By Eric Peterson | Apr 03, 2015
South Jordan, Utah
\1,800 in Utah)
South Jordan, Utah
Publicly traded (NASDAQ: MMSI)
Employees: 3,200 (about 1,800 in Utah)
Chairman and CEO Fred Lampropoulos is guiding the $500 million medical device manufacturer to long-term success with innovative products.
Lampropoulos founded Merit Medical Systems in 1987 after helping right the ship as CEO of Utah Medical Products in the 1980s.
"We started out with one simple polycarbonate syringe," he says. "We started out with that one product and today we have 3,500 products." The range is dramatic, from proprietary molecules to medical devices to stents. "We're stick to stitch," says Lampropoulos. "We even have our own semiconductor manufacturer on our campus."
As Merit's catalog has grown, so have sales. Merit took in $509 million in revenue in 2014, the lion's share of it coming from interventional cardiology and radiology products, but about 20 percent stemmed from its OEM division. More than half of the sales went to international markets.
Revenue was up 14 percent from 2013. Notes Lampropoulos: "12.5 percent of that was our core group of products. I would challenge you to find anyone in the medical device industry with $100 million in sales to have that level of growth. They don't exist."
Having a long-term vision from the start has underpinned the growth, says Lampropoulos. "We're a unique breed of cat," he notes. "Our vision was never to be serial entrepreneurs, except within our own company."
It follows that innovation has been equally important to the company's success. "We had more patents issued last year than any time in our history," says Lampropoulos, noting that Merit now holds about 400 patents in all. (Lampropoulos' name is on about half of them.) "We're still innovating."
One recent breakthrough was a new syringe for poly vinyl alcohol (PVA), used to block blood to tumors, that uses a proprietary lubrication in place of troublesome silicone. "It works 100 percent of the time at lower cost and higher convenience," says Lampropoulos. "It's simple things like that, but they make a difference."
Merit has also developed esophageal stents with valves that make it easier for patients to eat and tracheal and bronchial stents that improve care. "These are exciting things that make it better for the patient and easier for the doctor," he adds.
The revenue growth in 2014 comes in the midst of a consolidation of several facilities in metro Salt Lake City onto its 70-acre campus in South Jordan, where the company has added more than 300,000 square feet of space, most of it manufacturing space, in recent years.
The payoff is "cost and efficiency," says Lampropoulos. With multiple facilities, molds were made five miles away from the manufacturing floor. "This way, they're molded, they go to automation, and right down to the floor."
It's all about changing with a changing world. "You adapt and adopt," says Lampropoulos.
"You see startups, you see small businesses, and you see big businesses," he adds. "You don't see very many companies in the middle, like we are."
Challenges: Government regulation. "That's the biggest one for us," says Lampropoulos, calling the Affordable Care Act's 2.3 percent tax on medical devices "egregious."
Opportunities: Exports. International markets have been Merit targets from day one -- "We didn't look at being a Utah company, or a U.S. company," says Lampropoulos -- but they continue to represent areas of dynamic growth for the company.
China, Tunisia, Egypt, Libya, Ukraine, and Russia were among the fastest growing markets in 2014. "They're concerned about creating stability and satisfaction for their citizens, and you do that by providing more services and building more hospitals," says Lampropoulos.
Another opportunity is centered on advancements in medicine, he adds, from new cancer treatments to less invasive surgical techniques. "There are always those kind of opportunities."
Needs: After a $60 million investment in Merit's South Jordan campus, Lampropoulos says, "What we need to do right now is make more money. What we're focused on right now is our shareholders getting a return on our investments."