Merit Medical Systems, Inc. (MMSI) has reported a 17.12 percent rise in profit for the quarter ended Dec. 31, 2016. The company has earned $7.51 million, or $0.17 a share in the quarter, compared with $6.41 million, or $0.14 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $13.80 million, or $0.31 a share compared with $10.77 million or $0.24 a share, a year ago.
Revenue during the quarter grew 13.95 percent to $157.72 million from $138.40 million in the previous year period. Gross margin for the quarter expanded 97 basis points over the previous year period to 44.55 percent. Total expenses were 92.01 percent of quarterly revenues, down from 94.18 percent for the same period last year. This has led to an improvement of 217 basis points in operating margin to 7.99 percent.
Operating income for the quarter was $12.60 million, compared with $8.05 million in the previous year period.
"We are pleased to complete year two of our three-year plan," said Fred P. Lampropoulos, Merit's chairman and chief executive officer. "With the introduction of a number of new products in the beginning of 2017, we look forward to continued growth accompanied by continued expansion of gross margins and profits."
For financial year 2017, Merit Medical Systems, Inc. projects revenue to be in the range of $713 million to $723 million. The company forecasts diluted earnings per share to be in the range of $0.54 to $0.60. The company forecasts diluted earnings per share to be in the range of $1.15 to $1.20 on adjusted basis.
Working capital increases sharply
Merit Medical Systems, Inc. has recorded an increase in the working capital over the last year. It stood at $155.09 million as at Dec. 31, 2016, up 33.59 percent or $39 million from $116.09 million on Dec. 31, 2015. Current ratio was at 2.76 as on Dec. 31, 2016, up from 2.32 on Dec. 31, 2015.
Cash conversion cycle (CCC) has increased to 73 days for the quarter from 66 days for the last year period. Days sales outstanding were almost stable at 25 days for the quarter, when compared with the last year period.
Days inventory outstanding has increased to 63 days for the quarter compared with 62 days for the previous year period. At the same time, days payable outstanding went down to 16 days for the quarter from 22 for the same period last year.
Debt increases substantially
Merit Medical Systems, Inc. has witnessed an increase in total debt over the last one year. It stood at $324.37 million as on Dec. 31, 2016, up 56.25 percent or $116.78 million from $207.59 million on Dec. 31, 2015. Total debt was 34.41 percent of total assets as on Dec. 31, 2016, compared with 26.66 percent on Dec. 31, 2015. Debt to equity ratio was at 0.65 as on Dec. 31, 2016, up from 0.45 as on Dec. 31, 2015. Interest coverage ratio deteriorated to 4.71 for the quarter from 5.54 for the same period last year.
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