Item 2. Management’s Discussion and Analysis
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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 and in our Quarterly Reports on Form 10-Q for each of the quarters ended March 31, 2025 and June 30, 2025.
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 September 30, 2025, we reported sales of $384.2 million, an increase of $44.3 million or 13.0% compared to sales for the three-month period ended September 30, 2024 of $339.8 million. For the nine-month period ended September 30, 2025, we reported sales of $1,122.0 million, an increase of $120.6 million or 12.0% compared to sales for the nine-month period ended September 30, 2024 of $1,001.4 million. Foreign currency fluctuations (net of hedging) increased our net sales by $1.9 million and $0.8 million for the three and nine-month periods ended September 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 48.5% for the three-month period ended September 30, 2025 compared to 46.4% for the three-month period ended September 30, 2024. Gross profit as a percentage of sales increased to 48.4% for the nine-month period ended September 30, 2025 compared to 47.0% for the nine-month period ended September 30, 2024.
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Net income for the three-month period ended September 30, 2025 was $27.8 million, or $0.46 per share, compared to net income of $28.4 million, or $0.48 per share, for the three-month period ended September 30, 2024. Net income for the nine-month period ended September 30, 2025 was $90.5 million, or $1.49 per share, compared to net income of $92.4 million, or $1.57 per share, for the nine-month period ended September 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 September 30, 2025 were driven primarily by demand in the U.S. and favorable sales trends in each of our international regions.
● As of September 30, 2025, we had cash, cash equivalents, and restricted cash of $394.6 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.
RESULTS OF OPERATIONS
The following table sets forth certain operational data as a percentage of sales for the periods indicated:
Three Months Ended
Nine Months Ended
September 30,
September 30,
2025
2024
2025
2024
Net sales
100
%
100
%
100
%
100
%
Gross profit
48.5
46.4
48.4
47.0
Selling, general and administrative expenses
31.2
29.3
30.3
28.8
Research and development expenses
6.2
6.0
6.3
6.2
Contingent consideration expense
0.0
0.0
0.1
0.0
Income from operations
11.1
11.0
11.6
11.9
Other expense — net
(1.1)
(0.2)
(0.9)
(0.2)
Income before income taxes
10.0
10.8
10.7
11.7
Net income
7.2
8.4
8.1
9.2
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Sales
Sales for the three-month period ended September 30, 2025 increased by 13.0%, or $44.3 million, compared to the corresponding period in 2024. Sales for nine-month period ended September 30, 2025 increased by 12.0%, or $120.6 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 nine-month periods ended September 30, 2025 and 2024 (in thousands, other than percentage changes):
Three Months Ended
Nine Months Ended
September 30,
September 30,
% Change
2025
2024*
% Change
2025
2024*
Cardiovascular
Peripheral Intervention
8.8
%
$
144,781
$
133,083
6.9
%
$
424,907
$
397,535
Cardiac Intervention
29.3
%
116,682
90,240
21.2
%
331,674
273,723
Custom Procedural Solutions
7.3
%
54,136
50,455
4.4
%
155,712
149,110
OEM
3.6
%
50,826
49,077
9.2
%
156,870
143,676
Total
13.5
%
366,425
322,855
10.9
%
1,069,163
964,044
Endoscopy
Endoscopy Devices
4.4
%
17,732
16,990
41.5
%
52,807
37,312
Total
13.0
%
$
384,157
$
339,845
12.0
%
$
1,121,970
$
1,001,356
*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 $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.
Cardiovascular Sales. Our cardiovascular sales for the three-month period ended September 30, 2025 were $366.4 million, up 13.5% when compared to the corresponding period of 2024 of $322.9 million. Sales for the three-month period ended September 30, 2025 were favorably affected by increased sales of:
(a) Peripheral intervention products, which increased by $11.7 million, or 8.8%, from the corresponding period of 2024. This increase was driven primarily by increased sales of our embolotherapy, access, delivery systems and angiography products.
(b) Cardiac intervention products, which increased by $26.4 million, or 29.3%, from the corresponding period of 2024. This increase was driven primarily by $10.7 million in sales associated with products acquired from Cook in November 2024, $5.3 million in sales associated with products acquired in connection with the Biolife Merger in May 2025 and increased sales of our intervention, cardiac rhythm management/electrophysiology (“CRM/EP”), access and angiography products.
(c) OEM products, which increased by $1.7 million, or 3.6%, from the corresponding period of 2024. This increase was driven primarily by increased sales of our CRM/EP and angiography products, offset partially by decreased sales of our access products.
(d) Custom procedural solutions products, which increased by $3.7 million, or 7.3%, from the corresponding period of 2024. This increase was driven primarily by increased sales of our kits.
Our cardiovascular sales for the nine-month period ended September 30, 2025 were $1,069.2 million, up 10.9% when compared to the corresponding period of 2024 of $964.0 million. Sales for the nine-month period ended September 30, 2025 were favorably affected by increased sales of:
(a) Peripheral intervention products, which increased by $27.4 million, or 6.9%, from the corresponding period of 2024. This increase was driven primarily by increased sales of our embolotherapy, access, delivery systems, radar localization and drainage products.
(b) Cardiac intervention products, which increased by $58.0 million, or 21.2%, from the corresponding period of 2024. This increase was driven primarily by $30.1 million in sales associated with products acquired from Cook in November 2024, $6.6 million in sales associated with products acquired in connection with the Biolife Merger
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in May 2025 and increased sales of our intervention, CRM/EP, angiography, access and fluid management products.
(c) OEM products, which increased by $13.2 million, or 9.2%, from the corresponding period of 2024. This increase was driven primarily by increased sales of our intervention, CRM/EP and angiography products as well as our kits, offset partially by decreased sales of our coated tube and wire products.
(d) Custom procedural solutions products, which increased by $6.6 million, or 4.4%, from the corresponding period of 2024. This increase was driven primarily by increased sales of our critical care products as well as our kits and trays.
Endoscopy Sales . Our endoscopy sales for the three-month period ended September 30, 2025 were $17.7 million, up 4.4% when compared to sales in the corresponding period of 2024 of $17.0 million. Sales for the three-month period ended September 30, 2025 compared to the corresponding period in 2024 were favorably affected by increased sales of our EsophyX® Z+ device and ReSolve Thoracostomy Trays.
Our endoscopy sales for the nine-month period ended September 30, 2025 were $52.8 million, up 41.5% when compared to sales in the corresponding period of 2024 of $37.3 million. Sales for the nine-month period ended September 30, 2025 compared to the corresponding period in 2024 were favorably affected by increased sales of our EsophyX® Z+ device acquired from EGS in July 2024.
Geographic Sales
Listed below are sales by geography for the three and nine-month periods ended September 30, 2025 and 2024 (in thousands, other than percentage changes):
Three Months Ended
Nine Months Ended
September 30,
September 30,
% Change
2025
2024
% Change
2025
2024
United States
11.7
%
$
230,597
$
206,492
14.3
%
$
671,243
$
587,250
International
15.2
%
153,560
133,353
8.8
%
450,727
414,106
Total
13.0
%
$
384,157
$
339,845
12.0
%
$
1,121,970
$
1,001,356
United States Sales. U.S. sales for the three-month period ended September 30, 2025 were $230.6 million, or 60.0% of net sales, up 11.7% when compared to the corresponding period of 2024. The increase in our domestic sales for the three-month period ended September 30, 2025, compared to the corresponding period of 2024 was driven primarily by our U.S. Direct and OEM businesses.
U.S. sales for the nine-month period ended September 30, 2025 were $671.2 million, or 59.8%% of net sales, up 14.3% when compared to the corresponding period of 2024. The increase in our domestic sales for the nine-month period ended September 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 September 30, 2025 were $153.6 million, or 40.0% of net sales, up 15.2% when compared to the corresponding period of 2024 of $133.4 million. The increase in our international sales for the three-month period ended September 30, 2025, compared to the corresponding period of 2024 included increased sales in our Rest of World (“ROW”) operations of $2.7 million or 18.5%, our Europe, the Middle East and Africa (“EMEA”) operations of $13.1 million or 22.3% and our Asia Pacific (“APAC”) operations of $4.5 million or 7.4%.
International sales for the nine-month period ended September 30, 2025 were $450.7 million, or 40.2% of net sales, up 8.8% when compared to the corresponding period of 2024 of $414.1 million. The increase in our international sales for the nine-month period ended September 30, 2025, compared to the corresponding period of 2024 included increased sales in our ROW operations of $7.0 million or 16.7%, our EMEA operations of $25.6 million or 14.1% and our APAC operations of $3.9 million or 2.1%.
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Gross Profit
Our gross profit as a percentage of sales increased to 48.5% for the three-month period ended September 30, 2025, compared to 46.4% for the three-month period ended September 30, 2024. Our gross profit as a percentage of sales increased to 48.4% for the nine-month period ended September 30, 2025, compared to 47.0% for the nine-month period ended September 30, 2024. The increase in gross profit percentage for the three and nine-month periods ended September 30, 2024 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 $20.2 million, or 20.2%, for the three-month period ended September 30, 2025 compared to the corresponding period of 2024. As a percentage of sales, SG&A expenses were 31.2% for the three-month period ended September 30, 2025, compared to 29.3% for the corresponding period of 2024. SG&A expenses increased $51.7 million, or 17.9%, for the nine-month period ended September 30, 2025 compared to the corresponding period of 2024. As a percentage of sales, SG&A expenses were 30.3%% for the nine-month period ended September 30, 2025, compared to 28.8%% for the corresponding period of 2024. For the three and nine-month periods ended September 30, 2025, SG&A expenses increased compared to the corresponding period of 2024, primarily due to an increase in labor-related costs including (i) variable compensation associated with performance-based bonus programs, commissions associated with sales growth, as well as an increase in expense associated with both performance and non-performance based equity awards; and (ii) headcount additions to support investment in the business and growth from acquisitions, including those in connection with the Cook Transaction and the Biolife Merger.
Research and Development Expenses. Research and development (“R&D”) expenses for the three-month period ended September 30, 2025 were $24.0 million, up 16.8%, when compared to R&D expenses in the corresponding period of 2024 of $20.5 million. R&D expenses for the nine-month period ended September 30, 2025 were $70.8 million, up 13.7%, when compared to R&D expenses in the corresponding period of 2024 of $62.3 million. For the three and nine-month periods ended September 30, 2025, R&D expenses increased compared to the corresponding periods of 2024 primarily due to increased regulatory costs and clinical trials.
Contingent Consideration Expense . For the three and nine-month periods ended September 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 $0.0 million and $1.2 million, compared to contingent consideration expense of $0.1 million and $0.3 million for the three and nine-month periods ended September 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 nine-month periods ended September 30, 2025 and 2024 (in thousands):
Three Months Ended
Nine Months Ended
September 30,
September 30,
2025
2024
2025
2024
Operating Income
Cardiovascular
$
37,778
$
37,555
$
117,560
$
113,374
Endoscopy
4,834
(294)
12,965
5,755
Total operating income
$
42,612
$
37,261
$
130,525
$
119,129
Cardiovascular Operating Income. Our cardiovascular operating income for the three-month period ended September 30, 2025 was $37.8 million, compared to cardiovascular operating income in the corresponding period of 2024 of $37.6 million. The increase in cardiovascular operating income during the three-month period ended September 30, 2025 compared to the corresponding period of 2024 was primarily a result of increased sales ($366.4 million compared to $322.9 million) and gross margin, partially offset by increases in SG&A and R&D expenses.
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Our cardiovascular operating income for the nine-month period ended September 30, 2025 was $117.6 million, compared to cardiovascular operating income in the corresponding period of 2024 of $113.4 million. The increase in cardiovascular operating income during the nine-month period ended September 30, 2025 compared to the corresponding period of 2024 was primarily a result of increased sales ($1,069.2 million compared to $964.0 million) and gross margin , partially offset by increased SG&A, R&D and contingent consideration expenses .
Endoscopy Operating Income (Loss) . Our endoscopy operating income for the three-month period ended September 30, 2025 was $4.8 million, compared to endoscopy operating loss of $(0.3) million for the corresponding period of 2024. The increase in endoscopy operating income for the three-month period ended September 30, 2025 compared to the corresponding period of 2024 was primarily a result of increased sales and gross margin and decreased SG&A expenses associated with reduced restructuring and integration costs from the acquisition of EGS in July 2024.
Our endoscopy operating income for the nine-month period ended September 30, 2025 was $13.0 million, compared to endoscopy operating income of $5.8 million for the corresponding period of 2024. The increase in endoscopy operating income for the nine-month period ended September 30, 2025 compared to the corresponding period 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 EGS Acquisition.
Other Expense – Net
Our other expense for the three months ended September 30, 2025 and 2024 was $4.1 million and $0.6 million, respectively. Our other expense for the nine-month periods ended September 30, 2025 and 2024 was $10.6 million and $2.3 million, respectively. The increase in other expense for the three and nine-month periods ended September 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 our Amended Fourth A&R Credit Agreement for the three and nine-month periods ended September 30, 2025.
Effective Tax Rate
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.
Net Income
Our net income for the three-month periods ended September 30, 2025 and 2024 was $27.8 million and $28.4 million, respectively. The decrease in our net income for the three-month period ended September 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 nine-month periods ended September 30, 2025 and 2024 was $90.5 million and $92.4 million, respectively. The decrease in our net income for the nine-month period ended September 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.
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LIQUIDITY AND CAPITAL RESOURCES
Capital Commitments, Contractual Obligations and Cash Flows
As of September 30, 2025 and December 31, 2024, our current assets exceeded current liabilities by $755.1 million and $707.4 million, respectively, and we had cash, cash equivalents and restricted cash of $394.6 million and $378.8 million, respectively, of which $72.5 million and $50.6 million, respectively, were held by foreign subsidiaries. We currently believe f uture 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 September 30, 2025, and December 31, 2024, we had cash, cash equivalents and restricted cash of $25.8 million and $18.1 million, respectively, within our subsidiary in China.
Cash flows provided by operating activities . We generated cash from operating activities of $198.9 million and $152.1 million during the nine-month periods ended September 30, 2025 and 2024, respectively. Significant factors affecting operating cash flows during these periods included:
● Net income was $90.5 million and $92.4 million for the nine-month periods ended September 30, 2025 and 2024, respectively.
● Depreciation and amortization was approximately $91.6 million and $74.1 million for the nine-month periods ended September 30, 2025 and 2024, respectively. The increase in depreciation and amortization for the nine-month period ended September 30, 2025 was primarily associated with the amortization of developed technology and other intangible assets acquired from EGS and Cook, and in connection with the Biolife Merger.
● Stock-based compensation expense was $33.6 million and $19.0 million for the nine-month periods ended September 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 used for inventories was approximately $15.1 million and $2.8 million for the nine-month periods ended September 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 provided by (used for) trade payables was $3.4 million and $(6.5) million for the nine-month periods ended September 30, 2025 and 2024, respectively, due primarily to the timing of payments.
Cash flows used in investing activities. We used cash in investing activities of $197.1 million and $154.2 million for the nine-month periods ended September 30, 2025 and 2024, respectively. We used cash for capital expenditures of property and equipment of $57.3 million and $31.7 million in the nine-month periods ended September 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 $14.9 million and $10.2 million for the nine-month periods ended September 30, 2025 and 2024, respectively. Cash outflows invested in acquisitions were $122.8 million for the nine-month period ended September 30, 2025 and were primarily related to the Biolife Merger in May 2025. Cash outflows invested in acquisitions were $110.2 million for the nine-month period ended September 30, 2024 and were primarily related to the EGS Acquisition in July 2024 and the initial payment for the acquisition of assets from SSI and a deferred payment for the acquisition of assets from Restore Endosystems.
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Cash flows provided by (used in) financing activities. Cash provided by (used in) financing activities for the nine-month periods ended September 30, 2025 and 2024 was $10.9 million and $(62.4) million, respectively. For the nine-month period ended September 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 $76.1 million. We had cash proceeds from the issuance of Common Stock of $13.6 million and $13.8 million, net of taxes paid in exchange for common stock, for the nine-month periods ended September 30, 2025 and 2024, respectively, related to the exercise of non-qualified stock options.
As of September 30, 2025, we had outstanding borrowings of $747.5 million and had issued letter of credit guarantees of $3.0 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 September 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 nine-month period ended September 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.
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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 preceded 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 Merit’s actual results to differ from management’s expectations in any forward-looking statements: 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; risks and uncertainties associated with Merit’s proposed acquisition of the C2 CryoBalloon device and related assets from Pentax of America, Inc., the possibility that Merit may not complete the proposed acquisition and, if the acquisition is completed, Merit’s integration of the acquired products and Merit’s ability to achieve projected financial results, product development and other projected benefits of the proposed acquisition; risks and uncertainties associated with Merit’s integration of the Biolife business and operations and its ability to achieve financial results, product development and other anticipated benefits of such acquisition; risks and uncertainties associated with Merit’s integration of products acquired in the Cook Transaction 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, including the ongoing “shutdown” of the United States government; modification or limitation of, or policies and procedures associated with, governmental or private insurance reimbursement policies; 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; government scrutiny and regulation of the medical device industry; 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; litigation and other judicial proceedings affecting Merit; consequences associated with a Corporate Integrity Agreement
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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 Merit’s 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) updated in Part II, Item 1A. “Risk Factors” in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2025, and (iii) updated in Part II, Item 1A. “Risk Factors” in this report.
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.