SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
|x| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1999.
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE TRANSITION PERIOD FROM _____ TO _____.
Commission File Number 0-18592
MERIT MEDICAL SYSTEMS, INC.
- --------------------------------------------------------------------------------
(Exact name of Registrant as specified in its charter)
Utah 87-0447695
- --------------------------------- ---------------------------
(State or other jurisdiction (I.R.S. Identification No.)
of incorporation or organization)
1600 West Merit Park Way, South Jordan UT, 84095
- --------------------------------------------------------------------------------
(Address of Principal Executive Offices)
(801) 253-1600
- --------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes x No
----- -----
Indicate the number of shares outstanding of each of the Registrant's
classes of common stock, as of the latest practicable date.
Common Stock 7,548,642
- -------------- -------------------------------
TITLE OR CLASS Number of Shares Outstanding at
August 12, 1999
<PAGE>
MERIT MEDICAL SYSTEMS, INC.
---------------------------
INDEX TO FORM 10-Q
------------------
PART I. FINANCIAL INFORMATION PAGE
----
Item 1. Financial Statements
Consolidated Balance Sheets as of June 30, 1999
and December 31, 1998...............................................1
Consolidated Statements of Operations for the three and six months
ended June 30, 1999 and 1998........................................3
Consolidated Statements of Cash Flows for the six months
ended June 30, 1999 and 1998........................................4
Notes to Consolidated Financial Statements..........................6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations...........................................7
Item 3. Quantitative and Qualitative Disclosure About Market Risk...........9
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders................10
Item 5. Other Information .................................................10
Item 6. Exhibits and Reports on Form 8-K...................................10
SIGNATURES...................................................................11
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1: Financial Statements
<TABLE>
MERIT MEDICAL SYSTEMS, INC.
---------------------------
CONSOLIDATED BALANCE SHEETS
JUNE 30, 1999 AND DECEMBER 31, 1998
- ---------------------------------------------------------------------------------------------
<CAPTION>
June 30, December 31,
ASSETS 1999 1998
- ------ ------------ ------------
(Unaudited)
<S> <C> <C>
CURRENT ASSETS:
Cash $ 818,654 $ 851,910
Trade receivables - net 11,088,902 10,436,485
Employee and related
party receivables 467,028 472,994
Other receivables 230,599
Irish Development Agency grant receivable 204,117 198,445
Inventories 19,374,643 17,785,743
Prepaid expenses and other assets 879,799 636,124
Deferred income tax assets 739,595 739,595
------------ ------------
Total current assets 33,803,337 31,121,296
------------ ------------
PROPERTY AND EQUIPMENT:
Land 1,065,985 1,065,985
Manufacturing equipment 14,135,924 13,669,599
Automobiles 134,846 89,469
Furniture and fixtures 8,078,423 7,963,835
Leasehold improvements 4,926,111 5,035,288
Construction-in-progress 2,520,625 1,182,669
------------ ------------
Total 30,861,914 29,006,845
Less accumulated depreciation
and amortization (13,234,900) (12,043,130)
------------ ------------
Property and equipment - net 17,627,014 16,963,715
------------ ------------
OTHER ASSETS:
Intangible assets - net 2,345,496 2,333,456
Deposits 67,422 74,218
Cost in excess of the fair value of assets of acquired-net 143,077 150,673
Prepaid royalty 21,428
------------ ------------
Total other assets 2,555,995 2,579,775
------------ ------------
TOTAL $ 53,986,346 $ 50,664,786
============ ============
</TABLE>
Continued on Page 2
See Notes to Consolidated Financial Statements
1
<PAGE>
<TABLE>
MERIT MEDICAL SYSTEMS, INC.
---------------------------
CONSOLIDATED BALANCE SHEETS (Continued)
JUNE 30, 1999 AND DECEMBER 31, 1998
- -----------------------------------------------------------------------------------------
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------ June 30, December 31,
1999 1998
------------ ------------
(Unaudited)
<S> <C> <C>
CURRENT LIABILITIES:
Line of credit $ 8,832,233 $ 7,634,607
Current portion of long-term debt 1,663,916 1,808,970
Trade payables 3,742,592 3,573,333
Accrued expenses 3,605,915 2,055,849
Advances from employees 111,238 74,090
Income taxes payable 459,492 194,722
------------ ------------
Total current liabilities 18,415,386 15,341,571
DEFERRED INCOME TAX LIABILITIES 1,374,868 1,275,651
LONG-TERM DEBT 2,680,212 3,388,835
DEFERRED CREDITS 986,700 1,023,861
------------ ------------
Total Liabilities 23,457,166 21,029,218
------------ ------------
MINORITY INTEREST IN SUBSIDIARY 616,998 548,500
------------ ------------
STOCKHOLDERS' EQUITY:
Preferred stock- 5,000,000 shares authorized as of
June 30, 1999 and December 31, 1998, no shares
issued
Common stock- no par value; 20,000,000
shares authorized; 7,532,274 and 7,508,914
shares issued at June 30, 1999 and December 31, 1998,
respectively 17,918,736 17,793,094
Retained earnings 12,882,735 11,564,928
Accumulated other comprehensive loss (889,289) (271,654)
------------ ------------
Total stockholders' equity 29,912,182 29,086,368
------------ ------------
TOTAL $ 53,986,346 $ 50,664,786
------------ ============
</TABLE>
See Notes to Consolidated Financial Statements
2
<PAGE>
<TABLE>
MERIT MEDICAL SYSTEM, INC.
--------------------------
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 1999 and 1998 (Unaudited)
- ----------------------------------------------------------------------------------------------------------
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
------------------------------ ------------------------------
1999 1998 1999 1998
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
SALES $ 18,979,739 $ 17,974,170 $ 36,681,462 $ 34,440,185
COST OF SALES 11,629,974 11,161,429 22,639,595 21,464,283
------------ ------------ ------------ ------------
GROSS PROFIT 7,349,765 6,812,741 14,041,867 12,975,902
------------ ------------ ------------ ------------
OPERATING EXPENSES:
Selling, general and administrative 4,980,256 4,571,952 9,799,919 8,738,917
Research and development 892,193 858,561 1,693,896 1,746,754
------------ ------------ ------------ ------------
TOTAL 5,872,449 5,430,513 11,493,815 10,485,671
------------ ------------ ------------ ------------
INCOME FROM OPERATIONS 1,477,316 1,382,228 2,548,052 2,490,231
OTHER EXPENSE 228,954 198,316 459,500 394,976
------------ ------------ ------------ ------------
INCOME BEFORE INCOME TAX EXPENSE 1,248,362 1,183,912 2,088,552 2,095,255
INCOME TAX EXPENSE 446,516 548,306 702,247 1,007,421
MINORITY INTEREST IN (INCOME)
LOSS OF SUBSIDIARY (49,162) (49,048) (68,498) (73,621)
------------ ------------ ------------ ------------
NET INCOME $ 752,684 $ 586,558 $ 1,317,807 $ 1,014,213
============ ============ ============ ============
EARNINGS PER COMMON SHARE -
Basic and diluted $ 0.10 $ 0.08 $ 0.18 $ 0.14
============ ============ ============ ============
AVERAGE COMMON SHARES -
Basic and diluted $ 7,531,131 $ 7,551,761 $ 7,522,229 $ 7,489,150
============ ============ ============ ============
</TABLE>
See Notes to Consolidated Financial Statements
3
<PAGE>
<TABLE>
MERIT MEDICAL SYSTEMS, INC.
---------------------------
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 1999 AND 1998 (Unaudited)
- -------------------------------------------------------------------------------------
<CAPTION>
June 30, June 30,
1999 1998
----------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 1,317,807 $ 1,014,213
Adjustments to reconcile net income to net
cash provided by (used in) in operating activities:
Depreciation and amortization 1,606,643 1,376,866
Bad debt expense 11,975 164,740
Losses on sales and abandonment of
property and equipment 1,267 18,128
Amortization of deferred credits (76,643) (45,602)
Deferred income taxes 99,217 143,378
Minority interest in income of subsidiary 68,498 73,621
Changes in operating assets and liabilities:
Trade receivables (664,392) (275,908)
Employee and related party receivables 5,966 (158,216)
Other receivables (230,599) 0
Irish Development Agency grant receivable 33,810 397,791
Inventories (1,588,900) (958,957)
Prepaid expenses and other assets (243,675) (189,993)
Deposits 6,796 (14,530)
Trade payables 169,259 (446,175)
Accrued expenses 1,550,066 513,963
Advances from employees 37,148 3,451
Income taxes payable 264,770 (135,919)
----------- -----------
Total adjustments 1,051,206 466,638
----------- -----------
Net cash provided by operating activities 2,369,013 1,480,851
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures for:
Property and equipment (2,188,879) (1,808,735)
Intangible assets (150,576) (268,709)
Proceeds from sale of property and equipment 521,805
----------- -----------
Net cash used in investing activities (2,339,455) (1,555,639)
----------- -----------
</TABLE>
Continued on page 5
See Notes to Consolidated Financial Statement
4
<PAGE>
<TABLE>
MERIT MEDICAL SYSTEMS, INC.
---------------------------
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
FOR THE SIX MONTHS ENDED JUNE 30, 1999 AND 1998 (Unaudited)
- --------------------------------------------------------------------------------
<CAPTION>
June 30, June 30,
1999 1998
----------- -----------
<S> <C> <C>
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under line of credit 1,197,626 611,610
Proceeds from issuance of common stock 125,642 231,664
Principal payments on:
Long-term debt (768,447) (883,887)
Deferred credits (34,734)
----------- -----------
Net cash provided by (used in) financing activities 554,821 (75,347)
----------- -----------
NET INCREASE ( DECREASE) IN CASH 584,379 (150,135)
EFFECT OF EXCHANGE RATES ON CASH (617,635) (88,829)
CASH AT BEGINNING OF PERIOD 851,910 976,692
----------- -----------
CASH AT END OF PERIOD $ 818,654 $ 737,728
=========== ===========
SUPPLEMENTAL DISCLOSURES OF CASH
FLOW INFORMATION:
Cash paid during the period for interest (including
capitalized interest of $63,758 and $68,727 respectively) $ 453,765 $ 381,248
=========== ===========
Income taxes $ 338,260 $ 999,962
=========== ===========
</TABLE>
SUPPLEMENTAL DISCLOSURE OF NONCASH
INVESTING AND FINANCING ACTIVITIES:
During the six months ended June 30, 1999 and 1998, the Company issued notes
payable totaling $85,230 and $355,404, respectively, for manufacturing equipment
and furniture and fixtures.
See Notes to Consolidated Financial Statements
5
<PAGE>
MERIT MEDICAL SYSTEMS, INC.
---------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1. Basis of Presentation. In the opinion of management, the accompanying
consolidated financial statements contain all adjustments, consisting only of
normal recurring accruals, necessary for a fair presentation of financial
position of the Company as of June 30, 1999 and December 31, 1998, and the
results of its operations and cash flows for the three and six months ended June
30, 1999 and 1998. The results of operations for the three and six months ended
June 30, 1999 and 1998 are not necessarily indicative of the results for a
full-year period.
2. Inventories. Inventories at June 30, 1999 and December 31, 1998 consisted
of the following:
June 30, December 31,
1999 1998
----------- ------------
Raw materials $ 9,534,714 $ 7,458,133
Work-in-process 2,835,249 1,954,696
Finished goods 7,921,691 8,981,007
Less reserve for obsolete inventory (917,011) (608,093)
----------- ------------
Total $19,374,643 $17,785,743
=========== ============
3. Income Taxes. The Company has not fully allocated income tax expense between
current and deferred for the quarters ended June 30, 1999 and 1998. The
effective tax rate for the three and six months ended June 30, 1998 is higher
than the federal statutory tax rate largely due to losses incurred by the
Company's Irish subsidiary for which a tax benefit was recorded at a rate of 10%
vs. a 35% federal statutory tax rate. The effective tax rate improved during the
three and six months ended June 30, 1999, as the Company's operations in Ireland
became profitable and their lower tax rate improved the Company's overall
effective tax rate.
4. Reporting Comprehensive Income - In June 1997, the Financial Accounting
Standards Board (FASB) issued SFAS No.130, "Reporting Comprehensive Income."
SFAS No. 130 establishes standards for reporting and display of comprehensive
income and its components (revenues, expenses, gains and losses) in a full set
of general-purpose financial statements. This statement requires that an
enterprise (a) classify items of other comprehensive income by their nature in a
financial statement and (b) display the accumulated balance of other
comprehensive income separately from retained earnings and additional
paid-in-capital in the equity section of a statement of financial position.
Effective January 1, 1998, the Company adopted the provisions of SFAS No. 130.
Accordingly, the Company determined that the only transaction considered to be
an additional component of comprehensive income is the cumulative effect of
foreign currency translation adjustments. As of June 30, 1999 and December 31,
1998, the cumulative effect of such transactions reduced stockholders' equity by
$889,289 and $271,654, respectively. Comprehensive income for the three and six
months ended June 30, 1999 and 1998 is computed as follows:
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30, June 30,
---------------------------- ----------------------------
1999 1998 1999 1998
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net income $ 752,684 $ 586,558 $ 1,317,807 $ 1,014,213
Foreign currency translation (211,454) 99,517 (617,635) (88,829)
----------- ----------- ----------- -----------
Comprehensive income $ 541,230 $ 686,075 $ 700,172 $ 924,384
=========== =========== =========== ===========
</TABLE>
6
<PAGE>
MERIT MEDICAL SYSTEMS, INC.
---------------------------
ITEM 2:
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
- --------------------------------------------------------------------------------
Operations. The Company achieved significant increases in sales and income for
the three and six months ended June 30, 1999 compared to the same periods in
1998. The following table sets forth certain operational data as a percentage of
sales for the three and six months ended June 30, 1999 and 1998:
Three Months Ended Six Months Ended
June 30, June 30,
---------------- -----------------
1999 1998 1999 1998
------ ------ ------ ------
Sales 100.0% 100.0% 100.0% 100.0%
Gross Profit 38.7 37.9 38.3 37.7
Selling, general and administrative 26.2 25.4 26.7 25.4
Research and development 4.7 4.8 4.6 5.1
Income from Operations 7.8 7.7 6.9 7.2
Other Expense 1.2 1.1 1.3 1.1
Net Income 4.0 3.3 3.6 2.9
Sales. Sales for the three months of 1999 ended June 30, 1999 were $18,979,739,
compared to $17,974,170 for the same period last year, which represents an
increase of 6 percent. Sales growth for the three-month period was sustained
mainly by sales of the Company's stand-alone products which grew by 9 percent
and inflation devices which grew at 6 percent. For the six-month period ended
June 30, 1999 total sales were $36,681,462 compared with $34,440,185 for the
same period in 1998, an increase of 7 percent. Growth in sales for the six-month
period were attributable to a growth in stand-alone products which grew by 11
percent, and inflation devices which grew at 6 percent. International sales for
the six-month period ended June 30, 1999 grew by 11 percent, compared with the
same period in 1998, and accounted for 22 percent of the Company's total revenue
mix.
Gross Margin. Gross margin as a percentage of sales for the three months ended
June 30, 1999 was 38.7% compared to 37.9% for the same period in 1998. For the
six months ended June 30, 1999 gross margin was 38.3% as compared to 37.7% for
the same period in 1998. The increase in gross margin for the three and six
months ended June 30, 1999 was primarily the result of a mix more heavily
weighted to higher-margin products such as inflation devices and stand-alone
products.
Operating Expenses. Operating expenses were 30.9% of sales for the three months
ended June 30, 1999, compared to 30.2% for the three months ended June 30, 1998.
For the first six months of 1999 operating expenses increased to 31.3% as
compared to 30.4% for the same period in 1998. Selling, general and
administrative expenses as a percentage of sales increased to 26.2% and 26.7%
for the three and six months ended June 30, 1999 and 1998, respectively compared
to 25.4% for both periods in 1998 . The increase in operating expenses for the
three and six months ended June 30, 1999, were due mainly to personnel additions
to address the fourth quarter 1998 implementation of the Company's Oracle
integrated business information system and Y2K compliance issues, as well as
strengthening its OEM sales and new business development departments. Research
and development costs declined to 4.7% of sales for the three months ended June
30, 1999, compared to 4.8% for the same period in 1998. For the six months ended
June 30, 1999, research and development expenditures decreased to 4.6% of sales,
down from 5.1% of sales for the six months ended June 30, 1998.
7
<PAGE>
MERIT MEDICAL SYSTEMS, INC.
---------------------------
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (Continued)
- --------------------------------------------------------------------------------
Operating Income. During the three months ended June 30, 1999, the Company
reported income from operations of $1.5 million compared to $1.4 million for the
comparable period in 1998. Operating income for the first six months of 1999 and
1998 were $2.5 million. Although operating income for the three and six months
ended June 30, 1999 was up slightly over the prior periods, net income for the
three months ended June 30, 1999 rose to $752,684, up from $586,558, for the
same three-month period of 1998, an increase of 28%, and net income for the six
months ended rose to $1.3 million up from $1.0 million, an increase of 30%. The
increase in net income for both periods was positively affected by lower tax
rates due to the Company's Irish operation becoming profitable.
Liquidity and Capital Resources. At June 30, 1999, the Company's working capital
was $15.4 million which represented a current ratio of 1.8 to 1. During 1998,
the Company increased an available secured bank line of credit to $10.5 million.
The line of credit bears interest at the bank's prime rate and contains various
conditions and restrictions. At June 30, 1999, the outstanding balance under the
line of credit was $8.8 million. Historically, the Company has incurred
significant expenses in connection with product development and introduction of
new products. Substantial capital has also been required to finance growth in
inventories and receivables. The Company's principal source of funding for these
and other expenses has been the sale of equity and cash generated from
operations, secured loans on equipment and bank lines of credit. The Company
believes that its present sources of liquidity and capital are adequate for its
current operations. In April 1998, the Company sold its land, building, and
improvements in Castlerea, Ireland to a third party. In connection with the sale
the Company received approximately $520,000 in cash for the building
improvements and the buyer's assumption of its note payable with the Irish
Development Agency for the land and building. This transaction resulted in an
immaterial loss to the Company.
Year 2000. In 1996 the Company began the conversion of the principal computer
software systems to a new integrated system to support future growth and improve
productivity. The Company has completed a review of its business information
systems with regard to Year 2000 compliance and is either replacing or
correcting those computer systems that have been found to have date-related
deficiencies. A new Oracle integrated business information system for the order
administration, financial and manufacturing processes was implemented and
completed in November 1998. Through June 30, 1999 the Company had incurred
approximately $3.8 million in costs to improve the Company's information
technology systems and for Year 2000 readiness efforts. Of this amount, a
substantial portion represents the costs of implementing and transitioning to
new computer hardware and software for the Company's Oracle enterprise-wide
business systems. Substantially all of these costs have been capitalized. The
Company anticipates incurring an additional $500,000 in connection with the Year
2000 readiness efforts. The Company expects to have all Year 2000 readiness
efforts completed by September 30, 1999. The Company believes its non-IT systems
and products being shipped today have been assessed and found to be Year 2000
compliant. The Company relies on third-party providers for materials and
services such as telecommunications, utilities, financial services and other key
services. Interruption of those materials or services due to Year 2000 issues
could affect the Company's operations. The Company has completed the process of
contacting its major suppliers and has determined that all major suppliers are
in the process of ensuring Year 2000 compliance. However, since the Company is
dependent on key third parties, there can be no guarantee that the Company's
efforts will prevent a material adverse impact on its financial position,
results of operations or liquidity in future periods in the event that a
significant number of suppliers and /or customers experience business
disruptions as a result of their lack of Year 2000 readiness. The Company is in
the process of implementing the Oracle system in its Irish facility with a
planned completion date for November of 1999. Both the Company's cost estimates
and completion time frames could be influenced by the Company's ability to
successfully identify all Year 2000 issues, the nature and amount of corrective
action required, the availability and cost of trained personnel in this area and
the Year 2000 success that key third parties and customers attain. While these
8
<PAGE>
MERIT MEDICAL SYSTEMS, INC.
---------------------------
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (Continued)
- --------------------------------------------------------------------------------
and other unforeseen factors could have a material adverse impact on the
Company's financial position, results of operations or liquidity in future
periods, management believes that it has implemented an effective Year 2000
compliance program that will minimize the possible negative consequences to the
Company. The foregoing discussion of the Company's Year 2000 readiness includes
forward-looking statements, including estimates of the time frames and costs for
addressing the known Year 2000 issues confronting the Company, and is based upon
management's current estimates, which were derived using numerous assumptions.
There can be no assurance that these estimates will be achieved, and actual
events and results could differ materially from those anticipated. Specific
factors that might cause such material differences include, but are not limited
to, the availability of personnel with required remediation skills, the ability
of the Company to identify and correct or replace all relevant computer code and
the success of the third parties with whom the Company does business in
addressing their Year 2000 issues.
Forward-looking Statements. Statements contained in this document which are not
purely historical are forward- looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. These encompass Merit's
beliefs, expectations, hopes or intentions regarding the future. All
forward-looking statements included in this release are made as of the date
hereof and are based on information available to Merit as of such date. Merit
assumes no obligation to update any forward-looking statement. It is important
to note that actual outcomes and Merit's actual results could differ materially
from those in such forward-looking statements. Factors that could cause actual
results to differ materially include risks and uncertainties related to future
market growth such as product acceptance, product recalls, competition and the
overall regulatory environment.
Item 3: Quantitative and Qualitative Disclosure About Market Risk.
Market Risk Disclosures. The Company does not engage in significant derivative
financial instruments. The Company does experience risk associated with foreign
currency fluctuations, and interest rate risk associated with its variable rate
debt; however, such risks have not been material to the Company and,
accordingly, the Company has not deemed it necessary to enter into agreements to
hedge such risks. The Company may enter into such agreements in the event that
such risks become material in the future.
9
<PAGE>
MERIT MEDICAL SYSTEMS, INC.
---------------------------
PART II - OTHER INFORMATION
Item: 4 Submission of Matters to a Vote of Security Holders
The Company held its Annual Meeting of Shareholders (the "Annual
Meeting") on May 26, 1999 in South Jordan, Utah. The following items of business
were considered at the Annual Meeting:
A: Election of Directors
---------------------
Two persons were elected as members of the Board of Directors to
serve three-year term. They are as follows:
Shares
Voted For
---------
Rex C. Bean 5,855,565
Richard W. Edelman 5,859,665
B. Approval of the Company's 1999 Omnibus Incentive Stock Plan.
------------------------------------------------------------
A proposal to approve the Company's 1999 Omnibus Incentive Stock
Plan to be substituted in part for the Company's long-term Incentive Stock
Option Plan was approved by the shareholders of the Company. The number of
shares voted for the amendment was 3,641,950. The number of shares voted against
the amendment was 496,905.
The number of shares abstaining from voting on was 16,623.
C. Selection of Auditors.
----------------------
A proposal to ratify the appointment of Deloitte & Touche LLP as
the independent auditor of the Company for 1999 was presented at the Annual
Meeting and such proposal was approved by the shareholders of the Company. The
number of shares voted for the proposal was 6,350,456. The number of shares
voted against such proposal was 19,400. The number of shares abstaining from
voting was 6,805.
Item 5. Other Information.
If a shareholder desiring to raise a proposal at the next annual
meeting of shareholders does not seek inclusion of the proposal in the Company's
proxy statement and fails to notify the Company at least 45 days prior to the
month and day of mailing of the prior year's proxy statement, management proxies
will be allowed to use their discretionary voting authority when the proposal is
raised at the annual meeting, without any discussion of the proposal in the
proxy statement.
10
<PAGE>
MERIT MEDICAL SYSTEMS, INC.
---------------------------
PART II - OTHER INFORMATION
ITEM 6: Exhibits and Reports on Form 8-K
(a) Reports on Form 8-K - none
(b) Exhibits
- --------------------------------------------------------------------------------
S - K No. Description Exhibit No.
- --------------------------------------------------------------------------------
27 Financial Data Schedule 2
- --------------------------------------------------------------------------------
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
MERIT MEDICAL SYSTEMS, INC.
- ---------------------------
REGISTRANT
Date: AUGUST 12, 1999 /s/ FRED P. LAMPROPOULOS
--------------------- ------------------------------------------
FRED P. LAMPROPOULOS
PRESIDENT AND CHIEF EXECUTIVE OFFICER
Date: AUGUST 12, 1999 /S/ KENT W. STANGER
--------------------- ------------------------------------------
KENT W. STANGER
VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
11
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM MERT MEDICAL
SYSTEMS, INC.'S CONSOLIDATED BALANCE SHEET AND INCOME STATEMENT FOR THE SIX
MONTH PERIOD ENDING JUNE 30, 1999 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000856982
<NAME> MERIT MEDICAL SYSTEMS, INC.
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> JUN-30-1999
<CASH> 818654
<SECURITIES> 0
<RECEIVABLES> 11273786
<ALLOWANCES> (184884)
<INVENTORY> 19374643
<CURRENT-ASSETS> 33803337
<PP&E> 30861914
<DEPRECIATION> (13234900)
<TOTAL-ASSETS> 53986346
<CURRENT-LIABILITIES> 18415386
<BONDS> 2680212
0
0
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