# Merit Medical Systems Inc: Form 10-Q for the period ended Jun 30, 2025

- Company: [Merit Medical Systems Inc](/companies/mmsi.md) (CIK 856982)
- Form: 10-Q
- Filed: 2025-07-30
- Accepted by EDGAR: Jul 30, 2025, 16:19 ET
- Period: 2025-06-30
- Accession: 0000856982-25-000046
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/856982/000085698225000046/mmsi-20250630x10q.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/856982/000085698225000046/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2025-06-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2025-04-01 to 2025-06-30 | $382.5m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Revenue | 6 months, 2025-01-01 to 2025-06-30 | $737.8m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Cost of revenue | 3 months, 2025-04-01 to 2025-06-30 | $198.0m | us-gaap:CostOfGoodsAndServicesSold |
| Cost of revenue | 6 months, 2025-01-01 to 2025-06-30 | $381.3m | us-gaap:CostOfGoodsAndServicesSold |
| Gross profit | 3 months, 2025-04-01 to 2025-06-30 | $184.5m | us-gaap:GrossProfit |
| Gross profit | 6 months, 2025-01-01 to 2025-06-30 | $356.5m | us-gaap:GrossProfit |
| Selling, general and administrative | 3 months, 2025-04-01 to 2025-06-30 | $113.1m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Selling, general and administrative | 6 months, 2025-01-01 to 2025-06-30 | $220.6m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Operating income | 3 months, 2025-04-01 to 2025-06-30 | $46.9m | us-gaap:OperatingIncomeLoss |
| Operating income | 6 months, 2025-01-01 to 2025-06-30 | $87.9m | us-gaap:OperatingIncomeLoss |
| Interest expense | 3 months, 2025-04-01 to 2025-06-30 | $6.8m | us-gaap:InterestExpenseNonoperating |
| Interest expense | 6 months, 2025-01-01 to 2025-06-30 | $13.3m | us-gaap:InterestExpenseNonoperating |
| Income tax | 3 months, 2025-04-01 to 2025-06-30 | $10.8m | us-gaap:IncomeTaxExpenseBenefit |
| Income tax | 6 months, 2025-01-01 to 2025-06-30 | $18.6m | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2025-04-01 to 2025-06-30 | $32.6m | us-gaap:NetIncomeLoss |
| Net income | 6 months, 2025-01-01 to 2025-06-30 | $62.7m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2025-04-01 to 2025-06-30 | $0.54 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 6 months, 2025-01-01 to 2025-06-30 | $1.03 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2025-04-01 to 2025-06-30 | $0.55 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 6 months, 2025-01-01 to 2025-06-30 | $1.06 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2025-04-01 to 2025-06-30 | 60,611,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 6 months, 2025-01-01 to 2025-06-30 | 60,945,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 6 months, 2025-01-01 to 2025-06-30 | $123.9m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 6 months, 2025-01-01 to 2025-06-30 | $34.8m | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Cash and equivalents | at 2025-06-30 | $341.8m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2025-06-30 | $923.1m | us-gaap:AssetsCurrent |
| Total assets | at 2025-06-30 | $2.59bn | us-gaap:Assets |
| Current liabilities | at 2025-06-30 | $225.6m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2025-06-30 | $1.10bn | us-gaap:Liabilities |
| Long-term debt | at 2025-06-30 | $731.8m | us-gaap:LongTermDebtNoncurrent |
| Shareholders' equity | at 2025-06-30 | $1.49bn | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 35,525 characters.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the consolidated financial statements and related condensed notes thereto, which are included in Part I of this report. Our future financial condition and results of operations, as well as any forward-looking statements, are subject to inherent risks and uncertainties that may adversely impact our operations and financial results. These risks and uncertainties are discussed in Part I, Item 1A “Risk Factors” in the 2024 Annual Report on Form 10-K and in Part II, Item 1A “Risk Factors” in this report.

### OVERVIEW

We are a leading manufacturer and marketer of proprietary medical devices used in interventional, diagnostic and therapeutic procedures, particularly in cardiology, radiology, oncology, critical care and endoscopy. Our cardiovascular segment consists of four product categories: peripheral intervention, cardiac intervention, custom procedural solutions, and OEM. Within these product categories, we sell a variety of products, including cardiology and radiology devices (which assist in diagnosing and treating coronary arterial disease, peripheral vascular disease and other non-vascular diseases), as well as embolotherapeutic, cardiac rhythm management, electrophysiology, critical care, breast cancer localization and guidance, biopsy, and interventional oncology and spine devices. Our endoscopy segment consists of gastroenterology and pulmonology devices which assist in the palliative treatment of expanding esophageal, tracheobronchial and biliary strictures.

For the three-month period ended June 30, 2025, we reported sales of $382.5 million, an increase of $44.5 million or 13.2% compared to sales for the three-month period ended June 30, 2024 of $338.0 million. For the six-month period ended June 30, 2025, we reported sales of $737.8 million, an increase of $76.3 million or 11.5%% compared to sales for the six-month period ended June 30, 2024 of $661.5 million. Foreign currency fluctuations (net of hedging) increased/(decreased) our net sales by $2.3 million and $(1.1) million for the three and six-month periods ended June 30, 2025, respectively, assuming applicable foreign exchange rates in effect during the comparable prior-year periods.

Gross profit as a percentage of sales increased to 48.2% for the three-month period ended June 30, 2025 compared to 47.7% for the three-month period ended June 30, 2024. Gross profit as a percentage of sales increased to 48.3% for the six-month period ended June 30, 2025 compared to 47.3% for the six-month period ended June 30, 2024.

Net income for the three-month period ended June 30, 2025 was $32.6 million, or $0.54 per share, compared to net income of $35.7 million, or $0.61 per share, for the three-month period ended June 30, 2024. Net income for the six-month period ended June 30, 2025 was $62.7 million, or $1.03 per share, compared to net income of $64.0 million, or $1.09 per share, for six-month period ended June 30, 2024.

### Recent Developments and Trends

In addition to the trends identified in the 2024 Annual Report on Form 10-K under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Overview,” our business in 2025 has been impacted, and we believe will continue to be impacted, by the following recent developments and trends:

- Our revenue results during the three-month period ended June 30, 2025 were driven primarily by demand in the U.S. and favorable international sales trends, particularly in our Rest of World (“ROW”) and Europe, the Middle East and Africa (“EMEA) regions.
- As of June 30, 2025, we had cash, cash equivalents, and restricted cash of $343.9 million and net available borrowing capacity under our Fourth A&R Credit Agreement of approximately $697 million.
- The United States recently announced changes to its trade policies, including increasing tariffs on imports, in some cases significantly, and potentially negotiating or terminating existing trade agreements. These actions have prompted retaliatory tariffs and other measures by a number of countries. While the long-term effects remain uncertain, we continue to closely monitor the evolving trade policy environment which presents a mix of impacts, including, among other impacts, the potential for increased production costs and higher pricing to our customers, any of which could negatively affect our business, results of operations and financial condition. See Part II, Item 1A. Risk Factors in this report.

### RESULTS OF OPERATIONS

The following table sets forth certain operational data as a percentage of sales for the periods indicated:

| ​ ​ ​ ​ ​ ​ | ​ ​ Three Months Ended June 30, 2025 | ​ ​ ​ ​ 2024 | ​ ​ ​ ​ Six Months Ended ​ June 30, 2025 | ​ ​ ​ ​ 2024 |
| --- | ---: | ---: | ---: | ---: |
| Net sales | 100% | 100% | 100% | 100% |
| Gross profit | 48.2 | 47.7 | 48.3 ​ | 47.3 |
| Selling, general and administrative expenses | 29.6 | 28.0 | 29.9 ​ | 28.6 |
| Research and development expenses | 6.4 | 6.0 | 6.3 ​ | 6.3 |
| Contingent consideration expense | 0.0 | 0.1 | 0.2 ​ | 0.0 |
| Income from operations | 12.3 | 13.6 | 11.9 ​ | 12.4 |
| Other expense — net | (0.9) | (0.0) | (0.9) ​ | (0.3) |
| Income before income taxes | 11.3 | 13.6 | 11.0 ​ | 12.1 |
| Net income | 8.5 | 10.6 | 8.5 ​ | 9.7 |

### Sales

Sales for the three-month period ended June 30, 2025 increased by 13.2%, or $44.5 million, compared to the corresponding period in 2024. Sales for six-month period ended June 30, 2025 increased by 11.5%, or $76.3 million, compared to the corresponding period in 2024. Listed below are the sales by product category within each of our reportable segments for the three and six-month periods ended June 30, 2025 and 2024 (in thousands, other than percentage changes):

| ​ ​ ​ ​ Cardiovascular | ​ ​ | ​ ​ ​ ​ ​ ​ % Change ​ ​ | ​ ​ ​ ​ ​ | ​ ​ Three Months Ended June 30, 2025 ​ ​ | ​ ​ | ​ ​ 2024\* ​ ​ | ​ ​ ​ ​ | ​ ​ ​ ​ ​ ​ % Change ​ ​ | ​ ​ ​ ​ ​ | ​ ​ Six Months Ended June 30, 2025 ​ ​ | ​ ​ | ​ ​ 2024\* ​ ​ |
| --- | --- | ---: | --- | ---: | --- | ---: | --- | ---: | --- | --- | --- | ---: |
| Peripheral Intervention |  | 6.3% | ​ | $142,847 | ​ | $134,386 | ​ | 5.9% | ​ | $280,126 | ​ | $264,452 |
| Cardiac Intervention |  | 23.5% | ​ | 115,251 | ​ | 93,307 |  | 17.2% | ​ | ​ 214,992 | ​ | 183,483 |
| Custom Procedural Solutions |  | 7.0% | ​ | 53,634 | ​ | 50,132 |  | 3.0% | ​ | ​ 101,576 | ​ | 98,655 |
| OEM |  | 4.6% | ​ | 52,293 | ​ | 49,990 |  | 12.1% | ​ | ​ 106,044 | ​ | 94,599 |
| Total |  | 11.0% | ​ | 364,025 | ​ | 327,815 |  | 9.6% | ​ | ​ 702,738 | ​ | 641,189 |
| ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ |
| Endoscopy | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ |
| Endoscopy Devices |  | 81.0% | ​ | 18,437 | ​ | 10,188 |  | 72.6% | ​ | ​ 35,075 | ​ | 20,322 |
| ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ |
| Total |  | 13.2% | ​ | $382,462 | ​ | $338,003 | ​ | 11.5% | ​ | $737,813 | ​ | $661,511 |

*\*Commencing January 1, 2025, we reorganized our sales teams and product categories to include revenues from the sale of our spine devices under our OEM product category. Revenue figures for 2024 have been recast to reflect this realignment of our portfolio of spine products, representing approximately $5.7 million and $11.0 million in revenue for the three and six-month periods ended June 30, 2024, within the OEM product category to provide comparability between the reported periods.*

*Cardiovascular Sales.* Our cardiovascular sales for the three-month period ended June 30, 2025 were $364.0 million, up 11.0% when compared to the corresponding period of 2024 of $327.8 million. Sales for the three-month period ended June 30, 2025 were favorably affected by increased sales of:

(a) Peripheral intervention products, which increased by $8.5 million, or 6.3%, from the corresponding period of 2024. This increase was driven primarily by increased sales of our radar localization, drainage, embolotherapy and delivery systems products.

(b) Cardiac intervention products, which increased by $21.9 million, or 23.5%, from the corresponding period of 2024. This increase was driven primarily by $10.2 million in sales associated with products acquired from Cook in November 2024 and increased sales of our intervention and angiography products.

(c) OEM products, which increased by $2.3 million, or 4.6%, from the corresponding period of 2024. This increase was driven primarily by increased sales of our cardiac rhythm management/electrophysiology (“CRM/EP”), kits and intervention products, offset partially by decreased sales of our access and coatings products.

(d) Custom procedural solutions products, which increased by $3.5 million, or 7.0%, from the corresponding period of 2024. This increase was driven primarily by increased sales of our critical care products.

Our cardiovascular sales for the six-month period ended June 30, 2025 were $702.7 million, up 9.6% when compared to the corresponding period of 2024 of $641.2 million. Sales for the six-month period ended June 30, 2025 were favorably affected by increased sales of:

(a) Peripheral intervention products, which increased by $15.7 million, or 5.9%, from the corresponding period of 2024. This increase was driven primarily by increased sales of our access, embolotherapy, radar localization, drainage and delivery systems products.

(b) Cardiac intervention products, which increased by $31.5 million, or 17.2%, from the corresponding period of 2024. This increase was driven primarily by $19.4 million in sales associated with products acquired from Cook in November 2024 and increased sales of our CRM/EP, intervention and fluid management products.

(c) OEM products, which increased by $11.4 million, or 12.1%, from the corresponding period of 2024. This increase was driven primarily by increased sales of our kits, intervention and angiography products, offset partially by decreased sales of our fluid management and coatings products.

(d) Custom procedural solutions products, which increased by $2.9 million, or 3.0%, from the corresponding period of 2024. This increase was driven primarily by increased sales of our critical care and trays products.

*Endoscopy Sales.* Our endoscopy sales for the three-month period ended June 30, 2025 were $18.4 million, up 81.0% when compared to sales in the corresponding period of 2024 of $10.2 million. Sales for the three-month period ended June 30, 2025 compared to the corresponding period in 2024 were favorably affected by $8.1 million in sales of the EsophyX® Z+ device acquired from EGS in July 2024.

Our endoscopy sales for the six-month period ended June 30, 2025 were $35.1 million, up 72.6% when compared to sales in the corresponding period of 2024 of $20.3 million. Sales for the six-month period ended June 30, 2025 compared to the corresponding period in 2024 were favorably affected by $14.7 million in sales of the EsophyX® Z+ device acquired from EGS in July 2024.

### Geographic Sales

Listed below are sales by geography for the three and six-month periods ended June 30, 2025 and 2024 (in thousands, other than percentage changes):

| ​ ​ ​ ​ | ​ | ​ ​ ​ ​ ​ ​ % Change | ​ ​ ​ ​ | ​ ​ Three Months Ended June 30, 2025 | ​ | ​ ​ 2024 | ​ ​ ​ | ​ ​ ​ ​ ​ ​ % Change | ​ ​ ​ ​ | ​ ​ Six Months Ended June 30, 2025 | ​ | ​ ​ 2024 |
| --- | --- | ---: | --- | ---: | --- | ---: | --- | ---: | --- | ---: | --- | ---: |
| United States | ​ | 16.7% | ​ | $227,082 | ​ | $194,664 | ​ | 15.7% | ​ | $440,646 | ​ | $380,758 |
| International | ​ | 8.4% | ​ | ​ 155,380 | ​ | ​ 143,339 | ​ | 5.8% | ​ | ​ 297,167 | ​ | ​ 280,753 |
| Total |  | 13.2% | ​ | $382,462 | ​ | $338,003 | ​ | 11.5% | ​ | $737,813 | ​ | $661,511 |

*United States Sales.* U.S. sales for the three-month period ended June 30, 2025 were $227.1 million, or 59.4% of net sales, up 16.7% when compared to the corresponding period of 2024. The increase in our domestic sales for the three-month period ended June 30, 2025, compared to the corresponding period of 2024 was driven primarily by our U.S. Direct, OEM and Endoscopy businesses.

U.S. sales for the six-month period ended June 30, 2025 were $440.6 million, or 59.7%% of net sales, up 15.7% when compared to the corresponding period of 2024. The increase in our domestic sales for the six-month period ended June 30, 2025, compared to the corresponding period of 2024 was driven primarily by our U.S. Direct, OEM and Endoscopy businesses.

*International Sales*. International sales for the three-month period ended June 30, 2025 were $155.4 million, or 40.6% of net sales, up 8.4% when compared to the corresponding period of 2024 of $143.3 million. The increase in our international sales for the three-month period ended June 30, 2025, compared to the corresponding period of 2024 included increased sales in our ROW operations of $2.0 million or 14.0% and our EMEA operations of $10.3 million or 16.5%, partially offset by decreased sales in our Asia Pacific (“APAC”) operations of $(0.2) million or (0.4)%.

International sales for the six-month period ended June 30, 2025 were $297.2 million, or 40.3% of net sales, up 5.8% when compared to the corresponding period of 2024 of $280.8 million. The increase in our international sales for the six-month period ended June 30, 2025, compared to the corresponding period of 2024 included increased sales in our ROW operations of $4.4 million or 15.8% and our EMEA operations of $12.6 million or 10.2%, partially offset by decreased sales in our APAC operations of $(0.5) million or (0.4)%.

### Gross Profit

Our gross profit as a percentage of sales increased to 48.2% for the three-month period ended June 30, 2025, compared to 47.7% for the three-month period ended June 30, 2024. The increase in gross profit percentage was primarily due to an increase in sales combined with favorable changes in product mix, partially offset by higher intangible amortization expense as a percentage of sales associated with acquisitions.

Our gross profit as a percentage of sales increased to 48.3% for the six-month period ended June 30, 2025, compared to 47.3% for the six-month period ended June 30, 2024. The increase in gross profit percentage was primarily due to an increase in sales combined with favorable changes in product mix, partially offset by higher intangible amortization expense as a percentage of sales associated with acquisitions.

### Operating Expenses

*Selling, General and Administrative Expense.* Selling, general and administrative ("SG&A") expenses increased $18.5 million, or 19.6%, for the three-month period ended June 30, 2025 compared to the corresponding period of 2024. As a percentage of sales, SG&A expenses were 29.6% for the three-month period ended June 30, 2025, compared to 28.0% for the corresponding period of 2024. SG&A expenses increased $31.6 million, or 16.7%, for the six-month period ended June 30, 2025 compared to the corresponding period of 2024. As a percentage of sales, SG&A expenses were 29.9%% for the six-month period ended June 30, 2025, compared to 28.6%% for the corresponding period of 2024. For the three and six-month periods ended June 30, 2025, SG&A expenses increased compared to the corresponding periods of 2024, primarily due to an increase in labor-related costs associated with headcount additions, including those in connection with the EGS, Cook and Biolife Acquisitions, and increased travel and entertainment and advertising and promotional expenses.

*Research and Development Expenses.* Research and development (”R&D”) expenses for the three-month period ended June 30, 2025 were $24.4 million, up 20.3%, when compared to R&D expenses in the corresponding period of 2024 of $20.3 million. R&D expenses for the six-month period ended June 30, 2025 were $46.8 million, up 12.2%, when compared to R&D expenses in the corresponding period of 2024 of $41.7 million. For the three and six-month periods ended June 30, 2025, R&D expenses increased compared to the corresponding periods of 2024 primarily due to increased R&D activity and regulatory costs associated with clinical trials.

*Contingent Consideration Expense.* For the three and six-month periods ended June 30, 2025, we recognized contingent consideration expense from changes in the estimated fair value of our contingent consideration obligations stemming from our previously disclosed business acquisitions of $0.1 million and $1.2 million, compared to contingent consideration expense of $0.3 million and $0.2 million for the three and six-month periods ended June 30, 2024. Expense in each period related to changes in the probability and timing of achieving certain revenue and operational milestones, as well as expense for the passage of time.

### Operating Income

The following table sets forth our operating income by financial reporting segment for the three and six-month periods ended June 30, 2025 and 2024 (in thousands):

| ​ ​ ​ ​ Operating Income | ​ ​ ​ ​ | ​ ​ Three Months Ended June 30, 2025 ​ ​ | ​ ​ | ​ ​ 2024 ​ ​ | ​ ​ ​ ​ | ​ ​ Six Months Ended June 30, 2025 ​ ​ | ​ ​ | ​ ​ 2024 ​ ​ |
| --- | --- | ---: | --- | ---: | --- | ---: | --- | ---: |
| Cardiovascular | ​ | $41,244 | ​ | $42,912 | ​ | $79,782 | ​ | $75,819 |
| Endoscopy | ​ | 5,636 | ​ | 3,034 | ​ | 8,131 | ​ | 6,049 |
| Total operating income | ​ | $46,880 | ​ | $45,946 | ​ | $87,913 | ​ | $81,868 |

Cardiovascular Operating Income. Our cardiovascular operating income for the three-month period ended June 30, 2025 was $41.2 million, compared to cardiovascular operating income in the corresponding period of 2024 of $42.9 million. The decrease in cardiovascular operating income during the three-month period ended June 30, 2025 compared to the corresponding period of 2024 was primarily a result of increased SG&A and R&D expense, partially offset by increased sales ($364.0 million compared to $327.8 million) and gross margin.

Our cardiovascular operating income for the six-month period ended June 30, 2025 was $79.8 million, compared to cardiovascular operating income in the corresponding period of 2024 of $75.8 million. The increase in cardiovascular operating income during the six-month period ended June 30, 2025 compared to the corresponding period of 2024 was primarily a result of increased sales ($702.7 million compared to $641.2 million) and gross margin, partially offset by increased SG&A, R&D and contingent consideration expenses.

Endoscopy Operating Income. Our endoscopy operating income for the three-month period ended June 30, 2025 was $5.6 million, compared to endoscopy operating income of $3.0 million for the corresponding period of 2024. Our endoscopy operating income for the six-month period ended June 30, 2025 was $8.1 million, compared to endoscopy operating income of $6.0 million for the corresponding period of 2024. The increase in endoscopy operating income for the three and six-month periods ended June 30, 2025 compared to the corresponding periods of 2024 was primarily a result of increased sales and gross margin, partially offset by increased SG&A expenses associated with higher labor related costs due to headcount additions in connection with the integration activities for the EGS Acquisition.

### Other Expense – Net

Our other expense for the three months ended June 30, 2025 and 2024 was $3.5 million and $0.1 million, respectively. Our other expense for the six-month periods ended June 30, 2025 and 2024 was $6.6 million and $1.7 million, respectively. The increase in other expense for the three and six-month periods ended June 30, 2025 compared to the corresponding periods of 2024 were primarily related to decreased interest income associated with reduced cash and cash equivalent balances, partially offset by a decrease in interest expense as a result of having no outstanding amounts due under the term loan of our Amended Fourth A&R Credit Agreement for the three and six-month periods ended June 30, 2025.

### Effective Tax Rate

Our provision for income taxes for the three-month periods ended June 30, 2025 and 2024 was a tax expense of $10.8 million and $10.1 million, respectively, which resulted in an effective tax rate of 24.9% and 22.1%, respectively. Our provision for income taxes for the six-month periods ended June 30, 2025 and 2024 was a tax expense of $18.6 million and $16.2 million, respectively, which resulted in an effective tax rate of 22.9% and 20.2%, respectively. The increase in the effective income tax rate and income tax expense for the three and six-month periods ended June 30, 2025, when compared to the prior-year periods, was primarily due to decreased benefit from discrete items such as share-based compensation and contingent liabilities and increased permanent tax differences in foreign jurisdictions.

### Net Income

Our net income for the three-month periods ended June 30, 2025 and 2024 was $32.6 million and $35.7 million, respectively. The decrease in our net income for the three-month period ended June 30, 2025 was the result of several principal factors, including increased SG&A and R&D expenses, other expenses, and income tax expense, partially offset by increased sales and gross margin.

Our net income for the six-month periods ended June 30, 2025 and 2024 was $62.7 million and $64.0 million, respectively. The decrease in our net income for the six-month period ended June 30, 2025 was the result of several principal factors, including increased SG&A and R&D expenses, contingent consideration expense, other expenses, and income tax expense, partially offset by increased sales and gross margin.

### LIQUIDITY AND CAPITAL RESOURCES

### Capital Commitments, Contractual Obligations and Cash Flows

As of June 30, 2025 and December 31, 2024, our current assets exceeded current liabilities by $697.5 million and $707.4 million, respectively, and we had cash, cash equivalents and restricted cash of $343.9 million and $378.8 million, respectively, of which $69.7 million and $50.6 million, respectively, were held by foreign subsidiaries. We currently believe future repatriation of cash and other property held by our foreign subsidiaries will generally not be subject to U.S. federal income tax. As a result, we are not permanently reinvested with respect to our historic unremitted foreign earnings. In addition, cash held by our subsidiary in China is subject to local laws and regulations that require government approval for the transfer of such funds to entities located outside of China. As of June 30, 2025, and December 31, 2024, we had cash, cash equivalents and restricted cash of $29.2 million and $18.1 million, respectively, within our subsidiary in China.

*Cash flows provided by operating activities.* We generated cash from operating activities of $123.9 million and $104.7 million during the six-month periods ended June 30, 2025 and 2024, respectively. Significant factors affecting operating cash flows during these periods included:

- Net income was $62.7 million and $64.0 million for the six-month periods ended June 30, 2025 and 2024, respectively.
- Depreciation and amortization was approximately $60.3 million and $47.7 million for the six-month periods ended June 30, 2025 and 2024, respectively. The increase in depreciation and amortization for the six-month period ended June 30, 2025 was primarily associated with the amortization of developed technology and other intangible assets acquired from EGS, Cook and Biolife.
- Cash provided by (used for) inventories was approximately $(11.7) million and $3.1 million for the six-month periods ended June 30, 2025 and 2024, respectively. The increase in inventories during 2025 was principally associated with our strategy to proactively invest in our inventory balances to encourage high customer service levels, as well as to build bridge inventory for production line transfers and increases in safety stock due to vendor supply delays.
- Cash (used for) provided by trade payables was $3.7 million and $(7.1) million for the six-month periods ended June 30, 2025 and 2024, respectively, due primarily to the timing of payments.
- Stock-based compensation expense was $20.0 million and $12.2 million for the six-month periods ended June 30, 2025 and 2024, respectively. The increase in stock-based compensation expense during 2025 is primarily associated with the increase in the Company’s stock price and grants of restricted stock units.

*Cash flows used in investing activities.* We used cash in investing activities of $173.0 million and $38.5 million for the six-month periods ended June 30, 2025 and 2024, respectively. We used cash for capital expenditures of property and equipment of $34.8 million and $22.3 million in the six-month periods ended June 30, 2025 and 2024, respectively. Capital expenditures in each period were primarily related to investments in property and equipment to support development and production of our products, and in 2025 includes costs for the construction of a new distribution facility in South Jordan, Utah. Historically, we have incurred significant expenses in connection with facility construction, production automation, product development and the introduction of new products. We anticipate that we will spend approximately $90 to $100 million in 2025 for property and equipment.

Cash outflows for the acquisition of equity investments and issuance of notes receivable were $14.6 million and $9.7 million for the six-month periods ended June 30, 2025 and 2024, respectively. Cash outflows invested in acquisitions were $122.6 million for the six-month period ended June 30, 2025 and were primarily related to the acquisition of Biolife in May 2025. Cash outflows invested in acquisitions were $4.9 million for the six-month period ended June 30, 2024 and were related to the initial payment for the acquisition of assets from SSI and a deferred payment for the acquisition of assets from Restore Endosystems.

*Cash flows provided by (used in) financing activities.* Cash provided by (used in) financing activities for the six-month periods ended June 30, 2025 and 2024 was $11.3 million and $(14.9) million, respectively. For the six-month period ended June 30, 2024, we had cash used in financing activities primarily attributable to repayment of net borrowings under our Amended Fourth A&R Credit Agreement in an aggregate amount of $24.1 million. We had cash proceeds from the issuance of Common Stock of $20.0 million and $10.9 million for the six-month periods ended June 30, 2025 and 2024, respectively, related to the exercise of non-qualified stock options.

As of June 30, 2025, we had outstanding borrowings of $747.5 million and had issued letter of credit guarantees of $2.9 million, with additional available borrowings of approximately $697 million under the Amended Fourth A&R Credit Agreement, based on the maximum net leverage ratio and the aggregate revolving credit commitment pursuant to the Amended Fourth A&R Credit Agreement. Our interest rate as of June 30, 2025 and December 31, 2024 was a fixed rate of 3.0% on our Convertible Notes.

We currently believe that our existing cash balances, anticipated future cash flows from operations and borrowings under our long-term debt agreements will be adequate to fund our current and currently planned future operations for the next twelve months and the foreseeable future. In the event we pursue and complete significant transactions or acquisitions in the future, additional funds may be required to meet our strategic needs, which may require us to raise additional funds in the debt or equity markets.

### CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Our financial results are affected by the selection and application of accounting policies and methods. In the six-month period ended June 30, 2025 there were no changes to the application of critical accounting policies previously disclosed in Part II, Item 7 of our 2024 Annual Report on Form 10-K.

### CAUTIONARY NOTICE REGARDING FORWARD-LOOKING STATEMENTS

This report contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements include, among others:

- statements proceeded or followed by, or that include the words, “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “intends,” “seeks,” “believes,” “estimates,” “projects,” “forecasts,” “potential,” “target,” “continue,” “upcoming,” “optimistic” or other forms of these words or similar words or expressions, or the negative thereof or other comparable terminology;
- statements that address our future operating performance or events or developments that we expect or anticipate will occur, including, without limitation, any statements regarding our projected earnings, revenues or other financial measures, our plans and objectives for future operations, our proposed new products or services, the integration, development or commercialization of the business or any assets acquired from other parties, future economic conditions or performance, the implementation of, and results which may be achieved through, Merit’s Continued Growth Initiatives Program or other business optimization initiatives, and any statements of assumptions underlying any of the foregoing; and
- statements regarding our past performance, efforts, or results about which inferences or assumptions may be made, including statements proceeded or followed by the words "preliminary," "initial," "potential," "possible," "diligence," "industry-leading," "compliant," "indications," or "early feedback" or other forms of these words or similar words or expressions, or the negative thereof or other comparable terminology.

The forward-looking statements contained in this report are based on our management’s current expectations and assumptions regarding future events or outcomes. If underlying expectations or assumptions prove inaccurate, or risks or uncertainties materialize, actual results will likely differ, and could differ materially, from our expectations reflected in any forward-looking statements. Financial estimates are subject to change and are not intended to be relied upon as predictions of future operating results. Investors are cautioned not to unduly rely on any such forward-looking statements.

The following are some of the important risks and uncertainties that could cause our actual results to differ from our expectations in any forward-looking statements: inherent risks and uncertainties associated with consequences of Merit’s executive succession planning activities and leadership transition; risks and uncertainties regarding trade policies or related actions implemented by the U.S. or other countries, including existing, proposed or prospective tariffs, duties or other measures; inherent risks and uncertainties associated with Merit’s acquisition of Biolife Delaware, L.L.C. (“Biolife”); Merit’s integration of the Biolife business and operations and its ability to achieve revenues and other financial measures consistent with its forecasts projected for the Biolife acquisition; inherent risks and uncertainties associated with Merit’s integration of products acquired from Cook Medical Holdings LLC and Merit’s ability to achieve anticipated financial results, product development and other anticipated benefits of such acquisition; effects of the Convertible Notes on Merit’s net income and earnings per share performance; disruptions in Merit’s supply chain, manufacturing or sterilization processes; U.S. and global political, economic, competitive, reimbursement and regulatory conditions; reduced availability of, and price increases associated with, components and other raw materials; increases in transportation expenses; risks relating to Merit’s potential inability to successfully manage growth through acquisitions generally, including the inability to effectively integrate acquired operations or products or commercialize technology developed internally or acquired through completed, proposed or future transactions; fluctuations in interest or foreign currency exchange rates and inflation; cybersecurity events; difficulties relating to development, testing and regulatory approval, clearance and maintenance of Merit’s products; the safety, efficacy and patient and physician adoption of Merit’s products; the ability to fully enroll and the outcomes of ongoing and future clinical trials and market studies relating to Merit’s products; modification or limitation of, or policies and procedures associated with, governmental or private insurance reimbursement policies; litigation and other judicial proceedings affecting Merit; consequences associated with a Corporate Integrity Agreement executed between Merit and the U.S. Department of Justice; failure to comply with U.S. and foreign laws and regulations; restrictions on Merit’s liquidity or business operations resulting from its debt agreements; infringement of Merit’s technology or the assertion that Merit’s technology infringes the rights of other parties; product recalls and product liability claims; potential for significant adverse changes in governing regulations; changes in tax laws and regulations in the United States or other jurisdictions or exposure to additional tax liabilities which may adversely affect our effective tax rate; termination of relationships with Merit’s suppliers, or failure of such suppliers to perform; development of new products and technology that could render Merit’s existing or future products obsolete; market acceptance of new products; failure to comply with applicable environmental laws; changes in key personnel; labor shortages and increases in labor costs; price and product competition; extreme weather events; and geopolitical events. For a further discussion of the risks and uncertainties and other factors affecting our business, see Part I, Item 1A. “Risk Factors” in our 2024 Annual Report on Form 10-K filed with the SEC, which we (i) updated in Part II, Item 1A. “Risk Factors” in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2025, (ii) update in Part II, Item 1A. “Risk Factors” in this report, and (iii) may further update in subsequent Quarterly Reports on Form 10-Q that we will file hereafter.

All subsequent forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by these cautionary statements. All forward-looking statements included in this report are made as of the date hereof and are based on information available to us as of such date. We assume no obligation to update any forward-looking statement. If we do update or correct one or more forward-looking statements, investors and others should not conclude that we will make additional updates or corrections.

### NOTICE REGARDING TRADEMARKS

This report includes trademarks, tradenames and service marks that are our property or the property of others. Solely for convenience, such trademarks and tradenames sometimes appear without any “™” or “®” symbol. However, failure to include such symbols is not intended to suggest, in any way, that we will not assert our rights or the rights of any applicable licensor, to these trademarks and tradenames.

## Market risk

As filed, 346 characters.

Quantitative and qualitative disclosures about currency exchange rate risk and interest rate risk are included in Part II, Item 7A "Quantitative and Qualitative Disclosures About Market Risk" in the 2024 Annual Report on Form 10-K. In the six-month period ended June 30, 2025, there were no material changes from the information provided therein.

## Controls and procedures

As filed, 2,480 characters.

### Evaluation of Disclosure Controls and Procedures

Our management is responsible for establishing and maintaining adequate disclosure controls and procedures for our company. Consequently, our management, with the participation of our chief executive officer and chief financial officer, evaluated the effectiveness of our disclosure controls and procedures pursuant to Rule 13a-15 under the Exchange Act as of June 30, 2025. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs. Based on that evaluation, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures are designed at a reasonable assurance level and are effective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.

### Changes in Internal Control Over Financial Reporting

Except as set forth below, during the quarter ended June 30, 2025, there were no changes in our internal control over financial reporting that materially affected, or were reasonably likely to materially affect, our internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934).

On May 20, 2025, we completed our acquisition of Biolife, L.L.C. We are currently integrating the policies, processes, employees, technology and operations of Biolife. Management does not currently expect a material change to our internal controls over financial reporting as we fully integrate Biolife. Management will continue to evaluate our internal control over financial reporting as we execute acquisition integration activities.

## Risk factors

As filed, 8,566 characters.

In addition to other information set forth in this report, readers should carefully consider the factors discussed in Part I, Item 1A. "Risk Factors" of our 2024 Annual Report on Form 10-K, as updated and supplemented below. Any of the risk factors disclosed in our reports could materially affect our business, financial condition or future results. The risks described here and in our 2024 Annual Report on Form 10-K are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially and adversely affect our business, financial condition and/or operating results. The discussion of the risk factors below updates the corresponding disclosure under the same heading in the 2024 Annual Report on Form 10-K and may contain material changes to the corresponding risk factor discussion in our 2024 Annual Report on Form 10-K.

***Changes in economic and geopolitical conditions, domestic and foreign trade policies, monetary policies and other factors beyond our control may adversely impact our business, operations and financial condition.***

Our operations and performance are significantly impacted by global, regional and U.S. economic and geopolitical conditions. The global macroeconomic environment continues to be challenging due to the effects of inflation, instability in global credit markets, uncertainty regarding global central bank monetary policy, instability in the geopolitical environment in many parts of the world, current economic challenges in China, and other factors. Periods of diplomatic or armed conflict, such as the ongoing conflict in Ukraine, tensions in the Middle East and China-Taiwan relations, may result in (i) new and rapidly evolving sanctions and trade restrictions, which may impair trade with sanctioned individuals and countries, and (ii) negative impacts to regional trade ecosystems among our customers, partners, and us. Non-compliance with sanctions, as well as general ecosystem disruptions, could result in reputational harm, operational delays, monetary fines, lost revenues, increased costs, lost export privileges or criminal sanctions.

The U.S. government recently announced changes to its trade policies, including increasing tariffs on imports, in some cases significantly, and potentially negotiating or terminating existing trade agreements. Many of the announced tariffs apply to countries from which we import our raw materials, component parts and finished products, including Mexico, Ireland and China, which could significantly increase our manufacturing costs. The current tariff environment is dynamic and uncertain, as the U.S. government has imposed, modified and paused tariffs multiple times since the beginning of 2025. Changes to tariffs and other trade restrictions can be announced at any time with little or no notice. We cannot predict with certainty the future trade policy of the United States or other countries. We are currently evaluating the potential impact of the imposition of tariffs on our business and financial condition. However, the ultimate impact of any announced or future tariffs will depend on various factors, including (i) whether such tariffs are ultimately implemented, (ii) the timing and duration of implementation and the amount, scope and nature of such tariffs and (iii) potential exclusions from the application of those tariffs.

Additionally, potential tariffs or other U.S. trade policy measures could trigger retaliatory actions by other countries, including by countries that are significant markets for our products, such as China. The escalation of trade tensions could impact Merit in a variety of ways, including (i) increases in manufacturing costs, including with respect to our products manufactured in the U.S., Mexico and Ireland, (ii) disruptions or delays to our global supply chain, (iii) limitations on our ability to sell our products domestically or abroad, and (iv) reductions in sales volumes and gross margins for our products, any of which could negatively affect our business, operations and financial condition.

Furthermore, tariffs or other trade restrictions may lead to continuing uncertainty and volatility in U.S. and global financial and economic conditions and commodity markets, significant inflation, and ultimately reduced demand for our products. Also, disruptions and volatility in the financial markets may lead to adverse changes in the availability, terms and cost of capital. Such adverse changes could increase our costs of capital and limit our access to external financing sources to fund acquisitions, capital expenditures, or refinancing of debt maturities on similar terms, which could in turn reduce our cash flows and limit our ability to pursue growth opportunities.

The above factors, as well as other economic and geopolitical factors in the U.S. and abroad, could have a material adverse effect on our business, operations and financial condition, including:

- changes in economic, monetary and fiscal policies in the U.S. and abroad;
- a global or regional economic slowdown in any of our market segments;
- public health crises, and government and social responses;
- government cost-reduction initiatives, including such initiatives implemented by the Trump administration;
- policies in various countries that favor domestic industries or restrict foreign companies;
- postponement of spending, in response to tighter credit, financial market volatility and other factors;
- rapid escalation of the cost of regulatory compliance and litigation; and
- credit risks, longer payment cycles and other challenges in collecting accounts receivable.

***If we are unable to effectively execute our leadership succession plans and attract, develop and retain key employees, our business and results of operations could be harmed.***

Effective succession planning is critical to our long-term success. Failure to ensure the transfer of knowledge and smooth transitions involving executives and other key employees could hinder our strategic planning and execution. Changes in our management team may be disruptive to our business, and any failure to successfully integrate key new hires or promote employees could adversely affect our operations.

On July 7, 2025, following the conclusion of an extensive search and evaluation process, we announced the appointment of Martha Aronson as Merit’s new President and Chief Executive Officer, effective October 3, 2025. Fred P. Lampropoulos will remain as Chairman of the Board, President and Chief Executive Officer through October 3, 2025, and will continue to serve as Chairman of the Board thereafter. While we seek to manage this leadership transition carefully, changes in leadership are inherently difficult and may negatively impact relationships with key customers, suppliers, investors and employees, cause operational or administrative inefficiencies or disruptions, distract from the achievement of our strategic business objectives, harm our workplace culture, result in loss of institutional knowledge, cause additional volatility in our stock price, or other adverse consequences resulting from the anticipated transition, the occurrence of any of which could have a materially adverse effect on our business.

We do not maintain key man life insurance on Mr. Lampropoulos or Ms. Aronson. The loss of Mr. Lampropoulos, Ms. Aronson, or of certain other key management personnel, could have a materially adverse effect on our business, operations and financial condition.

Our ability to compete effectively depends on our ability to attract, develop and retain executives and key employees. The market for experienced and talented employees, particularly for persons with certain technical competencies, is highly competitive. Inflationary pressures, labor demand and shortages and other macroeconomic factors have increased and could further increase the cost of labor, particularly in Mexico, and could harm our ability to recruit, hire and retain talented employees. Further, if we are unable to maintain (i) competitive and equitable compensation and benefit programs, including incentive programs which reward financial and operational performance, and (ii) an inclusive work culture that aligns our diverse workforce with our mission and values, our ability to recruit, hire, develop, engage, motivate and retain talented and experienced employees could be negatively affected, which could adversely impact our operating results and financial condition.

Filed Jul 30, 2025.
Source: SEC EDGAR, the filing index for accession 0000856982-25-000046. Last ingested by Listed: Oct 29, 2026, 17:39 ET. No prices; not investment advice.