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Thursday, October 31, 2019

Merit Medical down 33% premarket on Q3 miss, guidance cut

Merit Medical Systems (NASDAQ:MMSI) slumps 33% premarket on modest volume on the heels of lower-than-expected Q3 results released after the close yesterday. Highlights:
Revenue: $243.0M (+9.6%); stand-alone devices: $96.3M (+5.8%).
Gross margin decline due to product mix, higher costs, unfavorable fx, trade concerns and Brexit.
Net income: ($3.4M) (-120.5%); non-GAAP net income: $15.7M (-39.6%); EPS: ($0.06) (-120.0%); non-GAAP EPS: $0.28 (-40.4%).
Headcount reduced 2%, mostly from SG&A area. San Jose R&D site closed. Exploring consolidation of additional satellite sites into Mexico and Texas facilities.
Goal: Increase free cash flow and reduce capex by at least $20M.
10-15 new products to be launched over the next six months.
2019 guidance: Revenue: $986M – 995M from $1,007M – 1,029M; EPS: $0.27 – 0.33 from $0.62 – 0.84; non-GAAP EPS: $1.40 – 1.46 from $1.74 – 1.97.
2020 guidance withdrawn, new guidance will be released with Q4 results.

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