maker posted first quarter earnings that beat consensus on Wall Street but saw profits shrink over 50%.

The South Jordan, Utah-based company posted profits of $5.3 million, or 10¢ per share, on sales of $203 million for the three months ended March 31, seeing profits shrink 64.4% while sales grew 18.7% compared with the same period last year.

Adjusted to exclude one-time items, earnings per share were 31¢, ahead of the 29¢ consensus on The Street, where analysts were looking for sales of $192.6 million.

“The first quarter of 2018 was an extraordinarily active quarter in all aspects of our business. We closed the BD transaction and initiated order to cash activities in the U.S., Latin America and Canada. The production transition is on schedule. Merit teams of transition specialists activated customer uploads, inventory and logistical transfer and are planning for future production transfers. Cleanrooms in our Tijuana facility are nearing completion, and equipment acquisition and training activities have commenced. In addition to all the activities involving the BD transaction, sales were robust in the first quarter. The products we acquired from Laurane Medical last year have been transferred for production to our Galway, Ireland facility and are scheduled to launch in the second quarter. Because of restrained capacity, new sales activities had been controlled to meet existing demand. New capacity is now on line, and stock is being prepared for full release. During the first quarter, Merit received 510(k) clearances for the Prelude IDeal hydrophilic sheath introducer and PreludeSYNC distal access device as well as the Merit Pursue microcatheter. Recently we entered into a long-term agreement with NinePoint Medical to become the exclusive worldwide distributor for the NvisionVLE imaging system with real-time targeting using optical coherence tomography.  We believe this product line will enhance the product offerings of our Endotek Division and will be another step to adding therapy and disease-state products to our accessories. Although the products have both 510(k) and CE mark clearances, sales have been limited to the United States due to resource limitations.  Merit plans to launch these globally on a measured basis, which we anticipate will strengthen our global Endotek expansion. We are off to a good start with a full pipeline of new products and opportunities as well as continued focus on the goals and objectives we have committed to our shareholders,” chair & CEO Fred Lampropoulos said in a press release.

Shares in Merit Medical have risen 4.3% in after-hours trading, at $47 as of 4:28 p.m. EDT.

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