What changed in this filing

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Item 1A. Risk Factors

2025-04-24 compared with 2024-10-30 · 36 added, 24 removed, 3 unchanged (95% of the section changed)

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 2023 Annual Report on Form 10-K, as updated and supplemented below and in our Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2024 (the “Second Quarter 2024 Form 10-Q”).

"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 2023 Annual Report on Form 10-K and Second Quarter 2024 Form 10-Q are not the only risks we face.

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 2023 Annual Report on Form 10-K and may contain material changes to the corresponding risk factor discussion in our 2023 Annual Report on Form 10-K.

We may incur substantial costs when evaluating, negotiating and closing acquisitions, and our failure to integrate acquired businesses may adversely impact our business and financial results.

We seek to supplement our internal growth through strategic acquisitions and transactions.

We have completed a series of strategic acquisitions and transactions in recent years, some of which have been significant, such as the AngioDynamics Acquisition and the EGS Acquisition.

We are in the process of completing the proposed Cook Acquisition.

We continue to evaluate other potential acquisitions and transactions, certain of which may also be significant.

We have incurred, and will likely continue to incur, significant expenses in connection with evaluating, negotiating and consummating various acquisition and other transactions.

Our integration of acquired businesses requires considerable efforts, including corporate restructuring and the coordination of information technologies, research and development, sales and marketing, operations, regulatory, supply chain, manufacturing, quality systems and finance.

These efforts result in additional expenses and involve significant management time.

Some of the factors that could affect the success of our acquisitions include, among others, the effectiveness of our due diligence process, our ability to execute our business plan for the acquired companies, the strength of the acquired technology, results of clinical trials, regulatory approvals and reimbursement levels of the acquired products and related procedures, the continued performance of critical transition services, our ability to adequately fund acquired in-process research and development projects and retain key employees and our ability to achieve synergies with our acquired companies, such as increasing sales of our products, achieving cost savings and effectively combining technologies to develop new products.

Foreign acquisitions involve unique risks, including those related to integration of operations across different geographies, cultures and languages, currency risks and risks associated with the economic, political, legal and regulatory environment in specific countries.

In addition, we have and may in the future acquire less than full ownership interests in other businesses, which involve unique challenges for effective collaboration.

Further, other parties that hold remaining ownership interests in such businesses may at any time have economic or business goals that are inconsistent with our goals or the goals of such businesses.

Our failure to manage these challenges successfully and coordinate the growth of such businesses or other investments could have an adverse impact on our business and our future growth.

In addition, we cannot be certain that the businesses we acquire or invest in will become profitable or remain so, and if our acquisitions or investments are not successful, we may record related asset impairment charges in the future or experience other negative consequences on our operating results.

Additionally, past and future acquisitions and transactions may increase the risks of competition we face by, among other things, extending our operations into industry segments and product lines where we have few existing customers or qualified sales personnel and limited expertise.

Further, as a result of certain acquisitions, we are selling capital equipment, in addition to our historical sales of disposable medical devices.

The sale of capital equipment may create additional risks and potential liability, which may negatively affect our business, operations or financial condition.

In addition, we may not realize competitive advantages, synergies or other benefits anticipated in connection with any such acquisition or other transaction.

If we do not adequately identify and value targets for, or manage issues related to, acquisitions and other transactions, such transactions may not produce the anticipated benefits and have an adverse effect on our business, operations or financial condition.

We have incurred expenses in connection with the disposition of businesses and assets which we acquired but determined that they did not produce the benefits contemplated at the time of acquisition.

We may incur similar expenses in the future.

The discussion of the risk factor 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.

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.

For example, in response to the recent tariffs announced by the U.S.

government, on April 12, 2025, China imposed a 125% tariff on goods imported from the U.S., which could significantly increase our expenses on some of our products sold in 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.

● 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;

● credit risks, longer payment cycles and other challenges in collecting accounts receivable.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1A. Risk Factors