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x
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Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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for the fiscal year ended December 31, 2016
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or
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o
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Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.
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Utah
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0-18592
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87-0447695
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(State or other jurisdiction of incorporation or organization)
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(Commission File No.)
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(IRS Employer Identification No.)
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Large accelerated filer
x
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Accelerated filer
o
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Non-accelerated filer
¨
(Do not check if a smaller reporting company)
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Smaller reporting company
o
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•
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risks relating to managing growth, particularly if accomplished through acquisitions, and the integration of acquired businesses;
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•
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risks relating to protecting our intellectual property;
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•
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claims by third parties that we infringe their intellectual property rights which could cause us to incur significant legal or licensing expenses and prevent us from selling our products;
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•
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greater scrutiny and regulation by governmental authorities, including risks relating to the subpoena we received in October 2016 from the U.S. Department of Justice seeking information on our marketing and promotional practices;
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•
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risks relating to our products being used in unapproved circumstances;
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•
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risks relating to significant adverse changes in, or our failure to comply, with governing regulations;
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•
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FDA regulatory clearances processes and any failure to obtain and maintain required regulatory clearances and approvals;
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•
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failure to comply with export control laws, customs laws, sanctions laws and other laws governing our operations in the U.S. and other countries, which could subject us to civil or criminal penalties, other remedial measures and legal expenses;
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•
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disruption of our critical information systems or material breaches in the security of our systems;
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•
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restrictions and limitations in our debt agreements and instruments, which could affect our ability to operate our business and our liquidity;
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•
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expending significant resources for research, development, testing and regulatory approval or clearance of our products under development and any failure to develop the products or obtain approvals for commercial use;
|
•
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violations of laws targeting fraud and abuse in the healthcare industry:
|
•
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risks relating to healthcare reform legislation negatively affecting our financial results, business, operations or financial condition;
|
•
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loss of key personnel;
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•
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product liability claims;
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•
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failure to report adverse medical events to the FDA, which may subject us to sanctions that may materially harm our business;
|
•
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failure to maintain or establish sales capabilities on our own or through third parties, which may result in our inability to commercialize any of our products in countries where we lack direct sales and marketing capabilities;
|
•
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our estimates on the addressable market for our product groups have not been established with precision, and may be smaller than we estimate;
|
•
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demands for price concessions resulting from consolidations in the healthcare industry, group purchasing organizations or public procurement policies;
|
•
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inability to compete in markets, particularly if there is a significant change in relevant practices or technology;
|
•
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fluctuations in foreign currency exchange rates negatively impacting our financial results;
|
•
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termination or interruption of our supply relationships or increases in the price of our component parts, finished products, third-party services or raw materials, particularly petroleum-based products;
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•
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inability to accurately forecast customer demand for our products or manage our inventory, including rapid increases in the demand for our products;
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•
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changes in international and national economic and industry conditions;
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•
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inability to generate sufficient cash flow to fund our debt obligations, capital expenditures, and ongoing operations;
|
•
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risks relating to our revenues being derived from a few products and medical procedures;
|
•
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volatility of the market price of our common stock;
|
•
|
risks relating to work stoppage, transportation interruptions, severe weather and natural disasters;
|
•
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fluctuations in our effective tax rate adversely affecting our business, financial condition or results of operation;
|
•
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limits on reimbursement imposed by governmental and other programs;
|
•
|
failure to comply with applicable environmental laws and regulations; and
|
•
|
other factors referenced in our press releases and in our reports filed with the Securities and Exchange Commission (the “SEC”).
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Item 1.
|
Business.
|
•
|
enhancing growth and profitability through research and development, sales model optimization, strategic acquisitions and alliances, cost discipline, and operational focus;
|
•
|
optimizing our operational capability through lean processes, cost effective environments, and asset utilization;
|
•
|
targeting high-growth, high-return opportunities by understanding, innovating, acquiring and delivering in peripheral, cardiac, interventional oncology and spine, and endoscopy product groups; and
|
•
|
maintaining a highly disciplined, customer-focused enterprise guided by strong core values to globally address unmet or underserved healthcare needs.
|
•
|
Dallas, Texas
|
•
|
Galway, Ireland
|
•
|
Jackson Township, New Jersey
|
•
|
Malvern, Pennsylvania
|
•
|
Paris, France
|
•
|
Pearland, Texas
|
•
|
San Jose, California
|
•
|
South Jordan, Utah
|
•
|
Venlo, The Netherlands
|
•
|
Class I devices are those for which safety and effectiveness can be reasonably assured by adherence to the FDA’s general regulatory controls, which include compliance with the applicable portions of the FDA’s Quality System Regulations (QSRs), facility registration and product listing, reporting of certain adverse medical events and malfunctions, and compliance with FDA’s restrictions against misbranding and adulteration. While most Class I devices are exempt from the 510(k) premarket notification process, some Class I devices also require 510(k) clearance by the FDA.
|
•
|
Class II devices are subject to the FDA’s general controls, including the design control requirements of the QSRs, and any other special controls deemed necessary by the FDA to provide reasonable assurance of the safety and effectiveness of the device. Premarket review and clearance by the FDA for Class II devices are accomplished through the 510(k) premarket notification procedure.
|
•
|
Class III devices are those deemed by the FDA to pose the greatest risk, such as life-sustaining, life-supporting or implantable devices, or those devices deemed not substantially equivalent to a legally marketed predicate device. Class III devices include those devices for which FDA has determined that general and special controls alone are insufficient to assure the safety and effectiveness of the device.
|
Item 1A.
|
Risk Factors.
|
•
|
be developed successfully;
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•
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be proven safe or effective in clinical trials;
|
•
|
offer therapeutic or other improvements over current treatments and products;
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•
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meet applicable regulatory standards or receive regulatory approvals or clearances;
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•
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be capable of production in commercial quantities at acceptable costs and in compliance with regulatory requirements;
|
•
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be successfully marketed; or
|
•
|
be covered by private or public insurers.
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Item 1B.
|
Unresolved Staff Comments.
|
Item 2.
|
Properties.
|
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Owned
|
|
Leased
|
|
Total
|
||||||
U.S.
|
544,525
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|
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446,314
|
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|
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990,839
|
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International
|
232,356
|
|
|
|
347,390
|
|
|
|
579,746
|
|
|
Total
|
776,881
|
|
|
|
793,704
|
|
|
|
1,570,585
|
|
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Item 3.
|
Legal Proceedings.
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Item 4.
|
Mine Safety Disclosures.
|
Item 5.
|
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
|
For the year ended December 31, 2016
|
|
High
|
|
Low
|
||||
First Quarter
|
|
$
|
19.49
|
|
|
$
|
15.47
|
|
Second Quarter
|
|
$
|
20.59
|
|
|
$
|
17.94
|
|
Third Quarter
|
|
$
|
25.08
|
|
|
$
|
19.61
|
|
Fourth Quarter
|
|
$
|
26.85
|
|
|
$
|
20.70
|
|
For the year ended December 31, 2015
|
|
High
|
|
Low
|
||||
First Quarter
|
|
$
|
19.96
|
|
|
$
|
15.20
|
|
Second Quarter
|
|
$
|
22.15
|
|
|
$
|
18.28
|
|
Third Quarter
|
|
$
|
26.42
|
|
|
$
|
21.00
|
|
Fourth Quarter
|
|
$
|
25.50
|
|
|
$
|
17.60
|
|
|
12/2011
|
|
12/2012
|
|
12/2013
|
|
12/2014
|
|
12/2015
|
|
12/2016
|
||||||||||||
Merit Medical Systems, Inc.
|
$
|
100
|
|
|
$
|
104
|
|
|
$
|
118
|
|
|
$
|
130
|
|
|
$
|
139
|
|
|
$
|
198
|
|
NASDAQ Stock Market (U.S. Companies)
|
100
|
|
|
118
|
|
|
165
|
|
|
190
|
|
|
205
|
|
|
225
|
|
||||||
NASDAQ Stocks (SIC 3840-3849 U.S. Companies)
|
100
|
|
|
109
|
|
|
131
|
|
|
152
|
|
|
165
|
|
|
172
|
|
NOTE:
|
Performance graph data is complete through last fiscal year. Performance graph with peer group uses peer group only performance (excludes only Merit). Peer group indices use beginning of period market capitalization weighting. Index Data: Calculated (or Derived) based from CRSP NASDAQ Stock Market (US Companies), Center for Research in Security Prices (CRSP®), Graduate School of Business, The University of Chicago. Copyright 2017. Used with permission. All rights reserved.
|
|
|
|
Number of
securities to be
issued upon
exercise of
outstanding
options, warrants
and rights
|
|
Weighted-average
exercise price of
outstanding options,
warrants and rights
|
|
Number of securities
remaining available for
future issuance under
equity compensation plans
(excluding securities
reflected in column (a))
|
||
Plan category
|
|
(a)
|
|
(b)
|
|
(c)
|
|||
Equity compensation Plans approved by security holders
|
|
2,817 (1),(3)
|
|
$
|
15.32
|
|
|
1,854 (2),(3)
|
|
|
|
|
|
|
|
|
|
Item 6.
|
Selected Financial Data (in thousands, except per share amounts).
|
|
|
|
|
||||||||||||||||
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||
OPERATING DATA:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Net Sales
|
$
|
603,838
|
|
|
$
|
542,149
|
|
|
$
|
509,689
|
|
|
$
|
449,049
|
|
|
$
|
394,288
|
|
Cost of Sales
|
338,813
|
|
|
306,368
|
|
|
284,467
|
|
|
254,682
|
|
|
212,296
|
|
|||||
Gross Profit
|
265,025
|
|
|
235,781
|
|
|
225,222
|
|
|
194,367
|
|
|
181,992
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Selling, general, and administrative
|
184,398
|
|
|
156,348
|
|
|
147,894
|
|
|
128,642
|
|
|
122,106
|
|
|||||
Research and development
|
45,229
|
|
|
40,810
|
|
|
36,632
|
|
|
33,886
|
|
|
27,795
|
|
|||||
Intangible asset impairment charge
|
—
|
|
|
—
|
|
|
1,102
|
|
|
8,089
|
|
|
—
|
|
|||||
Contingent consideration expense (benefit)
|
61
|
|
|
80
|
|
|
(572
|
)
|
|
(4,094
|
)
|
|
—
|
|
|||||
Acquired in-process research and development
|
461
|
|
|
1,000
|
|
|
—
|
|
|
—
|
|
|
2,450
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Total operating expenses
|
230,149
|
|
|
198,238
|
|
|
185,056
|
|
|
166,523
|
|
|
152,351
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Income from Operations
|
34,876
|
|
|
37,543
|
|
|
40,166
|
|
|
27,844
|
|
|
29,641
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Other Income (Expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Interest income
|
81
|
|
|
272
|
|
|
217
|
|
|
255
|
|
|
226
|
|
|||||
Interest expense
|
(8,798
|
)
|
|
(6,229
|
)
|
|
(8,829
|
)
|
|
(8,044
|
)
|
|
(604
|
)
|
|||||
Other income (expense)
|
(773
|
)
|
|
(386
|
)
|
|
18
|
|
|
(216
|
)
|
|
(1,645
|
)
|
|||||
Other income (expense)—net
|
(9,490
|
)
|
|
(6,343
|
)
|
|
(8,594
|
)
|
|
(8,005
|
)
|
|
(2,023
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Income Before Income Taxes
|
25,386
|
|
|
31,200
|
|
|
31,572
|
|
|
19,839
|
|
|
27,618
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Income Tax Expense
|
5,265
|
|
|
7,398
|
|
|
8,598
|
|
|
3,269
|
|
|
7,908
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Net Income
|
$
|
20,121
|
|
|
$
|
23,802
|
|
|
$
|
22,974
|
|
|
$
|
16,570
|
|
|
$
|
19,710
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Earnings Per Common Share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Diluted
|
$
|
0.45
|
|
|
$
|
0.53
|
|
|
$
|
0.53
|
|
|
$
|
0.39
|
|
|
$
|
0.46
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Average Common Shares:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Diluted
|
44,862
|
|
|
44,511
|
|
|
43,409
|
|
|
42,884
|
|
|
42,610
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
BALANCE SHEET DATA:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Working capital
|
$
|
155,092
|
|
|
$
|
116,093
|
|
|
$
|
116,910
|
|
|
$
|
100,321
|
|
|
$
|
88,992
|
|
Total assets
|
942,803
|
|
|
778,728
|
|
|
747,165
|
|
|
728,283
|
|
|
705,309
|
|
|||||
Long-term debt, less current portion
|
314,373
|
|
|
197,593
|
|
|
214,490
|
|
|
238,854
|
|
|
227,566
|
|
|||||
Stockholders’ equity
|
498,189
|
|
|
466,103
|
|
|
435,259
|
|
|
405,706
|
|
|
381,577
|
|
Item 7.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations.
|
•
|
CorVocet™ Biopsy System
|
•
|
SwiftNINJA® Steerable Microcatheter
|
•
|
Elation® GI & Pulmonary Balloons
|
•
|
TWISTER® PLUS Rotatable Retrieval Device
|
•
|
PreludeEASE™ Hydrophilic Sheath Introducer
|
•
|
PreludeSync™ Radial Compression Device
|
•
|
HeRO® Graft
|
•
|
Super HeRO®
|
•
|
True Form™ Guide Wires
|
•
|
Heartspan® Transseptal Sheath
|
•
|
Amplatz Guide Wires
|
•
|
Merit PAK™ Pedal Access
|
•
|
Critical Care Products acquired from Argon
|
•
|
Dual Cap® Disinfection and Protection acquired from Catheter Connections
|
•
|
We anticipate continued international expansion through the transition from a distributor-based sales model to a modified direct sales model, which is already in place in a number of markets, including China. We believe this transition will improve revenue growth opportunities by providing us with greater control over the sales channel and improving gross margins, as we move from a wholesale channel to a retail channel. On the other hand, the transition may result in increased costs, primarily as a result of increased compensation expenses for existing and new sales personnel.
|
•
|
We also anticipate we will continue to expand product registrations of existing products and introduce new products in new and emerging markets, in an effort to increase the breadth of our product portfolio offered in international markets, thereby supporting revenue growth and margin expansion. Improvement in gross margin remains a key priority for management, through the management of product mix, continued improvement of operational performance and continued new product introductions. However, any reversal in the aforementioned trends could have a negative impact on our future revenue and gross margin.
|
•
|
Our revenue growth has been driven by, and we expect our revenue to continue to increase in the future as a result of, the introduction of new products, continued international expansion, and increased physician awareness of our products, among other factors. Any reversal in these trends could have a negative impact on our future revenue. In addition, we have continuously expanded our sales and marketing infrastructure to help us drive and support revenue growth and we intend to continue this expansion.
|
•
|
Our revenue may fluctuate, from quarter to quarter, as well as within each quarter, due to a variety of factors, including the seasonality of demand for our products, foreign exchange fluctuations, the timing of new product introductions, competitor product introductions, and associated physician evaluations and competitor pricing changes.
|
•
|
Our gross margin has been, and we expect it will continue to be, affected by a variety of factors, including product sales mix, geographic sales mix and prices, launch of new products, the impact of distributor relationships and our focus on expanding to a modified direct sales model, production volumes, manufacturing costs and product yields, and the implementation of cost-reduction strategies. As we continue to expand through acquisitions, the acquisitions may be gross margin dilutive. Our gross margins could be negatively affected to the extent that the products acquired have gross margins that differ from ours. For example, the gross margin for Argon is less than our current gross margin. However, improvement in gross margin remains a key priority for management, through the control of product mix, continued improvement of operational performance and continued introductions of new product.
|
•
|
The integration of recently completed acquisitions may increase our operating expenses, and it may take time to realize expected revenue from acquisitions. While we expect to integrate our acquired businesses successfully, the expected synergies may not materialize.
|
•
|
We continue to experience a variety of financial risks including changes in foreign currency exchange rates, especially when our acquisitions increase the proportion of our revenue from international sales; risks associated with our variable floating rate borrowings, which could negatively affect us in an increasing interest rate environment; and the potentially substantial changes to fiscal, healthcare, trade and tax policies and legislation, which may include comprehensive tax reform and changes to existing trade agreements, including, but not limited to, NAFTA, as well as healthcare reform, including the potential repeal of certain provisions of the PPACA.
|
|
2016
|
|
2015
|
|
2014
|
Net sales
|
100%
|
|
100%
|
|
100%
|
Gross profit
|
43.9
|
|
43.5
|
|
44.2
|
Selling, general and administrative expenses
|
30.5
|
|
28.8
|
|
29.0
|
Research and development expenses
|
7.5
|
|
7.5
|
|
7.2
|
Acquired in-process research and development
|
0.1
|
|
0.2
|
|
—
|
Intangible asset impairment charge
|
—
|
|
—
|
|
0.2
|
Contingent consideration expense (benefit)
|
—
|
|
—
|
|
(0.1)
|
Income from operations
|
5.8
|
|
6.9
|
|
7.9
|
Income before income taxes
|
4.2
|
|
5.8
|
|
6.2
|
Net income
|
3.3
|
|
4.4
|
|
4.5
|
|
% Change
|
|
2016
|
|
% Change
|
|
2015
|
|
% Change
|
|
2014
|
||||||
Cardiovascular
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Stand-alone devices
|
25%
|
|
$
|
193,517
|
|
|
8%
|
|
$
|
155,414
|
|
|
15%
|
|
$
|
143,712
|
|
Custom kits and procedure trays
|
3%
|
|
119,392
|
|
|
5%
|
|
116,368
|
|
|
7%
|
|
111,076
|
|
|||
Inflation devices
|
1%
|
|
73,919
|
|
|
1%
|
|
73,373
|
|
|
10%
|
|
72,538
|
|
|||
Catheters
|
15%
|
|
110,939
|
|
|
11%
|
|
96,833
|
|
|
17%
|
|
87,550
|
|
|||
Embolization devices
|
2%
|
|
46,035
|
|
|
3%
|
|
45,025
|
|
|
31%
|
|
43,855
|
|
|||
CRM/EP
|
8%
|
|
36,446
|
|
|
3%
|
|
33,902
|
|
|
17%
|
|
32,975
|
|
|||
Total
|
11%
|
|
580,248
|
|
|
6%
|
|
520,915
|
|
|
14%
|
|
491,706
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Endoscopy
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Endoscopy devices
|
11%
|
|
23,590
|
|
|
18%
|
|
21,234
|
|
|
6%
|
|
17,983
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total
|
11%
|
|
$
|
603,838
|
|
|
6%
|
|
$
|
542,149
|
|
|
14%
|
|
$
|
509,689
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
Operating Income
|
|
|
|
|
|
|
|
||||
Cardiovascular
|
$
|
30,120
|
|
|
$
|
34,052
|
|
|
$
|
38,601
|
|
Endoscopy
|
4,756
|
|
|
3,491
|
|
|
1,565
|
|
|||
Total operating income
|
$
|
34,876
|
|
|
$
|
37,543
|
|
|
$
|
40,166
|
|
|
|
Payment due by period (in thousands)
|
||||||||||||||||||
Contractual Obligations
|
|
Total
|
|
Less than 1 Year
|
|
1-3 Years
|
|
4-5 Years
|
|
After 5 Years
|
||||||||||
Long-term debt
|
|
$
|
325,000
|
|
|
$
|
10,000
|
|
|
$
|
27,500
|
|
|
$
|
287,500
|
|
|
$
|
—
|
|
Interest on long-term debt (1)
|
|
34,787
|
|
|
7,748
|
|
|
15,697
|
|
|
11,342
|
|
|
—
|
|
|||||
Operating leases
|
|
69,931
|
|
|
10,168
|
|
|
17,223
|
|
|
9,804
|
|
|
32,736
|
|
|||||
Royalty obligations
|
|
333
|
|
|
50
|
|
|
100
|
|
|
85
|
|
|
98
|
|
|||||
Total contractual cash
|
|
$
|
430,051
|
|
|
$
|
27,966
|
|
|
$
|
60,520
|
|
|
$
|
308,731
|
|
|
$
|
32,834
|
|
Item 7A.
|
Quantitative and Qualitative Disclosures About Market Risk.
|
Currency
|
Symbol
|
Forward Notional Amount
|
|
Euro
|
EUR
|
20,657
|
|
British Pound
|
GBP
|
975
|
|
Chinese Yuan Renminbi
|
CNY
|
16,615
|
|
Mexican Peso
|
MXN
|
19,125
|
|
Brazilian Real
|
BRL
|
5,100
|
|
Australian Dollar
|
AUD
|
4,150
|
|
Hong Kong Dollar
|
HKD
|
11,000
|
|
Swiss Franc
|
CHF
|
230
|
|
Swedish Krona
|
SEK
|
3,035
|
|
Canadian Dollar
|
CAD
|
4,320
|
|
Currency
|
Symbol
|
Forward Notional Amount
|
|
Euro
|
EUR
|
11,065
|
|
Swiss Franc
|
CHF
|
1,303
|
|
Danish Krone
|
DKK
|
8,795
|
|
British Pound
|
GBP
|
3,115
|
|
Mexican Peso
|
MXN
|
76,525
|
|
Swedish Krona
|
SEK
|
13,165
|
|
Item 8.
|
Financial Statements and Supplementary Data.
|
/s/ DELOITTE & TOUCHE LLP
|
|
|
|
Salt Lake City, Utah
|
|
March 1, 2017
|
|
MERIT MEDICAL SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
YEARS ENDED DECEMBER 31, 2016, 2015 AND 2014
(In thousands, except per share amounts)
|
|||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
NET SALES
|
$
|
603,838
|
|
|
$
|
542,149
|
|
|
$
|
509,689
|
|
|
|
|
|
|
|
||||||
COST OF SALES
|
338,813
|
|
|
306,368
|
|
|
284,467
|
|
|||
|
|
|
|
|
|
||||||
GROSS PROFIT
|
265,025
|
|
|
235,781
|
|
|
225,222
|
|
|||
|
|
|
|
|
|
||||||
OPERATING EXPENSES:
|
|
|
|
|
|
|
|||||
Selling, general and administrative
|
184,398
|
|
|
156,348
|
|
|
147,894
|
|
|||
Research and development
|
45,229
|
|
|
40,810
|
|
|
36,632
|
|
|||
Intangible asset impairment charges
|
—
|
|
|
—
|
|
|
1,102
|
|
|||
Contingent consideration expense (benefit)
|
61
|
|
|
80
|
|
|
(572
|
)
|
|||
Acquired in-process research and development
|
461
|
|
|
1,000
|
|
|
—
|
|
|||
|
|
|
|
|
|
||||||
Total operating expenses
|
230,149
|
|
|
198,238
|
|
|
185,056
|
|
|||
|
|
|
|
|
|
||||||
INCOME FROM OPERATIONS
|
34,876
|
|
|
37,543
|
|
|
40,166
|
|
|||
|
|
|
|
|
|
||||||
OTHER INCOME (EXPENSE):
|
|
|
|
|
|
|
|||||
Interest income
|
81
|
|
|
272
|
|
|
217
|
|
|||
Interest expense
|
(8,798
|
)
|
|
(6,229
|
)
|
|
(8,829
|
)
|
|||
Other income (expense) — net
|
(773
|
)
|
|
(386
|
)
|
|
18
|
|
|||
|
|
|
|
|
|
||||||
Other expense — net
|
(9,490
|
)
|
|
(6,343
|
)
|
|
(8,594
|
)
|
|||
|
|
|
|
|
|
||||||
INCOME BEFORE INCOME TAXES
|
25,386
|
|
|
31,200
|
|
|
31,572
|
|
|||
|
|
|
|
|
|
||||||
INCOME TAX EXPENSE
|
5,265
|
|
|
7,398
|
|
|
8,598
|
|
|||
|
|
|
|
|
|
||||||
NET INCOME
|
$
|
20,121
|
|
|
$
|
23,802
|
|
|
$
|
22,974
|
|
|
|
|
|
|
|
||||||
EARNINGS PER COMMON SHARE:
|
|
|
|
|
|
|
|||||
Basic
|
$
|
0.45
|
|
|
$
|
0.54
|
|
|
$
|
0.53
|
|
|
|
|
|
|
|
||||||
Diluted
|
$
|
0.45
|
|
|
$
|
0.53
|
|
|
$
|
0.53
|
|
|
|
|
|
|
|
||||||
AVERAGE COMMON SHARES:
|
|
|
|
|
|
||||||
Basic
|
44,408
|
|
|
44,036
|
|
|
43,143
|
|
|||
|
|
|
|
|
|
||||||
Diluted
|
44,862
|
|
|
44,511
|
|
|
43,409
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
Net income
|
$
|
20,121
|
|
|
$
|
23,802
|
|
|
$
|
22,974
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
||||||
Cash Flow Hedges
|
4,784
|
|
|
(571
|
)
|
|
(630
|
)
|
|||
Less income tax benefit (expense)
|
(1,861
|
)
|
|
222
|
|
|
245
|
|
|||
Foreign currency translation adjustment
|
878
|
|
|
(3,037
|
)
|
|
(3,160
|
)
|
|||
Less income tax benefit (expense)
|
(196
|
)
|
|
311
|
|
|
190
|
|
|||
Total other comprehensive income (loss)
|
3,605
|
|
|
(3,075
|
)
|
|
(3,355
|
)
|
|||
Total comprehensive income
|
$
|
23,726
|
|
|
$
|
20,727
|
|
|
$
|
19,619
|
|
MERIT MEDICAL SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
YEARS ENDED DECEMBER 31, 2016, 2015 AND 2014
(In thousands)
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
Accumulated Other
|
|||||||||
|
|
|
Common Stock
|
|
Retained
|
|
Comprehensive
|
|||||||||||
|
Total
|
|
Shares
|
|
Amount
|
|
Earnings
|
|
Income (Loss)
|
|||||||||
BALANCE — January 1, 2014
|
$
|
405,706
|
|
|
42,846
|
|
|
$
|
177,775
|
|
|
$
|
226,988
|
|
|
$
|
943
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net income
|
22,974
|
|
|
|
|
|
|
|
|
22,974
|
|
|
|
|
||||
Other comprehensive loss
|
(3,355
|
)
|
|
|
|
|
|
|
|
|
|
|
(3,355
|
)
|
||||
Excess tax benefits from stock-based compensation
|
576
|
|
|
|
|
|
576
|
|
|
|
|
|
|
|
||||
Stock-based compensation expense
|
1,460
|
|
|
|
|
|
1,460
|
|
|
|
|
|
|
|
||||
Options exercised
|
9,638
|
|
|
878
|
|
|
9,638
|
|
|
|
|
|
|
|
||||
Issuance of common stock under Employee Stock Purchase Plans
|
450
|
|
|
33
|
|
|
450
|
|
|
|
|
|
|
|
||||
Shares surrendered in exchange for payment of payroll tax liabilities
|
(249
|
)
|
|
(16
|
)
|
|
(249
|
)
|
|
|
|
|
||||||
Shares surrendered in exchange for exercise of stock options
|
(1,941
|
)
|
|
(127
|
)
|
|
(1,941
|
)
|
|
|
|
|
||||||
BALANCE — December 31, 2014
|
435,259
|
|
|
43,614
|
|
|
187,709
|
|
|
249,962
|
|
|
(2,412
|
)
|
||||
|
|
|
|
|
|
|
|
|
|
|||||||||
Net income
|
23,802
|
|
|
|
|
|
|
|
|
23,802
|
|
|
|
|
||||
Other comprehensive loss
|
(3,075
|
)
|
|
|
|
|
|
|
|
|
|
|
(3,075
|
)
|
||||
Excess tax benefits from stock-based compensation
|
2,124
|
|
|
|
|
|
2,124
|
|
|
|
|
|
|
|
||||
Stock-based compensation expense
|
2,243
|
|
|
|
|
|
2,243
|
|
|
|
|
|
|
|
||||
Options exercised
|
10,029
|
|
|
858
|
|
|
10,029
|
|
|
|
|
|
||||||
Issuance of common stock under Employee Stock Purchase Plans
|
441
|
|
|
23
|
|
|
441
|
|
|
|
|
|
|
|
||||
Shares surrendered in exchange for payment of payroll tax liabilities
|
(918
|
)
|
|
(43
|
)
|
|
(918
|
)
|
|
|
|
|
||||||
Shares surrendered in exchange for exercise of stock options
|
(3,802
|
)
|
|
(185
|
)
|
|
(3,802
|
)
|
|
|
|
|
|
|
||||
BALANCE — December 31, 2015
|
466,103
|
|
|
44,267
|
|
|
197,826
|
|
|
273,764
|
|
|
(5,487
|
)
|
||||
|
|
|
|
|
|
|
|
|
|
|||||||||
Net income
|
20,121
|
|
|
|
|
|
|
20,121
|
|
|
|
|||||||
Other comprehensive income
|
3,605
|
|
|
|
|
|
|
|
|
3,605
|
|
|||||||
Excess tax benefits from stock-based compensation
|
669
|
|
|
|
|
669
|
|
|
|
|
|
|||||||
Stock-based compensation expense
|
2,506
|
|
|
|
|
2,506
|
|
|
|
|
|
|||||||
Options exercised
|
4,923
|
|
|
362
|
|
|
4,923
|
|
|
|
|
|
||||||
Issuance of common stock under Employee Stock Purchase Plans
|
694
|
|
|
34
|
|
|
694
|
|
|
|
|
|
||||||
Shares surrendered in exchange for payment of payroll tax liabilities
|
(86
|
)
|
|
(4
|
)
|
|
(86
|
)
|
|
|
|
|
||||||
Shares surrendered in exchange for exercise of stock options
|
(346
|
)
|
|
(14
|
)
|
|
(346
|
)
|
|
|
|
|
||||||
BALANCE — December 31, 2016
|
$
|
498,189
|
|
|
44,645
|
|
|
$
|
206,186
|
|
|
$
|
293,885
|
|
|
$
|
(1,882
|
)
|
Customer lists
|
5
|
-
|
14 years
|
Developed technology
|
8
|
-
|
15 years
|
Distribution agreements
|
3
|
-
|
12 years
|
License agreements and trademarks
|
4
|
-
|
15 years
|
Covenants not to compete
|
7
|
-
|
10 years
|
Patents
|
17 years
|
||
Royalty agreements
|
5 years
|
Buildings
|
40 years
|
||
Manufacturing equipment
|
4
|
-
|
20 years
|
Furniture and fixtures
|
3
|
-
|
20 years
|
Land improvements
|
10
|
-
|
20 years
|
Leasehold improvements
|
4
|
-
|
25 years
|
Assets Acquired
|
|
||
Trade receivables
|
$
|
4,054
|
|
Other receivables
|
6
|
|
|
Inventories
|
8,585
|
|
|
Prepaid expenses
|
630
|
|
|
Property and equipment
|
1,630
|
|
|
Other long-term assets
|
145
|
|
|
Intangibles
|
|
||
Developed technology
|
67,600
|
|
|
Customer lists
|
2,400
|
|
|
Trademarks
|
4,400
|
|
|
Goodwill
|
24,818
|
|
|
Total assets acquired
|
114,268
|
|
|
|
|
||
Liabilities Assumed
|
|
||
Trade payables
|
(1,790
|
)
|
|
Accrued expenses
|
(5,298
|
)
|
|
Deferred income tax liabilities - current
|
(701
|
)
|
|
Deferred income tax liabilities - noncurrent
|
(10,844
|
)
|
|
Total liabilities assumed
|
(18,633
|
)
|
|
|
|
||
Net assets acquired, net of cash received of $1,327
|
$
|
95,635
|
|
|
2016
|
|
2015
|
||||||||||||
|
As Reported
|
|
Pro Forma
|
|
As Reported
|
|
Pro Forma
|
||||||||
Net Sales
|
$
|
603,838
|
|
|
$
|
621,463
|
|
|
$
|
542,149
|
|
|
$
|
575,541
|
|
Net Income
|
20,121
|
|
|
9,825
|
|
|
23,802
|
|
|
3,135
|
|
||||
Earnings per common share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.45
|
|
|
$
|
0.22
|
|
|
$
|
0.54
|
|
|
$
|
0.07
|
|
Diluted
|
$
|
0.45
|
|
|
$
|
0.22
|
|
|
$
|
0.53
|
|
|
$
|
0.07
|
|
Assets Acquired
|
|
||
Inventories
|
$
|
2,455
|
|
Property and equipment
|
290
|
|
|
Intangibles
|
|
||
Developed technology
|
12,100
|
|
|
Trademarks
|
700
|
|
|
Customers Lists
|
400
|
|
|
Goodwill
|
2,555
|
|
|
|
|
||
Total assets acquired
|
$
|
18,500
|
|
|
2016
|
|
2015
|
||||
Finished goods
|
$
|
63,852
|
|
|
$
|
59,170
|
|
Work-in-process
|
11,008
|
|
|
8,540
|
|
||
Raw materials
|
45,835
|
|
|
38,289
|
|
||
|
|
|
|
||||
Total
|
$
|
120,695
|
|
|
$
|
105,999
|
|
|
2016
|
|
2015
|
||||
Goodwill balance at January 1
|
$
|
184,472
|
|
|
$
|
184,464
|
|
Effect of foreign exchange
|
82
|
|
|
(52
|
)
|
||
Additions as the result of acquisitions
|
27,373
|
|
|
60
|
|
||
Goodwill balance at December 31
|
$
|
211,927
|
|
|
$
|
184,472
|
|
|
2016
|
||||||||||
|
Gross Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net Carrying
Amount
|
||||||
Patents
|
$
|
14,130
|
|
|
$
|
(3,165
|
)
|
|
$
|
10,965
|
|
Distribution agreements
|
6,626
|
|
|
(3,527
|
)
|
|
3,099
|
|
|||
License agreements
|
20,695
|
|
|
(3,422
|
)
|
|
17,273
|
|
|||
Trademarks
|
12,380
|
|
|
(3,330
|
)
|
|
9,050
|
|
|||
Covenants not to compete
|
1,028
|
|
|
(936
|
)
|
|
92
|
|
|||
Customer lists
|
22,261
|
|
|
(15,401
|
)
|
|
6,860
|
|
|||
Royalty agreements
|
267
|
|
|
(267
|
)
|
|
—
|
|
|||
|
|
|
|
|
|
||||||
Total
|
$
|
77,387
|
|
|
$
|
(30,048
|
)
|
|
$
|
47,339
|
|
|
2015
|
||||||||||
|
Gross Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net Carrying
Amount
|
||||||
Patents
|
$
|
12,014
|
|
|
$
|
(2,595
|
)
|
|
$
|
9,419
|
|
Distribution agreements
|
5,626
|
|
|
(2,853
|
)
|
|
2,773
|
|
|||
License agreements
|
19,109
|
|
|
(2,438
|
)
|
|
16,671
|
|
|||
Trademarks
|
7,259
|
|
|
(2,554
|
)
|
|
4,705
|
|
|||
Covenants not to compete
|
1,028
|
|
|
(873
|
)
|
|
155
|
|
|||
Customer lists
|
20,793
|
|
|
(15,023
|
)
|
|
5,770
|
|
|||
Royalty agreements
|
267
|
|
|
(267
|
)
|
|
—
|
|
|||
|
|
|
|
|
|
||||||
Total
|
$
|
66,096
|
|
|
$
|
(26,603
|
)
|
|
$
|
39,493
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
Domestic
|
$
|
6,174
|
|
|
$
|
9,470
|
|
|
$
|
16,961
|
|
Foreign
|
19,212
|
|
|
21,730
|
|
|
14,611
|
|
|||
|
|
|
|
|
|
||||||
Total
|
$
|
25,386
|
|
|
$
|
31,200
|
|
|
$
|
31,572
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
|
|
|
|
|
||||||
Current expense (benefit):
|
|
|
|
|
|
|
|
|
|||
Federal
|
$
|
1,933
|
|
|
$
|
(17
|
)
|
|
$
|
1,316
|
|
State
|
492
|
|
|
747
|
|
|
768
|
|
|||
Foreign
|
3,802
|
|
|
3,218
|
|
|
2,644
|
|
|||
|
|
|
|
|
|
||||||
Total current expense
|
6,227
|
|
|
3,948
|
|
|
4,728
|
|
|||
|
|
|
|
|
|
||||||
Deferred expense (benefit):
|
|
|
|
|
|
|
|
|
|||
Federal
|
(144
|
)
|
|
3,250
|
|
|
4,078
|
|
|||
State
|
(195
|
)
|
|
294
|
|
|
(119
|
)
|
|||
Foreign
|
(623
|
)
|
|
(94
|
)
|
|
(89
|
)
|
|||
|
|
|
|
|
|
||||||
Total deferred (benefit) expense
|
(962
|
)
|
|
3,450
|
|
|
3,870
|
|
|||
|
|
|
|
|
|
||||||
Total income tax expense
|
$
|
5,265
|
|
|
$
|
7,398
|
|
|
$
|
8,598
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
|
|
|
|
|
||||||
Computed federal income tax expense at statutory rate of 35%
|
$
|
8,885
|
|
|
$
|
10,920
|
|
|
$
|
11,050
|
|
State income taxes
|
193
|
|
|
698
|
|
|
438
|
|
|||
Tax credits
|
(1,164
|
)
|
|
(1,019
|
)
|
|
(888
|
)
|
|||
Production activity deduction
|
(53
|
)
|
|
—
|
|
|
—
|
|
|||
Foreign tax rate differential
|
(3,717
|
)
|
|
(3,564
|
)
|
|
(1,958
|
)
|
|||
Uncertain tax positions
|
597
|
|
|
536
|
|
|
(76
|
)
|
|||
Deferred compensation insurance assets
|
(307
|
)
|
|
182
|
|
|
(81
|
)
|
|||
Transaction-related expenses
|
274
|
|
|
—
|
|
|
—
|
|
|||
Other — including the effect of graduated rates
|
557
|
|
|
(355
|
)
|
|
113
|
|
|||
|
|
|
|
|
|
||||||
Total income tax expense
|
$
|
5,265
|
|
|
$
|
7,398
|
|
|
$
|
8,598
|
|
|
2016
|
|
2015
|
||||
|
|
|
|
||||
Deferred income tax assets:
|
|
|
|
|
|||
Allowance for uncollectible accounts receivable
|
$
|
645
|
|
|
$
|
531
|
|
Accrued compensation expense
|
6,203
|
|
|
5,534
|
|
||
Inventory differences
|
1,065
|
|
|
2,043
|
|
||
Net operating loss carryforwards
|
27,742
|
|
|
11,434
|
|
||
Deferred revenue
|
73
|
|
|
118
|
|
||
Stock-based compensation expense
|
2,738
|
|
|
2,532
|
|
||
Federal research and development credit carryforward
|
3,524
|
|
|
2,355
|
|
||
Foreign tax credits
|
364
|
|
|
600
|
|
||
Other
|
6,984
|
|
|
5,754
|
|
||
Total deferred income tax assets
|
49,338
|
|
|
30,901
|
|
||
|
|
|
|
||||
Deferred income tax liabilities:
|
|
|
|
|
|
||
Prepaid expenses
|
(782
|
)
|
|
(841
|
)
|
||
Property and equipment
|
(25,108
|
)
|
|
(24,467
|
)
|
||
Intangible assets
|
(35,773
|
)
|
|
(6,495
|
)
|
||
Other
|
(1,480
|
)
|
|
(1,077
|
)
|
||
Total deferred income tax liabilities
|
(63,143
|
)
|
|
(32,880
|
)
|
||
Valuation allowance
|
(3,786
|
)
|
|
(1,981
|
)
|
||
Net deferred income tax assets (liabilities)
|
$
|
(17,591
|
)
|
|
$
|
(3,960
|
)
|
|
|
|
|
|
|
||
Reported as:
|
|
|
|
||||
Deferred income tax assets - Current
|
$
|
8,219
|
|
|
$
|
7,025
|
|
Deferred income tax assets - Long-term
|
171
|
|
|
—
|
|
||
Deferred income tax liabilities - Current
|
—
|
|
|
—
|
|
||
Deferred income tax liabilities - Long-term
|
(25,981
|
)
|
|
(10,985
|
)
|
||
Net deferred income tax liabilities
|
$
|
(17,591
|
)
|
|
$
|
(3,960
|
)
|
Tabular Roll-forward
|
2016
|
|
2015
|
|
2014
|
||||||
|
|
|
|
|
|
||||||
Unrecognized tax benefits, opening balance
|
$
|
1,982
|
|
|
$
|
1,736
|
|
|
$
|
2,129
|
|
Gross increases in tax positions taken in a prior year
|
77
|
|
|
187
|
|
|
142
|
|
|||
Gross increases in tax positions taken in the current year
|
856
|
|
|
763
|
|
|
309
|
|
|||
Lapse of applicable statute of limitations
|
(366
|
)
|
|
(704
|
)
|
|
(844
|
)
|
|||
Unrecognized tax benefits, ending balance
|
$
|
2,549
|
|
|
$
|
1,982
|
|
|
$
|
1,736
|
|
|
2016
|
|
2015
|
||||
Payroll taxes
|
$
|
2,406
|
|
|
$
|
2,369
|
|
Payroll
|
7,733
|
|
|
4,971
|
|
||
Bonuses
|
4,470
|
|
|
5,283
|
|
||
Commissions
|
974
|
|
|
790
|
|
||
Vacation
|
8,846
|
|
|
7,748
|
|
||
Royalties
|
1,806
|
|
|
1,499
|
|
||
Value-added tax
|
2,046
|
|
|
1,797
|
|
||
Other accrued expenses
|
16,666
|
|
|
13,389
|
|
||
|
|
|
|
||||
Total
|
$
|
44,947
|
|
|
$
|
37,846
|
|
|
2016
|
|
2015
|
||||
Term loan
|
$
|
145,000
|
|
|
$
|
64,962
|
|
Revolving credit loans
|
180,000
|
|
|
142,631
|
|
||
Less debt issuance costs
|
(627
|
)
|
|
—
|
|
||
Total long-term debt
|
324,373
|
|
|
207,593
|
|
||
Less current portion
|
10,000
|
|
|
10,000
|
|
||
Long-term portion
|
$
|
314,373
|
|
|
$
|
197,593
|
|
Years Ending
|
|
Future Minimum
|
||
December 31
|
|
Principal Payments
|
||
2017
|
|
10,000
|
|
|
2018
|
|
12,500
|
|
|
2019
|
|
15,000
|
|
|
2020
|
|
17,500
|
|
|
2021
|
|
270,000
|
|
|
Total future minimum principal payments
|
|
$
|
325,000
|
|
Currency
|
Symbol
|
Forward Notional Amount
|
|
Euro
|
EUR
|
11,065
|
|
Swiss Franc
|
CHF
|
1,303
|
|
Danish Krone
|
DKK
|
8,795
|
|
British Pound
|
GBP
|
3,115
|
|
Mexican Peso
|
MXN
|
76,525
|
|
Swedish Krona
|
SEK
|
13,165
|
|
Currency
|
Symbol
|
Forward Notional Amount
|
|
Euro
|
EUR
|
20,657
|
|
British Pound
|
GBP
|
975
|
|
Chinese Yuan Renminbi
|
CNY
|
16,615
|
|
Mexican Peso
|
MXN
|
19,125
|
|
Brazilian Real
|
BRL
|
5,100
|
|
Australian Dollar
|
AUD
|
4,150
|
|
Hong Kong Dollar
|
HKD
|
11,000
|
|
Swiss Franc
|
CHF
|
230
|
|
Swedish Krona
|
SEK
|
3,035
|
|
Canadian Dollar
|
CAD
|
4,320
|
|
|
|
As of December 31, 2016
|
|
As of December 31, 2015
|
||||||
|
|
Balance Sheet Location
|
Fair Value
|
|
Balance Sheet Location
|
Fair Value
|
||||
Derivatives designated as hedging instruments
|
|
|
|
|
||||||
Assets
|
|
|
|
|
|
|
||||
Interest rates swaps
|
|
Other assets (long-term)
|
$
|
4,991
|
|
|
Other assets (long-term)
|
$
|
2
|
|
Foreign currency forward contracts
|
|
Prepaid expenses and other assets
|
116
|
|
|
N/A
|
—
|
|
||
Foreign currency forward contracts
|
|
Other assets (long-term)
|
18
|
|
|
N/A
|
—
|
|
||
|
|
|
|
|
|
|
||||
Liabilities
|
|
|
|
|
|
|
||||
Foreign currency forward contracts
|
|
Accrued Expenses
|
(275
|
)
|
|
N/A
|
—
|
|
||
Foreign currency forward contracts
|
|
Other long-term obligations
|
(18
|
)
|
|
N/A
|
—
|
|
||
|
|
|
|
|
|
|
||||
Derivatives not designated as hedging instruments
|
|
|
|
|
||||||
Assets
|
|
|
|
|
|
|
||||
Foreign currency forward contracts
|
|
Prepaid expenses and other assets
|
$
|
220
|
|
|
Other Receivables
|
$
|
115
|
|
Liabilities
|
|
|
|
|
|
|
||||
Foreign currency forward contracts
|
|
Accrued Expenses
|
(171
|
)
|
|
Accrued Expenses
|
(278
|
)
|
|
Amount of Gain/(Loss) recognized in OCI
|
|
|
Amount of Gain/(Loss) reclassified from AOCI
|
||||||||||||
|
Year ended December 31,
|
|
|
Year ended December 31,
|
||||||||||||
|
2016
|
2015
|
2014
|
|
|
2016
|
2015
|
2014
|
||||||||
Derivative instrument
|
|
|
|
Location in statements of income
|
|
|||||||||||
Interest rate swaps
|
$4,989
|
$
|
(571
|
)
|
$
|
(630
|
)
|
|
Interest Expense
|
$718
|
$1,103
|
$587
|
||||
Foreign currency forward contracts
|
68
|
|
—
|
|
—
|
|
|
Revenue
|
21
|
|
—
|
|
—
|
|
||
Foreign currency forward contracts
|
(273
|
)
|
—
|
|
—
|
|
|
Cost of goods sold
|
(26
|
)
|
—
|
|
—
|
|
|
|
|
Year ended December 31,
|
||||||||
|
|
|
2016
|
2015
|
2014
|
||||||
Derivative Instrument
|
Location in statements of income
|
|
|
|
|
||||||
Foreign currency forward contracts
|
Other expense
|
|
$
|
69
|
|
$
|
(302
|
)
|
$
|
8
|
|
Years Ending
|
|
Operating
|
||
December 31
|
|
Leases
|
||
|
|
|
|
|
2017
|
|
$
|
10,168
|
|
2018
|
|
9,062
|
|
|
2019
|
|
8,161
|
|
|
2020
|
|
5,100
|
|
|
2021
|
|
4,704
|
|
|
Thereafter
|
|
32,736
|
|
|
|
|
|
|
|
Total minimum lease payments
|
|
$
|
69,931
|
|
|
Net
Income
|
|
Shares
|
|
Per Share
Amount
|
|||||
Year ended December 31, 2016:
|
|
|
|
|
|
|
|
|
||
Basic EPS
|
$
|
20,121
|
|
|
44,408
|
|
|
$
|
0.45
|
|
Effect of dilutive stock options and warrants
|
|
|
|
454
|
|
|
|
|
||
|
|
|
|
|
|
|||||
Diluted EPS
|
$
|
20,121
|
|
|
44,862
|
|
|
$
|
0.45
|
|
|
|
|
|
|
|
|||||
Year ended December 31, 2015:
|
|
|
|
|
|
|
|
|
||
Basic EPS
|
$
|
23,802
|
|
|
44,036
|
|
|
$
|
0.54
|
|
Effect of dilutive stock options and warrants
|
|
|
|
475
|
|
|
|
|
||
|
|
|
|
|
|
|||||
Diluted EPS
|
$
|
23,802
|
|
|
44,511
|
|
|
$
|
0.53
|
|
|
|
|
|
|
|
|||||
Year ended December 31, 2014:
|
|
|
|
|
|
|
|
|
||
Basic EPS
|
$
|
22,974
|
|
|
43,143
|
|
|
$
|
0.53
|
|
Effect of dilutive stock options and warrants
|
|
|
|
266
|
|
|
|
|
||
|
|
|
|
|
|
|||||
Diluted EPS
|
$
|
22,974
|
|
|
43,409
|
|
|
$
|
0.53
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
Cost of goods sold
|
$
|
472
|
|
|
$
|
398
|
|
|
$
|
198
|
|
Research and development
|
184
|
|
|
122
|
|
|
69
|
|
|||
Selling, general, and administrative
|
1,850
|
|
|
1,723
|
|
|
1,193
|
|
|||
Stock-based compensation expense before taxes
|
$
|
2,506
|
|
|
$
|
2,243
|
|
|
$
|
1,460
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
Total intrinsic value of stock options exercised
|
$
|
3,648
|
|
|
$
|
7,548
|
|
|
$
|
3,505
|
|
Cash received from stock option exercises
|
4,577
|
|
|
6,227
|
|
|
7,697
|
|
|||
Excess tax benefit from the exercise of stock options
|
669
|
|
|
2,124
|
|
|
576
|
|
|
Number
of Shares
|
|
Weighted Average
Exercise Price
|
|
Remaining Contractual
Term (in years)
|
|
Intrinsic
Value
|
|||||
Beginning balance
|
2,408
|
|
|
$
|
14.26
|
|
|
|
|
|
|
|
Granted
|
880
|
|
|
17.43
|
|
|
|
|
|
|
||
Exercised
|
(362
|
)
|
|
13.61
|
|
|
|
|
|
|
||
Forfeited/expired
|
(109
|
)
|
|
14.52
|
|
|
|
|
|
|
||
Outstanding at December 31
|
2,817
|
|
|
15.32
|
|
|
4.4
|
|
$
|
31,476
|
|
|
Exercisable
|
1,033
|
|
|
13.64
|
|
|
2.7
|
|
13,274
|
|
||
Ending vested and expected to vest
|
2,718
|
|
|
15.27
|
|
|
4.4
|
|
30,512
|
|
|
|
|
|
Options Outstanding
|
|
Options Exercisable
|
||||||||||
Range of Exercise
|
|
Number Outstanding
|
|
Weighted Average Remaining Contractual Life (in years)
|
|
Weighted Average Exercise Price
|
|
Number Exercisable
|
|
Weighted Average Exercise Price
|
||||||
$9.95
|
-
|
$13.16
|
|
772
|
|
3.70
|
|
$
|
12.11
|
|
|
393
|
|
$
|
12.23
|
|
$13.75
|
-
|
$16.05
|
|
1,181
|
|
4.02
|
|
$
|
14.84
|
|
|
533
|
|
$
|
13.77
|
|
$16.41
|
-
|
$20.27
|
|
747
|
|
5.54
|
|
$
|
18.35
|
|
|
103
|
|
$
|
18.06
|
|
$21.71
|
-
|
$22.00
|
|
117
|
|
6.54
|
|
$
|
21.94
|
|
|
4
|
|
$
|
21.98
|
|
$9.95
|
-
|
$22.00
|
|
2,817
|
|
|
|
|
|
|
1,033
|
|
|
|
|
% Change
|
|
2016
|
|
% Change
|
|
2015
|
|
% Change
|
|
2014
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Cardiovascular
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Stand-alone devices
|
25%
|
|
$
|
193,517
|
|
|
8%
|
|
$
|
155,414
|
|
|
15%
|
|
$
|
143,712
|
|
Custom kits and procedure trays
|
3%
|
|
119,392
|
|
|
5%
|
|
116,368
|
|
|
7%
|
|
111,076
|
|
|||
Inflation devices
|
1%
|
|
73,919
|
|
|
1%
|
|
73,373
|
|
|
10%
|
|
72,538
|
|
|||
Catheters
|
15%
|
|
110,939
|
|
|
11%
|
|
96,833
|
|
|
17%
|
|
87,550
|
|
|||
Embolization devices
|
2%
|
|
46,035
|
|
|
3%
|
|
45,025
|
|
|
31%
|
|
43,855
|
|
|||
CRM/EP
|
8%
|
|
36,446
|
|
|
3%
|
|
33,902
|
|
|
17%
|
|
32,975
|
|
|||
Total
|
11%
|
|
580,248
|
|
|
6%
|
|
520,915
|
|
|
14%
|
|
491,706
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Endoscopy
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Endoscopy devices
|
11%
|
|
23,590
|
|
|
18%
|
|
21,234
|
|
|
6%
|
|
17,983
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total
|
11%
|
|
$
|
603,838
|
|
|
6%
|
|
$
|
542,149
|
|
|
14%
|
|
$
|
509,689
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
United States
|
$
|
194,715
|
|
|
$
|
186,389
|
|
|
$
|
177,627
|
|
Ireland
|
47,337
|
|
|
48,896
|
|
|
49,708
|
|
|||
Other foreign countries
|
34,521
|
|
|
32,493
|
|
|
16,836
|
|
|||
Total
|
$
|
276,573
|
|
|
$
|
267,778
|
|
|
$
|
244,171
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
Net Sales
|
|
|
|
|
|
|
|
|
|||
Cardiovascular
|
$
|
580,248
|
|
|
$
|
520,915
|
|
|
$
|
491,706
|
|
Endoscopy
|
23,590
|
|
|
21,234
|
|
|
17,983
|
|
|||
Total net sales
|
603,838
|
|
|
542,149
|
|
|
509,689
|
|
|||
|
|
|
|
|
|
||||||
Operating expenses
|
|
|
|
|
|
|
|
|
|||
Cardiovascular
|
218,659
|
|
|
187,492
|
|
|
175,152
|
|
|||
Endoscopy
|
11,490
|
|
|
10,746
|
|
|
9,904
|
|
|||
Total operating expenses
|
230,149
|
|
|
198,238
|
|
|
185,056
|
|
|||
|
|
|
|
|
|
||||||
Operating income (loss)
|
|
|
|
|
|
|
|
|
|||
Cardiovascular
|
30,120
|
|
|
34,052
|
|
|
38,601
|
|
|||
Endoscopy
|
4,756
|
|
|
3,491
|
|
|
1,565
|
|
|||
Total operating income
|
34,876
|
|
|
37,543
|
|
|
40,166
|
|
|||
|
|
|
|
|
|
||||||
Total other expense - net
|
(9,490
|
)
|
|
(6,343
|
)
|
|
(8,594
|
)
|
|||
Income tax expense
|
5,265
|
|
|
7,398
|
|
|
8,598
|
|
|||
|
|
|
|
|
|
||||||
Net income
|
$
|
20,121
|
|
|
$
|
23,802
|
|
|
$
|
22,974
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
Cardiovascular
|
$
|
932,927
|
|
|
$
|
767,952
|
|
|
$
|
734,940
|
|
Endoscopy
|
9,876
|
|
|
10,776
|
|
|
12,225
|
|
|||
Total
|
$
|
942,803
|
|
|
$
|
778,728
|
|
|
$
|
747,165
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
|
|
|
|
|
||||||
Cardiovascular
|
$
|
42,806
|
|
|
$
|
36,474
|
|
|
$
|
34,975
|
|
Endoscopy
|
949
|
|
|
951
|
|
|
954
|
|
|||
Total
|
$
|
43,755
|
|
|
$
|
37,425
|
|
|
$
|
35,929
|
|
|
2016
|
|
2015
|
|
2014
|
||||||
|
|
|
|
|
|
||||||
Cardiovascular
|
$
|
32,613
|
|
|
$
|
50,927
|
|
|
$
|
33,660
|
|
Endoscopy
|
224
|
|
|
32
|
|
|
521
|
|
|||
Total
|
$
|
32,837
|
|
|
$
|
50,959
|
|
|
$
|
34,181
|
|
|
Quarter Ended
|
||||||||||||||
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
||||||||
2016
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net sales
|
$
|
138,077
|
|
|
$
|
151,071
|
|
|
$
|
156,975
|
|
|
$
|
157,715
|
|
Gross profit
|
60,100
|
|
|
66,854
|
|
|
67,815
|
|
|
70,256
|
|
||||
Income from operations
|
7,706
|
|
|
11,581
|
|
|
2,987
|
|
|
12,602
|
|
||||
Income tax expense (benefit)
|
1,555
|
|
|
2,572
|
|
|
(978
|
)
|
|
2,116
|
|
||||
Net income
|
4,351
|
|
|
7,290
|
|
|
973
|
|
|
7,507
|
|
||||
Basic earnings per common share
|
0.10
|
|
|
0.16
|
|
|
0.02
|
|
|
0.17
|
|
||||
Diluted earnings per common share
|
0.10
|
|
|
0.16
|
|
|
0.02
|
|
|
0.17
|
|
||||
|
|
|
|
|
|
|
|
||||||||
2015
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net sales
|
$
|
129,577
|
|
|
$
|
138,082
|
|
|
$
|
136,086
|
|
|
$
|
138,404
|
|
Gross profit
|
55,383
|
|
|
60,886
|
|
|
59,205
|
|
|
60,307
|
|
||||
Income from operations
|
8,704
|
|
|
12,242
|
|
|
8,547
|
|
|
8,050
|
|
||||
Income tax expense
|
2,289
|
|
|
3,122
|
|
|
1,842
|
|
|
145
|
|
||||
Net income
|
5,174
|
|
|
7,401
|
|
|
4,818
|
|
|
6,409
|
|
||||
Basic earnings per common share
|
0.12
|
|
|
0.17
|
|
|
0.11
|
|
|
0.14
|
|
||||
Diluted earnings per common share
|
0.12
|
|
|
0.17
|
|
|
0.11
|
|
|
0.14
|
|
|
|
|
|
Fair Value Measurements Using
|
||||||||||||
|
|
Total Fair
|
|
Quoted prices in
|
|
Significant other
|
|
Significant
|
||||||||
|
|
Value at
|
|
active markets
|
|
observable inputs
|
|
Unobservable inputs
|
||||||||
Description
|
|
December 31, 2016
|
|
(Level 1)
|
|
(Level 2)
|
|
(Level 3)
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Interest rate contracts (1)
|
|
$
|
4,991
|
|
|
$
|
—
|
|
|
$
|
4,991
|
|
|
$
|
—
|
|
Foreign currency contract assets, current and long-term (2)
|
|
$
|
354
|
|
|
$
|
—
|
|
|
$
|
354
|
|
|
$
|
—
|
|
Foreign currency contract liabilities, current and long-term (3)
|
|
$
|
(464
|
)
|
|
$
|
—
|
|
|
$
|
(464
|
)
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
Fair Value Measurements Using
|
||||||||||||
|
|
Total Fair
|
|
Quoted prices in
|
|
Significant other
|
|
Significant
|
||||||||
|
|
Value at
|
|
active markets
|
|
observable inputs
|
|
Unobservable inputs
|
||||||||
Description
|
|
December 31, 2015
|
|
(Level 1)
|
|
(Level 2)
|
|
(Level 3)
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Interest rate contracts (1)
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
—
|
|
Foreign currency contracts (2)
|
|
$
|
(278
|
)
|
|
$
|
—
|
|
|
$
|
(278
|
)
|
|
$
|
—
|
|
|
2016
|
|
2015
|
||||
Beginning balance
|
$
|
1,024
|
|
|
$
|
1,886
|
|
Contingent consideration liability recorded as the result of acquisitions (see Note 2)
|
—
|
|
|
270
|
|
||
Fair value adjustments recorded to income during the period
|
(123
|
)
|
|
80
|
|
||
Contingent payments made
|
(218
|
)
|
|
(1,212
|
)
|
||
Ending balance
|
$
|
683
|
|
|
$
|
1,024
|
|
Contingent consideration asset or liability
|
|
Fair value at December 31, 2016
|
|
Valuation technique
|
|
Unobservable inputs
|
|
Range
|
||
Revenue-based payments
|
|
$
|
683
|
|
|
Discounted cash flow
|
|
Discount rate
|
|
9.9% - 15%
|
contingent liability
|
|
|
|
|
Probability of milestone payment
|
|
100%
|
|||
|
|
|
|
|
|
Projected year of payments
|
|
2017-2028
|
||
|
|
|
|
|
|
|
|
|
||
Contingent receivable
|
|
$
|
528
|
|
|
Discounted cash flow
|
|
Discount rate
|
|
10%
|
asset
|
|
|
|
|
Probability of milestone payment
|
|
57%
|
|||
|
|
|
|
|
|
Projected year of payments
|
|
2017-2019
|
||
|
|
|
|
|
|
|
|
|
||
Contingent consideration liability
|
|
Fair value at December 31, 2015
|
|
Valuation technique
|
|
Unobservable inputs
|
|
Range
|
||
Revenue-based payments
|
|
$
|
874
|
|
|
Discounted cash flow
|
|
Discount rate
|
|
5% - 15%
|
contingent liability
|
|
|
|
|
Probability of milestone payment
|
|
100%
|
|||
|
|
|
|
|
|
Projected year of payments
|
|
2016-2028
|
||
|
|
|
|
|
|
|
|
|
||
Other payments
|
|
$
|
150
|
|
|
Discounted cash flow
|
|
Discount rate
|
|
—%
|
contingent liability
|
|
|
|
|
Probability of milestone payment
|
|
100%
|
|||
|
|
|
|
|
|
Projected year of payments
|
|
2016
|
Item 9A.
|
Controls and Procedures.
|
Item 9B.
|
Other Information.
|
Item 15.
|
Exhibits and Financial Statement Schedules.
|
|
|
|
|
|
|
|
Description
|
|
Balance at
Beginning of Year |
|
Additions Charged to
Costs and Expenses (d) |
|
Deduction
|
|
Balance at
End of Year |
||||
|
|
|
|
|
|
|
|
|
||||
TAX VALUATION ALLOWANCE:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
2014
|
|
(1,363
|
)
|
|
(240
|
)
|
|
—
|
|
|
(1,603
|
)
|
2015
|
|
(1,603
|
)
|
|
(378
|
)
|
|
—
|
|
|
(1,981
|
)
|
2016
|
|
(1,981
|
)
|
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(1,805
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—
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(3,786
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Description
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Exhibit No.
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2.1
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Agreement and Plan of Merger by and among Merit, MMS Transaction Co., a wholly-owned subsidiary of Merit, DFine Inc., certain preferred stockholders and Shareholder Representative Services LLC as a stockholder representative*
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[Form 10-Q filed August 8, 2016, and Form 10-Q/A filed September 2, 2016, Exhibit No. 2.1]
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3.1
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Amended and Restated Articles of Incorporation dated February 28, 2017
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Filed herewith.
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3.2
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Second Amended and Restated Bylaws*
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[Form 8-K filed December 16, 2015]
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4.1
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Specimen Certificate of the Common Stock*
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[Form S–18 filed October 19, 1989, Exhibit No. 10]
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10.1
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Merit Medical Systems, Inc. Long Term Incentive Plan (as amended and restated) dated March 25, 1996*†
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[Form 10-Q filed August 14, 1996, Exhibit No. 2]
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10.2
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Merit Medical Systems, Inc. 401(k) Profit Sharing Plan (as amended effective January 1, 1991*†
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[Form S–1 filed February 14, 1992, Exhibit No. 8]
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10.3
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Lease Agreement dated as of June 8, 1993 for office and manufacturing facility*
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[Form 10–K for year ended December 31, 1994, Exhibit No. 10.4]
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10.4
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Amended and Restated Deferred Compensation Plan*†
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[Form 10-K for year ended December 31, 2003, Exhibit No. 10.12]
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10.5
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Seventh Amendment to the First Restatement of the Merit Medical Systems, Inc. 401(k) Profit Sharing Plan*†
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[Form 10-K for year ended December 31, 2006, Exhibit No. 10.18]
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10.6
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Stock Purchase Agreement by and between Merit Medical Systems, Inc. and Sheen Man Co. LTD, dated April 1, 2007*
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[Form 10-Q filed May 9, 2007, Exhibit No. 10.19]
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10.7
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Eighth Amendment to the First Restatement of the Merit Medical Systems, Inc. 401(k) Profit Sharing Plan*†
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[Form 10-K for year ended December 31, 2007, Exhibit No. 10.20]
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10.8
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Ninth Amendment to the First Restatement of the Merit Medical Systems, Inc. 401(k) Profit Sharing Plan*†
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[Form 10-K for year ended December 31, 2007, Exhibit No. 10.21]
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10.9
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Tenth Amendment to the First Restatement of the Merit Medical Systems, Inc. 401(k) Profit Sharing Plan*†
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[Form 10-K for year ended December 31, 2007, Exhibit No. 10.22]
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10.10
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Merit Medical Systems, Inc. Amended and Restated Deferred Compensation Plan, effective January 1, 2008*†
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[Form 8-K filed December 18, 2008, Exhibit 10.1]
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10.11
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Eleventh Amendment to the First Restatement of the Merit Medical Systems, Inc. 401(k) Profit Sharing Plan*†
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[Form 10-K for year ended December 31, 2008, Exhibit No. 10.29]
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10.12
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Twelfth Amendment to the First Restatement of the Merit Medical Systems, Inc. 401(k) Profit Sharing Plan*†
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[Form 10-K for year ended December 31, 2008, Exhibit No. 10.30]
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10.13
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Second Amendment to the Merit Medical Systems, Inc. 2006 Long-Term Incentive Plan*†
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[Form 8-K filed May 27, 2009, Exhibit 10.1]
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10.14
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Second Restatement of the Merit Medical Systems, Inc. 401(k) Profit Sharing Plan*†
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[Form 8-K filed January 7, 2010, Exhibit 10.1]
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10.15
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Separation Agreement and Release of All Claims of Greg Barnett dated November 3, 2015*†
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[Form 10-K or year ended December 31, 2015, Exhibit No. 10.23]
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10.16
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Separation Agreement and Release of All Claims of Rashelle Perry dated December 1, 2015*†
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[Form 10-K or year ended December 31, 2015, Exhibit No. 10.24]
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10.17
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Separation Agreement and Release of All Claims of Kent W. Stanger dated January 4, 2016*†
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10.18
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Second Amended and Restated Credit Agreement dated as of July 6, 2016 by and among Merit Medical Systems, Inc., Wells Fargo Bank, National Association, Well Fargo Securities, LLC and the lenders named therein*
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[Form 10-Q for quarter ended June 30, 2016, Exhibit No. 10.1]
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10.19
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Form of Indemnification Agreement, dated June 13, 2016, between the Company and each of the following individuals: Fred P. Lampropoulos, Kent W. Stanger, Nolan E. Karras, A. Scott Anderson, Richard W. Edelman, Franklin J. Miller, M.D., Michael E. Stillabower, M.D., F. Ann Millner, Ed. D., Bernard J. Birkett, Ronald A. Frost, Joseph C. Wright, Justin J. Lampropoulos, and Brian G. Lloyd*†
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[Form 10-Q for quarter ended June 30, 2016, Exhibit No. 10.2]
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10.20
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Form of Employment Agreement, dated May 26, 2016 between the Company and each of the following individuals: Bernard J. Birkett, Ronald A. Frost, Joseph C. Wright, Justin J. Lampropoulos, and Brian G. Lloyd*†
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[Form 10-Q for quarter ended June 30, 2016, Exhibit No. 10.3]
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10.21
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Employment Agreement, dated May 26, 2016 between the Company and Fred P. Lampropoulos*†
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[Form 10-Q for quarter ended June 30, 2016, Exhibit No. 10.4]
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10.22
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Third Amendment to the Merit Medical Systems, Inc. 2006 Long-Term Incentive Plan dated February 13, 2015†
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Filed herewith
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10.23
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Merit Medical Systems, Inc., Restatement of the 1996 Employee Stock Purchase Plan dated July 1, 2000†
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Filed herewith
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10.24
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First Amendment to the Merit Medical Systems, Inc., 1996 Employee Stock Purchase Plan dated April 1, 2001†
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Filed herewith
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10.25
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Second Amendment to the Merit Medical Systems, Inc., 1996 Employee Stock Purchase Plan dated January 1, 2006†
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Filed herewith
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10.26
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Third Amendment to the Merit Medical Systems, Inc., 1996 Employee Stock Purchase Plan dated April 7, 2006†
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Filed herewith
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10.27
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Fourth Amendment to the Merit Medical Systems, Inc., 1996 Employee Stock Purchase Plan dated February 13, 2015†
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Filed herewith
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10.28
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Indemnification Agreement, dated July 23, 2016, between the Company and David M. Liu†
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Filed herewith
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10.29
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First Amendment to Second Amended and Restated Credit Agreement, dated September 28, 2016
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Filed herewith
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21
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Subsidiaries of Merit Medical Systems, Inc.
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Filed herewith
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23.1
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Consent of Independent Registered Public Accounting Firm
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Filed herewith
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31.1
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Certification of Chief Executive Officer
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Filed herewith
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31.2
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Certification of Chief Financial Officer
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Filed herewith
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32.1
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Certification of Chief Executive Officer
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Filed herewith
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32.2
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Certification of Chief Financial Officer
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Filed herewith
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101
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The following materials from the Merit Medical Systems, Inc. Annual Report on Form 10-K for the fiscal year ended December 31, 2016, formatted in Extensible Business Reporting Language (XBRL): (i) the Consolidated Statements of Operations, (ii) Consolidated Balance Sheets, (iii) Consolidated Statements of Comprehensive Income (iv) Consolidated Statements of Stockholders' Equity, (v) Consolidated Statements of Cash Flows, and (vi) related notes.
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Filed herewith
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Item 16.
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Form 10-K Summary.
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MERIT MEDICAL SYSTEMS, INC.
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By:
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/s/ FRED P. LAMPROPOULOS
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Fred P. Lampropoulos, President and
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Chief Executive Officer
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Signature
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Capacity in Which Signed
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/s/: FRED P. LAMPROPOULOS
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President, Chief Executive Officer and Director
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Fred P. Lampropoulos
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(Principal executive officer)
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/s/: BERNARD J. BIRKETT
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Chief Financial Officer, Secretary and Treasurer
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Bernard J. Birkett
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(Principal financial and accounting officer)
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/s/: A. SCOTT ANDERSON
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Director
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A. Scott Anderson
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/s/: RICHARD W. EDELMAN
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Director
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Richard W. Edelman
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/s/: NOLAN E. KARRAS
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Director
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Nolan E. Karras
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/s/: DAVID M. LIU
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Director
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David M. Liu
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/s/: FRANKLIN J. MILLER
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Director
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Franklin J. Miller
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/s/: F. ANN MILLNER
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Director
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F. Ann Millner
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/s/: KENT W. STANGER
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Director
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Kent W. Stanger
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/s/: MICHAEL E. STILLABOWER
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Director
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Michael E. Stillabower
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A.
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PREFERRED STOCK
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B.
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COMMON STOCK
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1.
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Section 2 of the Plan is amended to include the following definition:
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MERIT MEDICAL SYSTEMS, INC.
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RESTATEMENT OF THE
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1996
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EMPLOYEE STOCK PURCHASE PLAN
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1.
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Exceptions
. Any other provision herein to the contrary notwithstanding, the Company shall not be obligated pursuant to the terms of this Agreement:
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To Indemnitee:
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At Indemnitee’s residence address and facsimile number on the records of the Company from time to time.
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EXHIBIT 21
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SUBSIDIARIES OF MERIT MEDICAL SYSTEMS, INC.
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as of December 31, 2016
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Subsidiary Name
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Jurisdiction of Incorporation/Organization
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BioSphere Medical Japan, Inc.
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Delaware
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BioSphere Medical SA
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France
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BioSphere Medical, Inc.
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Delaware
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BSMD Ventures, Inc.
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Delaware
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DFINE, Inc.
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Delaware
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Dfine Europe GmbH
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Germany
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LLC Merit Technologies
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Russia
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Merit Holdings, Inc.
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Utah
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Merit Maquiladora México, S. DE R.L. DE C.V.
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Mexico
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Merit Mexico Sales, S. de R.L. de C.V.
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Mexico
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Merit Medical (NRI) Ireland Limited
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Ireland
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Merit Medical Asia Company Limited
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Hong Kong
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Merit Medical Australia Pty Ltd.
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Australia
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Merit Medical Austria GmbH
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Austria
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Merit Medical Beijing Co. Ltd.
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China
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Merit Medical Belgium B.V.B.A.
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Belgium
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Merit Medical Canada Ltd.
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Canada
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Merit Medical Coatings B.V.
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Netherlands
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Merit Medical Comercialização, Distribuição, Importação e Exportação de Produtos Hospitalares LTDA.
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Brazil
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Merit Medical Denmark A/S
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Denmark
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Merit Medical Finland Ltd.
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Finland
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Merit Medical France SAS
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France
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Merit Medical GmbH
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Germany
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Merit Medical Ireland, Ltd.
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Ireland
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Merit Medical Italy S.R.L.
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Italy
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Merit Medical Japan KK
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Japan
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Merit Medical Korea Co., Ltd.
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South Korea
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Merit Medical Malaysia Sdn. Bhd
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Malaysia
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Merit Medical ME FZ-LLC
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United Arab Emirates
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Merit Medical Nederland B.V.
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Netherlands
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Merit Medical Norway AS
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Norway
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Merit Medical Portugal, S.A.
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Portugal
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Merit Medical Spain S.L.Unipersonal
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Spain
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Merit Medical Switzerland AG
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Switzerland
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Merit Medical System’s NRI Limited
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Ireland
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Merit Medical Systems AB
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Sweden
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Merit Medical Systems India Private Limited
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India
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Merit Medical Turkey Týbbi Ürünler Ticaret Anonim Þirketi
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Turkey
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Merit Medical UK Limited
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United Kingdom
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Merit Sensor Systems, Inc.
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Utah
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Thomas Medical Products, Inc.
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Pennsylvania
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/s/ DELOITTE & TOUCHE LLP
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Salt Lake City, Utah
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March 1, 2017
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Date: March 1, 2017
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/s/ Fred P. Lampropoulos
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Fred P. Lampropoulos
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President and Chief Executive Officer
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(principal executive officer)
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Date: March 1, 2017
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/s/ Bernard J. Birkett
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Bernard J. Birkett
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Chief Financial Officer
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(principal financial officer)
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Date: March 1, 2017
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/s/ Fred P. Lampropoulos
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Fred P. Lampropoulos
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President and Chief Executive Officer
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(principal executive officer)
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Date: March 1, 2017
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/s/ Bernard J. Birkett
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Bernard J. Birkett
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Chief Financial Officer
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(principal financial officer)
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