What changed in this filing

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Item 1. Financial Statements

2025-10-30 compared with 2025-07-30 · 178 added, 129 removed, 726 unchanged (30% of the section changed)

4 unchanged sentences

(In thousands)

September 30,

Current assets:

27 unchanged sentences

(In thousands)

September 30,

LIABILITIES AND STOCKHOLDERS’ EQUITY

16 unchanged sentences

Preferred stock — 5,000 shares authorized;

no shares issued as of June 30, 2025 and December 31, 2024

no shares issued as of September 30, 2025 and December 31, 2024

Common stock, no par value — 100,000 shares authorized;

issued and outstanding as of June 30, 2025 - 59,218 and December 31, 2024 - 58,743

issued and outstanding as of September 30, 2025 - 59,290 and December 31, 2024 - 58,743

Retained earnings

8 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Cost of sales

20 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Other comprehensive income (loss):

Cash flow hedges

Income tax benefit (expense)

Income tax (expense) benefit

Foreign currency translation adjustment

23 unchanged sentences

Balance — June 30, 2025

Other comprehensive income

Stock-based compensation expense

Options exercised

Issuance of common stock under Employee Stock Purchase Plan

Shares surrendered in exchange for payment of payroll tax liabilities

Shares surrendered in exchange for exercise of stock options

Balance — September 30, 2025

See condensed notes to consolidated financial statements.

18 unchanged sentences

Balance — June 30, 2024

Other comprehensive income

Stock-based compensation expense

Options exercised

Issuance of common stock under Employee Stock Purchase Plan

Balance — September 30, 2024

See condensed notes to consolidated financial statements.

3 unchanged sentences

(In thousands - unaudited)

Six Months Ended

Nine Months Ended

September 30,

CASH FLOWS FROM OPERATING ACTIVITIES:

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(In thousands - unaudited)

Six Months Ended

Nine Months Ended

September 30,

CASH FLOWS FROM FINANCING ACTIVITIES:

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Effect of exchange rates on cash, cash equivalents, and restricted cash

Net (decrease) increase in cash, cash equivalents and restricted cash

Net increase (decrease) in cash, cash equivalents and restricted cash

CASH, CASH EQUIVALENTS AND RESTRICTED CASH:

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The interim consolidated financial statements of Merit Medical Systems, Inc.

("Merit," "we" or "us") for the three and six-month periods ended June 30, 2025 and 2024 are not audited.

("Merit," "we" or "us") for the three and nine-month periods ended September 30, 2025 and 2024 are not audited.

Our consolidated financial statements are prepared in accordance with the requirements for unaudited interim periods and, consequently, do not include all disclosures required to be made in conformity with accounting principles generally accepted in the United States of America.

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While we are still evaluating the specific impacts and adoption method, we anticipate this guidance will have a significant impact on our consolidated financial statement disclosures.

In July 2025, the FASB issued ASU 2025-05, Financial Instruments - Credit Losses (Topic 326):

Measurement of Credit Losses for Accounts Receivable and Contract Assets , which introduces a practical expedient for the application of the current expected credit loss model to current accounts receivable and contract assets.

The amendment is effective for interim and annual periods beginning after December 15, 2025, with early adoption permitted.

This amendment is to be applied on a prospective basis.

We are currently evaluating the impact of this amendment on our consolidated financial statements and related disclosures.

Revenue from Contracts with Customers.

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Our endoscopy segment consists of gastroenterology and pulmonology devices which assist in the palliative treatment of expanding esophageal, tracheobronchial and biliary strictures.

The following tables present revenue from contracts with customers by reporting segment, product category and geographic region for the three and six-month periods ended June 30, 2025 and 2024 (in thousands):

The following tables present revenue from contracts with customers by reporting segment, product category and geographic region for the three and nine-month periods ended September 30, 2025 and 2024 (in thousands):

Three Months Ended

June 30, 2025

June 30, 2024*

September 30, 2025

September 30, 2024*

United States

7 unchanged sentences

Endoscopy Devices

Six Months Ended

June 30, 2025

June 30, 2024*

Nine Months Ended

September 30, 2025

September 30, 2024*

United States

8 unchanged sentences

*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.

Revenue figures for 2024 have been recast to reflect this realignment of our portfolio of spine products, representing approximately $ 5.7 million and $ 16.7 million in revenue for the three and nine-month periods ended September 30, 2024, within the OEM product category to provide comparability between the reported periods.

Acquisitions and Investments.

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We accounted for the Biolife Merger as a business combination.

During the six-month period ended June 30, 2025, our net sales of Biolife products were approximately $ 1.4 million.

Our net sales of Biolife products since the date of the Biolife Merger were approximately $ 6.6 million for the nine-month period ended September 30, 2025.

It is not practical to separately report earnings related to the products acquired in connection with the Biolife Merger, as we cannot split our sales costs related solely to the Biolife products, principally because our sales representatives sell multiple products (including the Biolife products) in our cardiovascular business segment.

Acquisition-related costs associated with the Biolife Merger, which are included in selling, general and administrative expenses in the accompanying consolidated statements of income, were approximately $ 2.0 million for the six-month period ended June 30, 2025.

The following table summarizes the preliminary purchase price allocated to the net assets acquired in connection with the Biolife Merger (in thousands):

Acquisition-related costs associated with the Biolife Merger, which are included in selling, general and administrative expenses in the accompanying consolidated statements of income, were approximately $ 1.9 million for the nine-month period ended September 30, 2025.

The purchase price was allocated as follows (in thousands):

Assets Acquired

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Prepaid expenses and other current assets

Income tax refund receivables

Property and equipment

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Accrued expenses

Income taxes payable

Deferred income tax liabilities

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We are amortizing the Biolife developed technology intangible assets over 12 years , the trademark intangible assets over 12 years , and the customer list intangible asset on an accelerated basis over 12 years .

We have estimated the weighted average life of the intangible assets acquired from Biolife to be 12 years .

We have estimated the weighted average life of the intangible assets acquired in connection with the Biolife Merger to be 12 years .

The goodwill consists largely of the synergies expected from combining operations and is not expected to be deductible for tax purposes.

The pro forma effects to our consolidated results of operations of the Biolife Acquisition are not material in relation to reported sales .

On November 1, 2024, pursuant to the terms of the Asset Purchase Agreement (the “Cook Purchase Agreement”) dated September 18, 2024 between Merit and Cook Medical Holdings LLC, (“Cook”), we acquired Cook’s lead management business, which is composed of a comprehensive end-to-end portfolio of medical devices and accessories used in lead management procedures for patients who need a pacemaker or an implantable cardioverter-defibrillator lead removed or replaced.

The pro forma effects to our consolidated results of operations of the Biolife Merger are not material in relation to reported sales .

On November 1, 2024, pursuant to the terms of the Asset Purchase Agreement (the “Cook Purchase Agreement”) dated September 18, 2024 between Merit and Cook Medical Holdings LLC (“Cook”), we acquired Cook’s lead management business, which is composed of a comprehensive end-to-end portfolio of medical devices and accessories used in lead management procedures for patients who need a pacemaker or an implantable cardioverter-defibrillator lead removed or replaced (the “Cook Transaction”).

We acquired the portfolio for a purchase price of $ 210 million, plus the assumption of certain liabilities.

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The goodwill consists largely of the synergies expected from combining operations and is expected to be deductible for income tax purposes.

The pro forma effects on our consolidated results of operations of the Cook acquisition are not material in relation to reported sales and it was deemed impracticable to obtain information to determine earnings associated with the acquired product lines which represent only a small portion of the product lines of a large, consolidated company without standalone financial information .

The pro forma effects on our consolidated results of operations of the Cook Transaction are not material in relation to reported sales and it was deemed impracticable to obtain information to determine earnings associated with the acquired product lines which represent only a small portion of the product lines of a large, consolidated company without standalone financial information .

On July 1, 2024, we entered into an Asset Purchase Agreement (the “EGS Purchase Agreement”) with EndoGastric Solutions, Inc.

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We have accounted for this transaction as an asset purchase, and recorded the amount paid and deferred payments as a developed technology intangible asset, which we are amortizing over eight years .

Inventories at June 30, 2025 and December 31, 2024 consisted of the following (in thousands):

June 30, 2025

Inventories at September 30, 2025 and December 31, 2024 consisted of the following (in thousands):

September 30, 2025

December 31, 2024

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Goodwill and Intangible Assets.

The change in the carrying amount of goodwill by segment for the six-month period ended June 30, 2025 is detailed as follows (in thousands):

The change in the carrying amount of goodwill by segment for the nine-month period ended September 30, 2025 is detailed as follows (in thousands):

Cardiovascular

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Additions and adjustments as the result of acquisitions

Goodwill balance at June 30

Total accumulated goodwill impairment losses aggregated to $ 8.3 million as of June 30, 2025 and December 31, 2024, respectively.

We did no t have any goodwill impairments for the three and six-month periods ended June 30, 2025 or 2024.

Other intangible assets at June 30, 2025 and December 31, 2024 consisted of the following (in thousands):

June 30, 2025

Goodwill balance at September 30

Total accumulated goodwill impairment losses aggregated to $ 8.3 million as of September 30, 2025 and December 31, 2024, respectively.

We did no t have any goodwill impairments for the three and nine-month periods ended September 30, 2025 or 2024.

Other intangible assets at September 30, 2025 and December 31, 2024 consisted of the following (in thousands):

September 30, 2025

Gross Carrying

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Customer lists

Aggregate amortization expense for developed technology and other intangible assets for the three and six-month periods ended June 30, 2025 was $ 21.5 million and $ 41.5 million, respectively.

Aggregate amortization expense for the three and six-month periods ended June 30, 2024 was $ 14.8 million and $ 29.4 million, respectively.

Aggregate amortization expense for developed technology and other intangible assets for the three and nine-month periods ended September 30, 2025 was $ 21.8 million and $ 63.3 million, respectively.

Aggregate amortization expense for the three and nine-month periods ended September 30, 2024 was $ 16.9 million and $ 46.4 million, respectively.

We evaluate long-lived assets, including amortizing intangible assets, for impairment whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable.

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If a triggering event is identified, we determine the fair value of our amortizing assets based on estimated future cash flows discounted back to their present value using a discount rate that reflects the risk profiles of the underlying activities.

We did no t identify indicators of impairment for our intangible assets based on our consideration of triggering events for the six-month periods ended June 30, 2025 and 2024, respectively.

Estimated amortization expense for developed technology and other intangible assets for the next five years consisted of the following as of June 30, 2025 (in thousands):

We did no t identify indicators of impairment for our intangible assets based on our consideration of triggering events for the nine-month periods ended September 30, 2025 and 2024, respectively.

Estimated amortization expense for developed technology and other intangible assets for the next five years consisted of the following as of September 30, 2025 (in thousands):

Year ending December 31,

2 unchanged sentences

Income Taxes.

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.

On July 4, 2025, the U.S.

enacted a budget reconciliation package (known as the “One Big Beautiful Bill Act” or “OBBBA”) which includes a broad range of tax provisions affecting businesses.

The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027.

The Company has included the estimated impacts of the bill in the consolidated financial statements for the nine-month period ended September 30, 2025.

We will continue to evaluate the full impact of these legislative changes as additional guidance and results become available.

Our provision for income taxes for the three-month periods ended September 30, 2025 and 2024 was a tax expense of $ 10.8 million and $ 8.2 million, respectively, which resulted in an effective tax rate of 28.0 % and 22.4 %, respectively.

Our provision for income taxes for the nine-month periods ended September 30, 2025 and 2024 was a tax expense of $ 29.4 million and $ 24.4 million, respectively, which resulted in an effective tax rate of 24.5 % and 20.9 %, respectively.

The increase in the effective income tax rate for the three and nine-month periods ended September 30, 2025, when compared to the prior-year period, was primarily due to decreased benefit from discrete items such as share-based compensation and contingent liabilities and increased permanent tax differences in various jurisdictions and items related to the budget reconciliation package enacted during the period and retroactive to the beginning of the year.

The increase in the income tax expense for the three and nine-month periods ended September 30, 2025, when compared to the prior-year periods, was primarily due to increased pre-tax book income and the rate differences noted above.

Our effective tax rate differs from the U.S.

statutory rate primarily due to the impact of global intangible low-taxed income (“GILTI”) inclusions, state income taxes, foreign taxes, other nondeductible permanent items and discrete items (such as share-based compensation).

The Organization for Economic Cooperation and Development (“OECD”) Pillar Two global minimum tax rules, which generally provide for a minimum effective tax rate of 15%, were intended to apply for tax years beginning in 2024.

The Organization for Economic Cooperation and Development (“OECD”) Pillar Two global minimum tax rules, which generally provide for a minimum effective tax rate of 15%, are intended to apply for tax years beginning in 2024.

On February 2, 2023, the OECD issued administrative guidance providing transition and safe harbor rules around the implementation of the Pillar Two global minimum tax.

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We are closely monitoring developments and evaluating the impact these new rules are anticipated to have on our tax rate, including eligibility to qualify for these safe harbor rules.

On July 4, 2025, the U.S.

enacted a budget reconciliation package (known as the “One Big Beautiful Bill Act” or “OBBBA”) which includes a broad range of tax provisions affecting businesses.

As the legislation was signed into law after the close of our second quarter, the impacts are not included in our operating results for the six months ended June 30, 2025, in accordance with ASC 740, Income Taxes .

The Company is currently evaluating the impact of the new legislation and its impact on the consolidated financial statements.

We currently do not expect the OBBBA to have a material impact on our estimated annual effective tax rate in 2025.

Principal balances outstanding under our long-term debt obligations as of June 30, 2025 and December 31, 2024 consisted of the following (in thousands):

June 30, 2025

Principal balances outstanding under our long-term debt obligations as of September 30, 2025 and December 31, 2024 consisted of the following (in thousands):

September 30, 2025

December 31, 2024

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Long-term portion

Future minimum principal payments on our long-term debt, as of June 30, 2025, were as follows (in thousands):

Future minimum principal payments on our long-term debt, as of September 30, 2025, were as follows (in thousands):

Future Minimum

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(3) Minimum ratio of Consolidated EBITDA (as defined in the Amended Fourth A&R Credit Agreement and adjusted for certain expenditures) to Consolidated Interest Expense (as defined in the Amended Fourth A&R Credit Agreement) for any period of four consecutive fiscal quarters.

We were in compliance with these financial covenants set forth in the Amended Fourth A&R Credit Agreement as of June 30, 2025.

As of June 30, 2025, we had no outstanding borrowings and issued letter of credit guarantees of $ 2.9 million under the Amended Fourth A&R Credit Agreement, with additional available borrowings of approximately $ 697 million, based on the maximum net leverage ratio required pursuant to the Amended Fourth A&R Credit Agreement.

We were in compliance with these financial covenants set forth in the Amended Fourth A&R Credit Agreement as of September 30, 2025.

As of September 30, 2025, we had no outstanding borrowings and issued letter of credit guarantees of $ 3.0 million under the Amended Fourth A&R Credit Agreement, with additional available borrowings of approximately $ 697 million, based on the maximum net leverage ratio required pursuant to the Amended Fourth A&R Credit Agreement.

Convertible Notes

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or (5) Prior to the related redemption date if Merit calls any Convertible Notes for redemption.

As of June 30, 2025, none of the conditions permitting the Holders to convert their Convertible Notes early had been met.

As of September 30, 2025, none of the conditions permitting the Holders to convert their Convertible Notes early had been met.

Therefore, the Convertible Notes are classified as long-term debt obligations.

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Changes in the fair value of derivative instruments not designated as hedging instruments are recorded in earnings throughout the term of the derivative.

Derivatives Designated as Cash Flow Hedges

Interest Rate Risk.

In December 2019, we entered into a pay-fixed, receive-variable interest rate swap with a notional amount of $ 75 million with Wells Fargo wherein we fixed the one-month SOFR rate on that portion of our borrowings under the Amended Fourth A&R Credit Agreement.

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The objective of the forward contracts is to reduce the variability of cash flows associated with the forecasted purchase or sale of the foreign currencies.

As of June 30, 2025 and December 31, 2024, we had entered into foreign currency forward contracts, which qualified as cash flow hedges, with aggregate notional amounts of $ 168.9 million and $ 117.5 million, respectively.

As of September 30, 2025 and December 31, 2024, we had entered into foreign currency forward contracts, which qualified as cash flow hedges, with aggregate notional amounts of $ 152.6 million and $ 117.5 million, respectively.

Derivatives Not Designated as Cash Flow Hedges

We forecast our net exposure in various receivables and payables to fluctuations in the value of various currencies, and we enter into foreign currency forward contracts to mitigate a portion of that exposure.

As of June 30, 2025 and December 31, 2024, we had entered into foreign currency forward contracts related to those balance sheet accounts with aggregate notional amounts of $ 114.5 million and $ 95.7 million, respectively.

As of September 30, 2025 and December 31, 2024, we had entered into foreign currency forward contracts related to those balance sheet accounts with aggregate notional amounts of $ 109.0 million and $ 95.7 million, respectively.

Balance Sheet Presentation of Derivative Instruments.

As of June 30, 2025 and December 31, 2024, all derivative instruments, both those designated as hedging instruments and those that were not designated as hedging instruments, were recorded at fair value on a gross basis on our consolidated balance sheets.

As of September 30, 2025 and December 31, 2024, all derivative instruments, both those designated as hedging instruments and those that were not designated as hedging instruments, were recorded at fair value on a gross basis on our consolidated balance sheets.

We are not subject to any master netting agreements.

2 unchanged sentences

Balance Sheet Location

June 30, 2025

September 30, 2025

December 31, 2024

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Balance Sheet Location

June 30, 2025

September 30, 2025

December 31, 2024

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Reclassified from AOCI

Three Months Ended June 30,

Three Months Ended September 30,

Derivative instrument

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Reclassified from AOCI

Six Months Ended June 30,

Nine Months Ended September 30,

Derivative instrument

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Cost of sales

As of June 30, 2025, $ 0.2 million, or $ 0.2 million after taxes, was expected to be reclassified from AOCI to earnings in revenue and cost of sales over the succeeding twelve months.

As of September 30, 2025, ($ 1.3 ) million, or ($ 1.0 ) million after taxes, was expected to be reclassified from AOCI to earnings in revenue and cost of sales over the succeeding twelve months.

Derivative Instruments Not Designated as Hedging Instruments

The following gains/(losses) from these derivative instruments were recognized in our consolidated statements of income for the periods presented (in thousands):

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

Derivative Instrument

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Legal costs for these matters, such as outside counsel fees and expenses, are charged to expense in the period incurred.

Commencing in January 2022, we have received requests from the Division of Enforcement of the U.S.

Commencing in January 2022, we received requests from the Division of Enforcement of the U.S.

Securities and Exchange Commission (“SEC”) seeking the voluntary production of information relating to the business activities of Merit’s subsidiary in China, including interactions with hospitals and health care officials in China (the “SEC Inquiry”).

We are cooperating with the requests, investigating the matter and are engaged in steps in furtherance of reaching a resolution to the matter.

Currently, we are unable to predict the scope, timing, significance or outcome of the SEC Inquiry or estimate a reasonably possible loss or range of loss associated with the matter.

It is possible that the ultimate resolution of the SEC Inquiry, if resolved in a manner unfavorable to us, may be materially adverse to our business, financial position, results of operations or liquidity.

In management's opinion, based on its examination of these matters, its experience to date and discussions with counsel, other than the SEC Inquiry, we are not currently involved in any legal proceedings which, individually or in the aggregate, could have a material adverse effect on our financial position, results of operations or cash flows.

We cooperated with the requests and investigated the matter.

During the quarter ended September 30, 2025, the SEC’s Division of Enforcement notified us that they had concluded the SEC Inquiry and were not recommending enforcement action against us.

In management's opinion, based on its examination of these matters, its experience to date and discussions with counsel, we are not currently involved in any legal proceedings which, individually or in the aggregate, could have a material adverse effect on our financial position, results of operations or cash flows.

Our management regularly assesses the risks of legal proceedings in which we are involved, and management’s view of these matters may change in the future.

Earnings Per Common Share (EPS).

The computation of weighted average shares outstanding and the basic and diluted earnings per common share for the three and six-month periods ended June 30, 2025 and 2024 consisted of the following (in thousands, except per share amounts):

The computation of weighted average shares outstanding and the basic and diluted earnings per common share for the three and nine-month periods ended September 30, 2025 and 2024 consisted of the following (in thousands, except per share amounts):

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Average common shares outstanding

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The convertible notes only have an impact on diluted earnings per share when the average share price of our Common Stock exceeds the conversion price of $ 86.83 .

The average closing price of the Common Stock for the three and six-month periods ended June 30, 2025 and 2024, respectively, was used as the basis for determining the dilutive effect on EPS.

The average closing price of the Common Stock for the three and nine-month periods ended September 30, 2025 and 2024, respectively, was used as the basis for determining the dilutive effect on EPS.

Stock-Based Compensation Expense.

Stock-based compensation expense before income tax expense for the three and six-month periods ended June 30, 2025 and 2024 consisted of the following (in thousands) :

Stock-based compensation expense before income tax expense for the three and nine-month periods ended September 30, 2025 and 2024 consisted of the following (in thousands) :

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Cost of sales

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Nonqualified Stock Options

During the six months ended June 30, 2025 and 2024, we did no t grant any stock options.

As of June 30, 2025, the total remaining unrecognized compensation cost related to non-vested stock options was $ 7.0 million, which was expected to be recognized over a weighted average period of 1.2 years.

During the nine months ended September 30, 2025 and 2024, we did no t grant any stock options.

As of September 30, 2025, the total remaining unrecognized compensation cost related to non-vested stock options was $ 5.5 million, which was expected to be recognized over a weighted average period of 1.4 years.

Stock-Settled Performance-Based Restricted Stock Units (“Performance Stock Units”)

During the six-month periods ended June 30, 2025 and 2024, we granted Performance Stock Units which represented awards of up to 290,120 and 364,810 shares of Common Stock, respectively.

During the nine-month periods ended September 30, 2025 and 2024, we granted Performance Stock Units which represented awards of up to 290,120 and 364,810 shares of Common Stock, respectively.

Settlement of the Performance Stock Units into shares of Common Stock occurs at the end of the relevant performance periods.

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The fair value of each performance stock unit was estimated as of the grant date using the following assumptions for awards granted in the periods indicated below:

Six Months Ended

Nine Months Ended

September 30,

Risk-free interest rate

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At the end of the performance period, cumulative expense is calculated based on the actual performance metrics achieved.

As of June 30, 2025, the total remaining unrecognized compensation cost related to stock-settled Performance Stock Units was $ 33.8 million, which is expected to be recognized over a weighted average period of 1.5 years.

As of September 30, 2025, the total remaining unrecognized compensation cost related to stock-settled Performance Stock Units was $ 28.5 million, which is expected to be recognized over a weighted average period of 1.3 years.

Cash-Settled Performance-Based Awards

During the six-month periods ended June 30, 2025 and 2024, we granted Performance Stock Units to our Chief Executive Officer that provide for settlement in cash upon achievement of specific metrics (“Liability Awards”), with total target cash incentives in the amount of $ 1.7 million and $ 1.6 million, respectively.

During the nine-month periods ended September 30, 2025 and 2024, we granted Performance Stock Units to our Chief Executive Officer that provide for settlement in cash upon achievement of specific metrics (“Liability Awards”), with total target cash incentives in the amount of $ 1.7 million and $ 1.6 million, respectively.

The Liability Awards entitle him to a target cash payment based upon our level of rTSR performance and achievement of other performance metrics, as defined in the award agreements.

During the six-month periods ended June 30, 2025 and 2024, we granted additional Performance Stock Units to certain employees that provide for settlement in cash upon our achievement of specified financial metrics.

During the nine-month periods ended September 30, 2025 and 2024, we granted additional Performance Stock Units to certain employees that provide for settlement in cash upon our achievement of specified financial metrics.

The cash payable upon vesting at the end of the service period is based upon performance against specified financial performance targets and relative total shareholder return as compared to the rTSR, as defined in the award agreements.

Compensation expense is recognized in an amount equal to the cash payment likely to be awarded based on the performance metrics.

The potential maximum payout of these Liability Awards is 250 % of the target cash incentive, resulting in a total potential maximum payout of $ 4.7 million and $ 4.4 million for Liability Awards granted during the six-month periods ended June 30, 2025 and 2024, respectively.

The potential maximum payout of these Liability Awards is 250 % of the target cash incentive, resulting in a total potential maximum payout of $ 4.7 million and $ 4.4 million for Liability Awards granted during the nine-month periods ended September 30, 2025 and 2024, respectively.

The settlement generally occurs at the end of three-year performance periods based upon the same performance metrics and vesting period as our Performance Stock Units.

The fair value of these Liability Awards is measured at each reporting period until the awards are settled.

As of June 30, 2025 and December 31, 2024, the recorded balance associated with these Liability Awards was $ 4.7 million and $ 5.1 million, respectively, which have been classified as liabilities and reported in accrued expenses and other long-term obligations within our consolidated balance sheets.

As of June 30, 2025, the total remaining unrecognized compensation cost related to Liability Awards was $ 5.7 million, which was expected to be recognized over a weighted average period of 1.6 years.

As of September 30, 2025 and December 31, 2024, the recorded balance associated with these Liability Awards was $ 5.7 million and $ 5.1 million, respectively, which have been classified as liabilities and reported in accrued expenses and other long-term obligations within our consolidated balance sheets.

As of September 30, 2025, the total remaining unrecognized compensation cost related to Liability Awards was $ 4.4 million, which was expected to be recognized over a weighted average period of 1.8 years.

Restricted Stock Units

During the six-month periods ended June 30, 2025 and 2024, we granted restricted stock units to certain employees and non-employee directors representing 135,778 and 158,719 shares of Common Stock, respectively.

During the nine-month periods ended September 30, 2025 and 2024, we granted restricted stock units to certain employees and non-employee directors representing 135,778 and 158,719 shares of Common Stock, respectively.

The expense recognized for restricted stock units is equal to the closing stock price on the date of grant, which is recognized over the vesting period.

Restricted stock units granted to each employee are subject to such employee’s continued employment through the vesting date, which is four years from the date of grant.

Restricted stock units granted to each employee are subject to such employee’s continued employment through the vesting date, which is between three to four years from the date of grant.

Restricted stock units granted to each non-employee director are subject to such director’s continued service through the vesting date, which is one year from the grant date.

As of June 30, 2025, the total remaining unrecognized compensation cost related to restricted stock units was $ 30.8 million, which was expected to be recognized over a weighted average period of 2.9 years.

As of September 30, 2025, the total remaining unrecognized compensation cost related to restricted stock units was $ 27.7 million, which was expected to be recognized over a weighted average period of 2.6 years.

Segment Reporting.

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therefore, total assets by segment are not disclosed.

Financial information relating to our reportable operating segments and reconciliations to the consolidated totals for the three and six-month periods ended June 30, 2025 and 2024, were as follows (in thousands):

Financial information relating to our reportable operating segments and reconciliations to the consolidated totals for the three and nine-month periods ended September 30, 2025 and 2024, were as follows (in thousands):

Three Months Ended

June 30, 2025

June 30, 2024

September 30, 2025

September 30, 2024

Cardiovascular

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Income before income taxes

Six Months Ended

June 30, 2025

June 30, 2024

Nine Months Ended

September 30, 2025

September 30, 2024

Cardiovascular

12 unchanged sentences

(3) Other operating expenses include contingent consideration expense (benefit) related to the changes in fair value of contingent payments associated with acquisitions.

Total depreciation and amortization by operating segment for the three and six-month periods ended June 30, 2025 and 2024, consisted of the following (in thousands):

Total depreciation and amortization by operating segment for the three and nine-month periods ended September 30, 2025 and 2024, consisted of the following (in thousands):

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Cardiovascular

1 unchanged sentence

Assets (Liabilities) Measured at Fair Value on a Recurring Basis

Our financial assets and (liabilities) carried at fair value and measured on a recurring basis as of June 30, 2025 and December 31, 2024 consisted of the following (in thousands):

Our financial assets and (liabilities) carried at fair value and measured on a recurring basis as of September 30, 2025 and December 31, 2024 consisted of the following (in thousands):

Fair Value Measurements Using

4 unchanged sentences

unobservable inputs

June 30, 2025

September 30, 2025

Money market funds (1)

26 unchanged sentences

We measure the initial liability and re-measure the liability on a recurring basis using Level 3 inputs as defined under authoritative guidance for fair value measurements.

Changes in the fair value of our contingent consideration liabilities during the three and six-month periods ended June 30, 2025 and 2024 consisted of the following (in thousands):

Changes in the fair value of our contingent consideration liabilities during the three and nine-month periods ended September 30, 2025 and 2024 consisted of the following (in thousands):

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Beginning balance

2 unchanged sentences

Ending balance

As of June 30, 2025, $ 1.7 million in contingent consideration liability was included in other long-term obligations and $ 0.3 million in contingent consideration liability was included in accrued expenses in our consolidated balance sheet.

As of September 30, 2025, $ 1.6 million in contingent consideration liability was included in other long-term obligations and $ 0.3 million in contingent consideration liability was included in accrued expenses in our consolidated balance sheet.

As of December 31, 2024, $ 3.1 million in contingent consideration liability was included in other long-term obligations and $ 0.4 million in contingent consideration liability was included in accrued expenses in our consolidated balance sheet.

Payments related to the settlement of the contingent consideration liability recognized at fair value as of the applicable acquisition date of $2.5 million and $ 0.1 million for the six-month periods ended June 30, 2025 and 2024, respectively, have been reflected as a cash outflow from financing activities in the accompanying consolidated statements of cash flows.

Payments related to increases in the contingent consideration liability subsequent to the date of acquisition of $ 0.1 million and $ 0.1 million for the six-month periods ended June 30, 2025 and 2024, respectively, are reflected as operating cash flows.

The recurring Level 3 measurement of our contingent consideration liabilities included the following significant unobservable inputs at June 30, 2025 and December 31, 2024 (amounts in thousands):

Payments related to the settlement of the contingent consideration liability recognized at fair value as of the applicable acquisition date of $ 2.6 million and $ 0.2 million for the nine-month periods ended September 30, 2025 and 2024, respectively, have been reflected as a cash outflow from financing activities in the accompanying consolidated statements of cash flows.

Payments related to increases in the contingent consideration liability subsequent to the date of acquisition of $ 0.1 million and $ 0.1 million for the nine-month periods ended September 30, 2025 and 2024, respectively, are reflected as operating cash flows.

The recurring Level 3 measurement of our contingent consideration liabilities included the following significant unobservable inputs at September 30, 2025 and December 31, 2024 (amounts in thousands):

Fair value at

September 30,

Contingent consideration liability

3 unchanged sentences

Discount rate

13.0 % - 15.0 %

Projected year of payments

28 unchanged sentences

The carrying amount of cash and cash equivalents, receivables, and trade payables approximate fair value because of the immediate, short-term maturity of these financial instruments.

The fair value of our long-term debt under our Convertible Notes was $ 934.4 million as of June 30, 2025 and was determined based on quoted prices in markets that are not active, which is considered a Level 2 valuation input.

The fair value of our long-term debt under our Convertible Notes was $ 870.8 million as of September 30, 2025 and was determined based on quoted prices in markets that are not active, which is considered a Level 2 valuation input.

The fair value of assets and liabilities whose carrying value approximates fair value is determined using Level 2 inputs, with the exception of cash and cash equivalents, which use Level 1 inputs.

4 unchanged sentences

All our nonrecurring valuations use significant unobservable inputs and therefore fall under Level 3 of the fair value hierarchy.

Our equity investments in privately-held companies were $ 25.9 million and $ 22.8 million at June 30, 2025 and December 31, 2024, respectively, which are included within other long-term assets in our consolidated balance sheets.

Our equity investments in privately-held companies were $ 26.0 million and $ 22.8 million at September 30, 2025 and December 31, 2024, respectively, which are included within other long-term assets in our consolidated balance sheets.

We analyze our investments in privately-held companies to determine if they should be accounted for using the equity method based on our ability to exercise significant influence over operating and financial policies of the investment whereby we record our proportionate share of the investee’s earnings or losses;

2 unchanged sentences

Investments not accounted for under the equity method of accounting are accounted for at cost minus impairment, if applicable, plus or minus changes in valuation resulting from observable transactions for identical or similar investments .

For the six-month periods ended June 30, 2025 and 2024, we recorded no impairment charges related to our equity investments.

For the nine-month periods ended September 30, 2025 and 2024, we recorded no impairment charges related to our equity investments.

Current Expected Credit Losses

Our outstanding long-term notes receivable, including accrued interest and an allowance for current expected credit losses, were $ 21.0 million and $ 9.4 million as of June 30, 2025 and December 31, 2024, respectively.

Long-term notes receivable increased $ 11.6 million for the six-month period ended June 30, 2025 related to loans issued to FluidX Medical Technology, Inc.

Our outstanding notes receivable, including accrued interest and an allowance for current expected credit losses, were $ 21.2 million and $ 9.4 million as of September 30, 2025 and December 31, 2024, respectively.

Notes receivable increased $ 11.8 million for the nine-month period ended September 30, 2025 primarily due to loans issued to FluidX Medical Technology, Inc.

and Protaryx Medical Inc.

As of June 30, 2025 and December 31, 2024, we had an allowance for current expected credit losses of $ 2.4 million and $ 1.4 million, respectively, associated with these notes receivable.

As of September 30, 2025 and December 31, 2024, we had an allowance for current expected credit losses of $ 2.6 million and $ 1.4 million, respectively, associated with these notes receivable.

We assess the allowance for current expected credit losses on an individual security basis, due to the limited number of securities, using a probability of default model, which is based on relevant information about past events, including historical experience, current conditions and reasonable and supportable forecasts that affect the expected collectability of securities, and other security specific factors.

The table below presents a roll-forward of the allowance for current expected credit losses on our notes receivable for the three and six-month periods ended June 30, 2025 and 2024 (in thousands):

The table below presents a roll-forward of the allowance for current expected credit losses on our notes receivable for the three and nine-month periods ended September 30, 2025 and 2024 (in thousands):

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Beginning balance

2 unchanged sentences

Accumulated Other Comprehensive Income (Loss).

The changes in each component of accumulated other comprehensive income (loss) for the three and six-month periods ended June 30, 2025 and 2024 were as follows:

The changes in each component of accumulated other comprehensive income (loss) for the three and nine-month periods ended September 30, 2025 and 2024 were as follows:

Cash Flow Hedges

Foreign Currency Translation

Balance as of April 1, 2025

Balance as of July 1, 2025

Other comprehensive income (loss)

2 unchanged sentences

Net other comprehensive income (loss)

Balance as of June 30, 2025

Balance as of September 30, 2025

Cash Flow Hedges

Foreign Currency Translation

Balance as of April 1, 2024

Other comprehensive loss

Balance as of July 1, 2024

Other comprehensive (loss) income

Reclassifications to:

1 unchanged sentence

Interest expense

Net other comprehensive loss

Balance as of June 30, 2024

Net other comprehensive (loss) income

Balance as of September 30, 2024

Cash Flow Hedges

1 unchanged sentence

Balance as of January 1, 2025

Other comprehensive income (loss)

Other comprehensive (loss) income

Reclassifications to:

Cost of sales

Net other comprehensive income (loss)

Balance as of June 30, 2025

Net other comprehensive (loss) income

Balance as of September 30, 2025

Cash Flow Hedges

1 unchanged sentence

Balance as of January 1, 2024

Other comprehensive income (loss)

Other comprehensive (loss) income

Reclassifications to:

1 unchanged sentence

Interest expense

Net other comprehensive income (loss)

Balance as of June 30, 2024

Net other comprehensive (loss) income

Balance as of September 30, 2024

Subsequent Events.

On October 3, 2025, (i) Fred P.

Lampropoulos resigned as Chief Executive Officer and President of Merit and transitioned his employment to the role of Executive Chairman and (ii) Merit's Board of Directors appointed Martha G.

Aronson as Merit's new Chief Executive Officer and President.

The Board of Directors also voted to expand the number of directors on Merit’s Board of Directors from ten to eleven and to appoint Ms.

Aronson as a director.

In connection with Ms.

Aronson's appointment , the Company granted to Ms.

Aronson (x) restricted stock units representing 19,594 shares of Common Stock with a three-year vesting period and (y) Performance Stock Units representing up to 73,478 shares of Common Stock, subject to Merit’s financial and market performance relative to specified targets, which will be released at the end of the performance period.

On October 15, 2025, we entered into an Asset Purchase Agreement (the “Pentax Agreement”) with Pentax of America, Inc., a subsidiary of PENTAX® Medical, Inc., to acquire the C2 CryoBalloon™ device and related technology for total cash consideration of $ 22 million (collectively, the “Pentax Acquisition”).

The closing of the proposed transaction is expected to occur during the fourth quarter of 2025, subject to the satisfaction or waiver (in accordance with the provisions of the Pentax Agreement) of certain customary closing conditions.

The total purchase consideration consists of a $ 19 million cash payment at closing and potential contingent payments of up to $ 3 million payable upon meeting certain milestones.

We are currently evaluating the accounting treatment of the Pentax Acquisition, as well as performing the valuation of the assets acquired and the related purchase price allocation.

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 1. Financial Statements