MMSI 10-K & 10-Q changes, risk factors and insider trading

We rely on third-party vendors to supply raw materials, component parts, finished products and services in connection with our business. Our reliance on these third-party vendors exposes us to product or service shortages and unanticipated price increases, whether due to inflationary pressure, regulatory changes, tariffs and related measures, geopolitical tensions, the discretion of such vendors or otherwise. For example, we rely on a relatively small number of service providers to sterilize our products prior to sale.products. If any of these service providers goesceases out of business,operations, ceases to provide services to us or fails to comply with quality or regulatory requirements, we may be unable to find a suitable service provider to replace them. This could significantly delay or stop production and adversely affect sales of such products. Additionally, many of our products have components that are manufactured using resins, plastics and other petroleum-based materials which are available from a limited number of suppliers. There is no assurance that crude oil supplies will be uninterrupted or that petroleum-based manufacturing materials will be available for purchase in the future. Tensions in the Middle East and Venezuela and the military conflict in Ukraine may increase the likelihood of supply interruptions and hinder our ability to obtain the materials we need to make our products. Supply disruptions are making it harder for us to find reliable sources forobtain the materials we need, putting upward pressure on our costs and increasing the risk that we may be unable to acquire the materials and services we need to continue to manufacture certain products. If we are unable to manage the challenges associated with supply disruptions or delays, our business, operations or financial condition could be adversely impacted.

The availability and pricecost of thesethe raw materials, parts, productscomponents and services required to operate our business are affected by a variety of factors beyond our control, including existing and potential tariffs,tariffs and related counter-measures, changes in supply and demand, general economic conditions, labor and transportation costs, climate change (including existing and prospective laws and regulations),change, competition, import duties, currency exchange ratesrates, regulatory changes and political uncertainty around the world. DuringIn 2024,particular, we experiencedpurchase significantlylarge elevated commodity and supply chain costs, including the costsquantities of labor,resins, rawwhich materials,are energy,oil-based packagingcomponents materialsused andto othermanufacture inputs necessary for the production and distribution of ourcertain products. ThoseAny elevatedsignificant costs may continueincrease in 2025,resin whichcosts could adversely affectimpact future operating results. In addition to increased resin costs, increases in oil prices could also increase our business,packaging operationsand ortransportation financial condition.costs.

Our ability to recover increased costs may depend upon our ability to raise prices on our products. Due to the highly competitive nature of the healthcare industry and the cost-containment efforts of our customers and third-party payers, we may be unable to pass along cost increases through higher prices. If we are unable to recover these costs through price increases or offset these increases through cost reductions, or we experience terminations or interruptions of our relationships with our suppliers, we could experience lower margins and profitability, and our business, operations or financial condition could be materially harmed.

Changes in economic and geopolitical conditions, domestic and foreign trade policies, monetary policies and other factors beyond our control may adversely impact our business, operations andor financial condition.

Our operations and performance are significantly impacted by global, regional and U.S. economic and geopolitical conditions. The global macroeconomic environment continues to be challenging due to the effects of inflation globally,inflation, instability in global credit markets, uncertainty regarding global central bank monetary policy,policies, instability in the geopolitical environment in many parts of the world, current economic challenges in China,world and other factors. Periods of diplomatic or armed conflict, such as the ongoing conflict in Ukraine, tensions in the Middle East and in Venezuela and China-Taiwan relations, may result in (i) new and rapidlyor evolving sanctions and trade restrictions, which may impair trade with sanctioned individuals and countries, and (ii) negative impacts to regional trade ecosystems among our customers, partners, and us. Non-compliance with sanctions, as well as general ecosystem disruptions, could result in reputational harm, operational delays, monetary fines, lost revenues, increased costs, lost export privileges or criminal sanctions.

Volatile geopolitical turmoil, including popular uprisings, regional conflicts, terrorism and war could result in market instability, which could negatively impact our businessfinancial results.

We are a global company with international operations, and we sell our products in countries throughout the world. Regional conflicts, including the Russianongoing invasionconflict ofin Ukraine, tensions in the Middle East,East and Venezuela, and the risk of increased tensions between China and Taiwan, could limitnegatively or prohibitimpact our ability to sell our products in or source materials from sanctioned countries. In addition, international conflicts could further result in global or regional market instability;instability, insurrections and civil unrest, increased energy costs;costs, and increased risk of cybersecurity attacks, any of which could adversely impact our financial results.

Our products are designed and manufactured in facilities around the world, either by us or third parties. Damage or interruption to our facilities or systems, or those of our suppliers, because of extreme weather conditions, natural disaster, power loss, communications failure, geopolitical disruption, labor strikes, riots,civil unrest, cyber-attack, public health crises, unauthorized entry or other events could significantly disrupt our operations, the operations of suppliers or critical infrastructure. These events may delay or prevent product manufacturing and shipment during the time required to repair, rebuild or replace the damaged facilities or systems. Climate change may increase both the frequency and severity of natural disasters and, consequently, risks to our operations and growth. In the event of any such delay or interruption of our operations, facilities or systems, or those of our suppliers, we may experience a loss of market share and harm to our reputation, which could adversely affect our business, operations or financial condition.

Consolidation in the healthcare industry, group purchasing organizations and public cost-containment measures have led to demands for price concessions,concessions with respect to our products, which may reduce our revenues and harm our ability to sell our products at prices necessary to support our current business strategies.

Healthcare costs have risen significantly over the past decade, which has led to numerous cost containment measures and other healthcare reforms by legislators, regulators and third-party payers. Cost reform has triggered a consolidation trend in the healthcare industry to aggregate purchasing power, which has created more requests for pricing concessions and is expected to continue in the future.continue. Additionally, many of our customers belong to group purchasing organizations or integrated delivery networks that useaggregate their market power to consolidate purchasing decisions for these hospitals and healthcare providers.customers. These customers are often able to obtain lower prices and more favorable terms because of the potential sales volume they represent,terms, which has led to lower revenues and required us to take on additional liability.

The global trend toward limiting growth of healthcare costs has also impacted us in international markets, including China, our largest international market in terms of revenue. China has implemented the VBP policy, which has the specific aim of decreasing prices for medical devices. China’s VBP policy decreased our sales prices in China in 2022, 2023 and 2024, whichhas negatively impacted our revenues.product pricing and revenue in China since 2022. Due to uncertainties with the application of the VBP tender process, we are unable to reliably predictforecast the impact of the VBP policy on our China revenues in 2025.2026. However, we expect that the VBP tender process in China will continue to have a negativenegatively impact on theour revenue we are able to generate infrom China in 2025,2026, and there can be no assurance that the VBP policy will not have a materially adverse effect on our business, operations or financial condition.

Additionally, theThe medical device industry is also subject to rapid technological change and frequent product introductions. Our ability to compete successfully is dependent, in part, upon our response to changes in technology and upon our efforts to develop and market new products which achieve significant market acceptance. Companies with substantially greater resources than us are actively engaged in research and development of new methods, treatments, drugs, and procedures that could limit the market for our products and eventually make our products obsolete. Furthermore, our existing competitors and new market entrants may respond more quickly to or integrate new or emerging technologies such as artificial intelligence (“AI”) and machine learning in their product offerings, which could also limit the market for our products. A reduction in demand for our products could have a material adverse effect on our business, operations or financial condition.

We seek to supplement our internal growth through strategic acquisitions and transactions. We regularly evaluate potential acquisitions and transactions, certain of which may be significant. We have incurred, and will likely continue to incur, significant expenses in connection with evaluating, negotiating and consummating various acquisition and other transactions.

Our integration of acquired businesses requires considerable efforts, which may include corporate restructuring and the coordination of information technologies, research and development, sales and marketing, operations, regulatory, supply chain, manufacturing, quality systems and finance. These efforts result in additional expenses and require significant management time. Some of the factors that could affect the success of our acquisitions include the effectiveness of our due diligence process, our ability to execute our business plan for the acquired companies,operations, the strength of the acquired technology, results of clinical trials, regulatory approvals and reimbursement levels of the acquired products and related procedures, the performance of critical transition services, our ability to adequately fund acquired research and development projects and retain key employees and our ability to achieve synergies with the acquired businesses. Foreign acquisitions involve unique risks, including those related to integration of operations across different geographies, cultures and languages, currency risks and risks associated with the economic, political, legal and regulatory environment in specific countries. In addition, we have and may in the future acquire less than full ownership interests in other businesses, which involve unique challenges for effective collaboration. Further, other parties that hold remaining ownership interests in such businesses may have economic or business goals that are inconsistent with our goals or the goals of such businesses. Our failure to manageeffectively theseintegrate challenges successfully and coordinate the growth of suchacquired businesses or other investments could have an adverse impact on our business and our future growth. In addition, we cannot be certain that the businesses we acquire or invest in will become profitable or remain so, and if our acquisitions or investments are not successful, we may record related asset impairment charges in the future or experience other negative consequences on our operating results.

In addition, we may not realize competitive advantages, synergies or other benefits anticipated in connection with any such acquisition or other transaction. If we do not adequately identify and value targets for, or manage issues related to, acquisitions and other transactions, such transactions may not produce the anticipated benefits and could have an adverse effect on our business, operations or financial condition.

Failure to realize the benefits expected from recent acquisitions could adversely affect our business, operating results andor financial condition.

We have completed a series of strategic acquisitions and transactions in recent years, some of which have been significant, such as the acquisitions of assets or businesses from each of the following companies: AngioDynamics, Inc. on June 8, 2023; EndoGastric Solutions, Inc. on July 1, 2024; and Cook Medical Holdings, LLC on November 1, 2024; Biolife, L.L.C. on May 20, 2025; and Pentax of America, Inc. on November 3, 2025 (collectively, the “Recent Acquisitions”). The benefits we expect from the Recent Acquisitions are based on projections and assumptions about the performance of the acquired assets under our ownership and control,ownership, which may not materialize as expected or which may prove to be inaccurate.expected. Our business, operating results andor financial condition could be adversely affected if we are unable to realize the anticipated benefits, such as the anticipated cost and revenue synergies,benefits from the Recent Acquisitions on a timely basis, if at all. Achieving the benefits of the Recent Acquisitions will depend, in part, on our ability to integrate the acquired businesses and operations successfully and efficiently with our business. The challenges involved in these integrations include the following:

If we do not successfully manage these issues and the other challenges inherent in integrating an acquired business, we may not achieve the anticipated benefits of the Recent Acquisitions on our anticipated timeframe, if at all, and our business, operations andor financial condition could be materially adversely affected.

If we fail to achieve anticipatedprojected benefits from business acquisitions or strategic investments or identify underperforming products, we may dispose of the acquired or underperforming assets, which could adversely affect our results of operations.

We may acquire businesses or assets which do not produce the benefits projected at the time of acquisition or we may identify legacy operations and products that are underperforming, do not fit with our longer-term business strategy or that become subject to unforeseen operating difficulties. We may seek to divest these underperforming businesses, operations or products. The resulting divestiture may be financially disadvantageous to us, which could adversely affect our results of operations. If we cannot divest an underperforming business, operation or asset on acceptable terms, we may voluntarily cease operations related to that business, operation or asset. In such event, we may be required to take impairment charges or write-downs in connection with acquisitions and divestitures, which could adversely affect our results of operations.

An important component of our business strategy is to increase revenue growth through innovation and new product development. The development of new products and enhancement of existing products requires significant investment in research and development, clinical trials and regulatory approvals. The results of ourOur product development efforts may be affected by a number of factors, including our ability to anticipate customer needs, innovate and develop new products, efficiently conduct and complete clinical trials, obtain regulatory approvals and reimbursement approvals in the U.S. and abroad, efficiently manufacture products in a cost-effective manner,products, obtain and enforce intellectual property rights and gain and maintain market approval of our products. There can be no assurance that any product we have recently launched (such as the Wrapsody Device),launched, are preparing for launch, are now developing or that we may seek to develop in the future, will achieve technological feasibility, obtain regulatory approvalor orreimbursement approval, gain market acceptance.acceptance or command prices consistent with expectations or profitability. If we are unable to develop and launch new products and enhanced products, our ability to maintain or expand our market position in the markets in which we participate may be materially adversely impacted.

Additionally, the development or enhancement of certain products or groups of products, for example the Wrapsody Device, may have a disproportionate impact on our business, financial condition andor results of operations. We have devoted and currently devote significant research and development resources to certain products and groups of products. In light of the significant investment of financial and personnel resources to the development of these products, failure to meet development timelines or growth projections, poor clinical outcomes, increasing regulatory requirements, failure to obtain reimbursement approvals, launch delays and inability to effectively scale manufacturing and achieve targeted margins with respect to any of these products or groups of products in particular may adversely impact our business, operations andor financial condition.

Our reliance on third-party distributors in many countries could negatively impact the commercialization of our products in those countries.products.

In many countries, we rely on third-party distributors to market, distribute and sell our products, which exposes us to multiple risks. These distributors are often the main point of contact for the healthcare professionals and healthcare organization customers who buy and use our products. If we are unable to enter into or maintain distribution agreements with these third-party distributors on acceptable terms, we may not be able to successfully commercialize our products in certain countries. The sales of our products in these countries may be at risk if third-party distributors become insolvent, cease selling our products or choose to sell competing products. In addition, although our contract terms require our distributors to comply with applicable laws regarding the sale of our products, including anti-competition, anti-corruption, anti-money laundering and sanctions laws, we may not be able to ensure proper compliance. Our reliance on third-party distributors exposes us to various risks, including commercial, legal, compliance and reputational risks, the realization of any of which could harm our results of operations and business.

If we are unable to effectively execute our leadership succession plans and attract, develop and retain key employees, our business andor results of operations could be harmed.

Our ability to compete effectively depends on our ability to attract, develop and retain executives and key employees. The market for experienced and talented employees, particularly for persons with certain technical competencies, is highly competitive. Inflationary pressures, labor demand and shortages and other macroeconomic factors have increased and could further increase the cost of labor, particularly in Mexico, and could harm our ability to recruit, hire and retain talented employees. Further, ifIf we are unable to maintain (i) competitive and equitable compensation and benefit programs, including incentive programs which reward financial and operational performance, and (ii) an inclusive work culture that aligns our diverse workforce with our mission and values, our ability to recruit, hire, develop, engage, motivate and retain talented and experienced employees could be negatively affected, which could adversely impact our operatingbusiness or results andof financial condition.operation.

Before we can introduce a new device or a new claim for an existing medical device in the U.S., we must generally obtain clearance or approval from the FDA, unless an exemption from premarket review or an alternative clearance or approval procedure applies. The process of obtaining and maintaining FDA clearances and approvals for our medical devices could require a significant period of time, require the expenditure of substantial resources, involve rigorous clinical testing and post-market surveillance, require changes to our products or result in limitations on the indicated uses of our products.

Further, the FDA may change its clearance and approval policies, adopt additional regulations or revise existing regulations, or take other actions which may prevent or delay approval or clearance of our products or impact our ability to modify our currently cleared products on a timely basis. Additionally, the recent reductions in the FDA workforce imposed by the administration of President Trump could cause delays in the product approval or clearance process of the FDA. Delays in receipt of, or failure to obtain, regulatory clearances or approvals for any product enhancements or new products we develop could result in delayed or no realization of revenue from such product enhancements or new products and in substantial additional costs, which could decrease our profitability.

In addition, we are required to continue to comply with applicable FDA and other regulatory requirements once we have obtained clearance or approval for a product, including good manufacturing practices, timely adverse event reporting, completion of required post-market studies, timely annual and other periodic reports, submission of significant changesreports and other post-market requirements. We cannot provide assurance that we will comply with all of these requirements or successfully maintain the clearances or approvals we have received or may receive in the future. The loss of previously received clearances or approvals, or the failure to comply with existing or future regulatory requirements, could have a material adverse effect on our business.

As a part of the regulatory process of obtaining regulatory clearance or approval for new products and new indications for existing products, we conduct and participate in clinical trials with a variety of study designs and patient populations. We are developing and expect to continue to develop products that are increasingly therapeutic in nature. Pursuit of our business strategy for therapeutic products will likely increase our need for, and dependance on, clinical trials. Such clinical trials are inherently uncertain and there can be no assurance that these trials will be sufficiently enrolled or completed in a timely or cost-effective manner or result in a commercially viable product or indication. Unfavorable, unexpected or inconsistent clinical data from existing or future clinical trials conducted by us, by our competitors or by third parties, or the FDA's, foreign regulatory authorities’ or the market's perception of this clinical data, may adversely impact our ability to obtain and maintain product clearances and approvals, our position in, and share of, the markets in which we participate and our business, financial condition, results of operations or future prospects.

The medical device industry is subject to extensive scrutiny and regulation by governmental and other authorities, and we are currently operating under a Corporate Integrity Agreement.authorities. If governmental authorities determine that we have violated laws, regulationslaws or our Corporate Integrity Agreement,regulations, our company or our employees may be subject to various penalties, including civil or criminal penalties.

Our products and business activities are subject to rigorous regulation by the FDA and other federal, state and foreign governmental authorities. These authorities and domestic and foreign legislators continue to scrutinize the medical device industry. In recent years, the U.S. Congress and multiple federal agencies, as well as foreign counterparts, have issued subpoenas and other requests for information to medical device manufacturers.

We anticipate that governmentgovernmental authorities will continue to scrutinize our industry closely, and that additional regulation by governmentgovernmental authorities may increase compliance costs, exposure to litigation and other adverse effects on our operations. If we fail to comply with applicable regulatory requirements, including the terms of the CIA, we may be subjected to a wide variety of sanctions, including warning letters that require corrective action, injunctions, product recalls, suspension of product manufacturing, revocation of approvals, import or export prohibitions, exclusion from participation in government healthcare programs, civil fines and/or criminal penalties, which in turn may have a negative impact on our business, results of operations or financial condition.

Our operations are subject to various state and federal laws targeting fraud and abuse in the healthcare industry, including the U.S. federal Anti-Kickback Statute, which prohibit any person from knowingly and willfully offering, paying, soliciting or receiving remuneration, directly or indirectly, to induce or reward either the referral of an individual, or the furnishing or arranging for an item or service, for which payment may be made under federal healthcare programs, such as the Medicare and Medicaid programs. Violations of these laws are punishable by criminal or civil sanctions, including substantial fines, imprisonment and exclusion from participation in healthcare programs such as Medicare and Medicaid,programs, any of which could harm our business or negatively impact our financial results. Allegations of such violations could lead to expensive and time-consuming investigations by government authorities and result in settlement costs and additional restrictions, like the CIA discussed above under Item 1. “Business - Regulation - Corporate Integrity Agreement.”restrictions.

We sell our products to hospitals and other healthcare providers around the world that typically receive reimbursement for the services provided to patients, which incorporate the use of our products,patients from third-party payers such as government programs (e.g., Medicare and Medicaid in the U.S.) and private insurance programs. The ability of our customers to obtain adequate reimbursement for the health care procedures that use our products, such that the cost of our products is covered, is critical to our business. Limits on reimbursement imposed by such third-party payers may adversely affect our customers,customers’ such as hospitals, physicians and other healthcare providers,decisions to purchase our products, which could adversely affect our business and results of operations.

Third-party payers, whether foreign, domestic, governmental or commercial, are developing increasingly sophisticated methods of controlling healthcare costs. In general, a third-party payer covers a medical procedure only when the plan administrator is satisfied that the product or procedure is reasonable and necessary to the patient’s treatment; however, for certain payers (such as foreign governments and some commercial insurers) the cost-effectiveness of the treatment may also be a condition. In addition, in the U.S., no uniform policy of coverage and reimbursement for procedures using our products exists among third-party payers. Therefore, coverage and reimbursement for procedures using our products can differ significantly from payer to payer and, in some cases, jurisdiction to jurisdiction. In addition, payers continuallyregularly review new and existing technologies for possible coverage and can, without notice, deny, change or reverse coverage decisions or alter prior authorization requirements for new or existing products and procedures. If we are not successful in reversing non-coverage or unfavorable coverage policies, or if third-party payers that currently cover or reimburse certain procedures involving the use of our products reverse, change or limit their coverage of such procedures in the future, our business and results of operation could be adversely impacted.

The U.S. and many other countries in which we operate have adopted laws and regulations protecting certain data, including medical and personal data (including HIPAA and the HITECH Act), and requiring data holders and controllers to implement administrative, logical and technical controls and procedures in order to protect the privacy of such data. Individual states have also begun to enactenacted data privacy laws giving consumers the right to demand certain information and actions from companies who collect personal information. A significant number of countries where we operate have enacted privacy or data protection laws, ruleslaws and regulations, many of which restrict outbound data transfers and have extraterritorial scope,transfers, creating significant compliance challenges as we seek to maintain our global reach, with significant penalties for non-compliance. These domestic and international laws and regulations have been, and may continue to be, inconsistent with each other, requiring different approaches in different jurisdictions. In addition, the interpretation and application of medicalprivacy and personal data protection laws and regulations in the U.S., Europe, ChinaAsia and elsewhere are often uncertain and in flux. Further, we have incurred, and will likely continue to incur, significant expense in connection with our efforts to comply with those applicable laws and regulations. It is possible that thesethose laws and regulations may be interpreted and applied in a manner that is inconsistent with our privacy and data protection practices, may result in significant liability, fines or orders requiring that we change our data practices, which could, in turn, have a materially adverse effect onharm our business.

The design, manufacture and marketing of medical devices involvesinvolve various risks. Frequently, our products are used in connection with invasive procedures, surgical and intensive care settings with seriously ill patients and in other medical contexts that entail an inherent risk of product liability claims. If medical personnel or their patients suffer injury or death in connection with the use of our products, whether as a result of a failure of our products to function as designed, an inappropriate design, inadequate disclosure of product-related risks or information, improper use, or for any other reason, we could be subject to lawsuits seeking significant compensatory and punitive damages, safety alerts or product recalls. We have previously faced, and currently face, claims by patients claiming injuries from our products. To date, these claims have not had a material adverse effect on our business, operations or financial condition. The outcome of this type of personal injury litigation is difficult to assess or quantify. We maintain product liability insurance; however, there is no assurance that this coverage will be sufficient to satisfy any claim made against us. Moreover, any product liability claim brought against us could result in significant costs, divert our management’s attention from other business matters or operations, increase our product liability insurance rates, or prevent us from securing insurance coverage in the future.

We are exposed to the risk that our employees, independent contractors, consultants, manufacturers and distributors may engage in fraudulent conductmisconduct or other illegal activity. Misconduct by these parties could include intentional, reckless or negligent conduct, or unauthorized activities that violate the laws and regulations of the FDA and other federal, state and international authorities. We have adopted a code of business conduct and ethics, and a global anti-corruption policy, but it is not always possible to identify and deter all misconduct, and the precautions we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits. If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business, including the imposition of significant civil, criminal and administrative penalties.

We are routinely a party, including as a defendantdefendant, to or otherwise involved in legal proceedings, claims or other legal matters. Although we endeavor to mitigate our legal risk, we are potentially subject to a wide variety of claims in the conduct of our business, including claims relating to products liability, labor matters, securities laws, regulatory compliance and breach of contract. Legal proceedings can be complex, expensive, time-consuming and disruptive to our operations, with the final outcome depending on a number of variables, many of which are beyond our control. The ultimate resolution and potential financial impact of any such proceedings on us are uncertain. If a legal proceeding is resolved against us, it could result in significant compensatory damages or injunctive relief that could materially and adversely affect our financial condition and results of operations.

Risks associated with climate change are subject to increasing societal, regulatory and political focus in the United States and globally. Shifts in weather patterns caused by climate change are projected to increase the frequency, severity or duration of certain adverse weather conditions and natural disasters, such as hurricanes, tornadoes, earthquakes, wildfires, droughts, extreme temperaturesdroughts or flooding, which could cause significant business and supply chain interruptions, damage to our products and facilities as well as the infrastructure of hospitals, medical care facilities and other customers, reduced workforce availability, increased costs of raw materials and components and increased liabilities, compared to our historical experience with such events.liabilities. In addition, increased public concern over climate change could result in new legal or regulatory requirements designed to mitigate the effects of climate change. Such developments could result in increased compliance costs and adverse impacts on raw material sourcing, manufacturing operations and the distribution of our products, which could adversely affect our operationsbusiness and operating results.operations.

Our ability to remain competitive is dependent, in part, upon our ability to protect our intellectual property rights and prevent other companies from infringing those rights. We seek to protect our intellectual property through a combination of confidentiality and license agreements, maintaining trade secrets, and through registrations under patent, trademark, and copyright laws. However, these measures afford only limited protection and may be challenged, invalidated, or circumvented by third parties. Additionally, these measures may not prevent competitors from duplicating our products or gaining access to our proprietary information and technology. Third parties may copy all or portions of our products or otherwise use our intellectual property without authorization, and we may not be able to prevent the unauthorized disclosure or use of our intellectual property by consultants, vendors and former and current employees. Despite our efforts to restrict such unauthorized disclosure or use through nondisclosure agreements and other contractual restrictions, we may not be able to enforce these contractual provisions or we may incur substantial costs enforcing our legal rights.

Third parties may also develop similar or superior technology independently or by designing around our patents. In addition, the laws of some foreign countries do not offer the same level of protection for our intellectual property as the laws of the U.S. Further,laws. noNo assurances can be given that any patent application we have filed or may file will result in a patent being issued, or that any existing or future patents will afford adequate or meaningful protection against competitors or against similar technologies. All of our patents and copyrights will eventually expire and some of our patents, including patents protecting significant elements of our technology, will expire within the next several years.

Filing, prosecuting and defending our intellectual property in countries throughout the world may be impractical and prohibitively expensive. Litigation may be necessary in the future to enforce our intellectual property rights, protect our trade secrets or to determine the validity and scope of proprietary rights claimed by others. Any such litigation could be expensive, time consumingtime-consuming and divert management’s attention from our business. Litigation also puts our patents at risk of being invalidated or interpreted narrowly. Moreover, the legal systems of certain countries, particularly certain developing countries, do not favor the aggressive enforcement of patents and other intellectual property protections, which makes it difficult to stop infringement. We may not prevail in any lawsuits that we initiate, and the damages or other remedies awarded, if any, may not be commercially valuable.

For the year ended December 31, 2024,2025, we reported sales of $1.357$1.516 billion, up $99.1$159.4 million or 7.9%,11.8%, compared to 20232024 sales of $1.257$1.357 billion. Our revenue results for the year ended December 31, 20242025 were driven primarily by demand in the U.S. and favorable international sales trends, particularly in Europe, the Middle East and Africa (“EMEA”) and in the “Rest of World” (“ROW”) regions.region.

OnIn February 28, 2024, we introduced our “Continued Growth initiatives” Program with muti-year financial targets for the three-year period ending December 31, 2026, which reflects our commitment to better-position Merit for long-term, sustainable growth and enhanced profitability.

Endoscopy Sales. Our endoscopy sales for the year ended December 31, 20242025 were $54.8$72.9 million, up 48.8%,33.0%, when compared to sales for the year ended December 31, 20232024 of $36.8$54.8 million. Sales for the year ended December 31, 20242025 were favorably affected by increased sales of our recently-acquired EsophyX® Z+ Device.device acquired from Endogastric Solutions, Inc. in July 2024.

United States Sales: U.S. sales for the year ended December 31, 20242025 were $800.8$909.5 million, or 59.0%60.0% of net sales, up 10.2%13.6% when compared to 2023.2024. The increase in our domestic sales in 20242025 was driven primarily by our U.S. direct, OEMendoscopy, and endoscopyOEM businesses.

International Sales. International sales for the year ended December 31, 20242025 were $555.7$606.4 million, or 41.0%40.0% of net sales, up 4.8%9.1% when compared to 2023.2024. The increase in our international sales during 20242025 was primarily a result of higher sales in EMEA, which increased $11.2$37.9 million or 4.8%,15.3%, higher Rest of World (“ROW”) sales which increased $8.9$7.0 million or 18.1%,12.2%, and higher sales in our Asia Pacific region, which increased $5.3$5.8 million or 2.1%,2.3%, compared to the corresponding period of 2023.2024.

Our international sales are subject to foreign currency exchange rate fluctuations between the natural currency of a foreign country and the U.S. Dollar. Foreign currency exchange rate fluctuations, calculated by using the applicable average foreign exchange rates for the prior year decreasedincreased sales (0.6)%0.3% for the year ended December 31, 20242025 compared to 2023.2024.

Our gross profit as a percentage of sales was 48.7%, 47.4%, 46.4%, and 45.1%46.4% for the years ended December 31, 2024,2025, 20232024 and 2022,2023, respectively. The increase in gross profit as a percentage of sales for 2024,2025, as compared to 2023,2024, was primarily due to increased sales combined with favorable changes in standard costspricing and product mix, partially offset by higher intangible amortization expense as a percentage of sales associated with acquisitions.acquisitions and unfavorable manufacturing variances.

Selling, General and Administrative Expenses. Our selling, general and administrative (“SG&A”) expenses as a percentage of sales were 29.5%,30.0%, 29.7%29.5% and 29.8%29.7% for the years ended December 31, 2024,2025, 20232024 and 2022,2023, respectively. SG&A expenses increased $26.1$55.5 million, or 7.0%,13.9%, for the year ended December 31, 20242025 compared to 2023.2024. The increase in SG&A expenses for the year ended December 31, 20242025 compared to the year ended December 31, 20232024 was primarily relateddue to increased labor-related costs associated with an increase in headcountlabor-related andcosts higherincluding (i) variable compensation linkedassociated towith companyperformance-based performance,bonus programs, commissions associated with sales growth, as well as an increase of stock-based compensationin expense associated with newboth performance and non-performance based equity grantsawards; and variability(ii) headcount additions to support investment in ourthe stock price,business and angrowth from acquisitions, including those in connection with the Cook Transaction and the Biolife Merger. In addition, higher marketing, advertising, and travel expenditures contributed to the year‑over‑year increase in travel related costs associated with our sales and marketing activities, partially offset by a decrease in consulting costs primarily associated with our Foundations for Growth Program which ended in 2023.2025.

Research and Development Expenses. Our research and development (“R&D”) expenses as a percentage of sales were 6.4%, 6.6%6.4% and 6.6% for the years ended December 31 2025, 2024, 2023, and 2022,2023, respectively. R&D expenses increased by $4.7$9.9 million or 5.7%11.3% to $87.5$97.4 million for the year ended December 31, 2024,2025, compared to $82.7$87.5 million in 2023.2024. The increase in R&D expenses for the year ended December 31, 20242025 compared to the year ended December 31, 20232024 was primarily related to increased labor-related costs consistentincluding variable compensation associated with an increase in headcountbonus and anequity increaseaward materialsprograms and scrapincreased utilizedconsulting inservices R&D,and partiallyclinical offset by lower regulatory costs related to Medical Device Rgulation in the E.U.trials.

Cardiovascular Operating Income. Our cardiovascular operating income for the year ended December 31, 20242025 was $150.2$166.1 million, compared to cardiovascular operating income of $114.4$150.2 million for the year ended December 31, 2023.2024. This increase in cardiovascular operating income was primarily related to higherincreased sales and gross profit, decreased acquired in-process research and development charges, and decreased contingent consideration expense ($0.4 million in 2024 compared to $1.7 million in 2023), partially offset by higherincreased SG&A and R&D expenses.

Endoscopy Operating Income. Our endoscopy operating income for the year ended December 31, 20242025 was $5.5$18.6 million, compared to operating income of $9.5$5.5 million for the year ended December 31, 2023.2024. This decreaseincrease in endoscopy operating income relative to 20232024 was primarily due to higherincreased SG&A expense associated with the acquisitionsales and integrationgross of operations acquired from EGS and higher R&D expenses, partially offset by higher sales.profit.

Our other expense for the years ended December 31, 2024,2025, 2024 and 2023 andwas 2022$13.8 wasmillion, $5.7 million, $11.9 million, and $4.9$11.9 million, respectively. The decreaseincrease in other expense for 20242025 compared to 20232024 was principally the result of ana increasedecrease in interest income associated with anddecreased increasedaverage cash and cash equivalents andduring the period, partially offset by reduced interest expense associated with borrowings under the Amended Fourth A&R Credit Agreement, partially offset by interest expense associated with outstanding convertible debt.Agreement.

Our provision for income taxes for the years ended December 31, 2024,2025, 20232024 and 20222023 was a tax expense of $29.6$42.4 million, $17.7$29.6 million and $8.1$17.7 million, respectively, which resulted in an effective income tax rate of 24.8%, 19.8%, 15.8%, and 9.8%,15.8%, respectively. The increase in the effective income tax rate for 20242025 compared to 20232024 was primarily the result of decreased benefit from discrete items such as stock-basedshare-based compensation and foreigncontingent liabilities and increased permanent tax creditdifferences utilization.in various jurisdictions and items related to the budget reconciliation package enacted during the period and retroactive to the beginning of the year.

Our net income for the years ended December 31, 2024,2025, 2024 and 2023 andwas 2022$128.5 wasmillion, $120.4 million, $94.4 million, and $74.5$94.4 million, respectively. The increase in net income for 2024,2025, when compared to 2023,2024, was primarily related to higher sales,sales and higher gross margin as a percentage of sales, decreased contingent consideration expense ($0.4 million in 2024 compared to $1.7 million in 2023), decreased acquired in-process research and development expense ($0 in 2024 compared to $1.6 million in 2023) and decreased other expensessales; partially offset by higher SG&A, R&D, other expense and income tax expense.

At December 31, 20242025 and 2023,2024, we had cash, cash equivalents and restricted cash of $378.8$448.5 million and $589.1$378.8 million respectively, of which $50.6$66.0 million and $48.7$50.6 million, respectively, were held by foreign subsidiaries. We do not consider our foreign earnings to be permanently reinvested. As of December 31, 20242025 and 2023,2024, approximately $2.1 million and $2.1 million respectively, of our cash and cash equivalents represents restricted cash for the payment of certain import and other taxes for our subsidiary in China. 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 December 31, 20242025 and 2023, we had2024, cash and cash equivalents, including restricted cash, of $18.1 million and $17.6 million, respectively, held by our subsidiary in China.China was $20.0 million and $18.1 million, respectively.

Cash flows used in investing activities. We used cash in investing activities of $368.7$247.4 million, $175.3$368.7 million, and $57.4$175.3 million for the years ended December 31, 2024,2025, 20232024 and 2022,2023, respectively. We invested in capital expenditures for property and equipment of $35.1$81.7 million, $34.3$35.1 million, and $45.0$34.3 million for the years ended December 31, 2024,2025, 20232024 and 2022,2023, respectively. Capital expenditures in each period were primarily related to investment in property and equipment to support development and production of our products.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 $55$80 to $60$100 million in 20252026 for property and equipment.

Cash outflows invested in acquisitions for the year ended December 31, 2025 were $144.8 million and otherwere equityprimarily investmentsrelated to payments required by our merger agreement with Biolife LLC ($120.0 million) and our asset purchase agreement with Pentax of America, Inc. ($19 million). Cash outlfows invested in acquisitions for the year ended December 31, 2024 were $320.2 million and were primarily related to payments required by our asset purchase agreements with Cook Medical Holdings LLC ($210.0 million), Endogastric Solutions, Inc. ($105.0 million) and Scholten Surgical Instruments, Inc. ($3.0 million). Cash outflows invested in acquisitions for the year ended December 31, 2023 were $134.5 million and were primarily related to payments required by our asset purchase agreements with AngioDynamics, Inc. ($100 million), Bluegrass Vascular Technologies, Inc. ($32.7 million) and ART ($1.5 million). Cash outflows invested in acquisitions for the year ended December 31, 2022 were $6.9 million and were primarily related to our $3.0 million upfront payment in our purchase of Restore Endosystems LLC and our $2.5 million payment in our purchase of BioTrace Medical, Inc.

Cash flows provided by (used in) financing activities. Cash provided by (used in) provided by financing activities for the years ended December 31, 2024,2025, 2024 and 2023 andwas 2022$16.0 wasmillion, $(60.0) million, and $559.3 million, andrespectively. $(60.3)In million,2025 respectively.we had cash proceeds from the issuance of common stock of $28.2 million. In 2024 we decreased our net borrowings under our Amended Fourth A&R Credit Agreement by $99.1 million and had cash proceeds from the issuance of common stock of $40.9 million. In 2023 we issued convertible debt of $747.5 million, paid $66.5 million for the purchase of capped call options, and decreased our net borrowings under our Amended Fourth A&R Credit Agreement by $99.1 million. In 2022 we decreased our net borrowings under our Third Amended Credit Agreement by $44.9 million and paid contingent consideration of $32.9 million, which is classified as a financing activity, principally related to our acquisitions of Cianna Medical Inc. (“Cianna Medical”) and Vascular Insights LLC (“Vascular Insights”).

As of December 31, 2024,2025, we had outstanding borrowings of $747.5 million and issued letter of credit guarantees of $2.9$2.8 million, with additional available borrowings of approximately $697 million under the Amended Fourth A&R Credit Agreement, based on the leverage ratio required pursuant to the Amended Fourth A&R Credit Agreement. Our interest rate as of December 31, 2025 and 2024 was a fixed rate of 3.0% on our Convertible Notes. Our interest rate as of December 31, 2023 was a fixed rate of 3.0% on our Convertible Notes, a fixed rate of 3.39% on $75 million as a result of an interest rate swap, and a variable floating rate of 7.21%% on $24.1 million. The foregoing fixed rates are exclusive of potential future changes in the applicable margin associated with our variable rate debt under the Amended Fourth A&R Credit Agreement. See Note 8 Debt and Note 9 Derivatives to our consolidated financial statements set forth in Item 8 of this report for additional details regarding the Amended Fourth A&R Credit Agreement, Convertible Notes,Agreement and our interestConvertible rate swap.Notes.

We test our goodwill balances for impairment annually as of July 1, or whenever impairment indicators arise. When impairment indicators are identified, we may elect to perform an optional qualitative assessment to determine whether it is more likely than not that the fair value of our reporting units has fallen below their carrying value. DuringOur ourelection annualto perform a qualitative impairment testassessment performedfor asan individual reporting unit in a given year is influenced by a number of Julyfactors, 1,including, but not limited to, the size of the reporting unit's goodwill, the significance of the excess of the reporting unit's estimated fair value over carrying value at the last quantitative assessment date, the amount of time since the last quantitative analysis was performed, and other performance and market indicators. During a qualitative assessment, if we utilizeddetermine fourthat reportingit unitsis innot evaluatingmore likely than not that the implied fair value of the goodwill foris impairmentless usingthan its carrying amount, no further testing is necessary. If we do not perform a qualitative assesment, or we determine that it is more likely than not that the implied fair value of the goodwill is less than its carrying amount, we perform a quantitative assessment, which uses a combination of a guideline public company market-based approach and a discounted cash flow income-based approach. The quantitative assessment considers whether the carrying amount of a reporting unit exceeds its fair value, in which case an impairment charge is recorded to the extent the reporting unit’s carrying value exceeds its fair value. This analysis requires significant judgment, including estimation of the amount, timing and duration of future cash flows, which is based on internal forecasts, and a determination of a discount rate based on our weighted average cost of capital. During our annual impairment test of goodwill balances in 2024, which was completedperformed during the third quarter of 2024,2025, we evaluated each of our four reporting units using a qualitative assessment. As a result of the assessment, we determined that it was not more likely than not that the implied fair value ofwas eachless reportingthan unit with goodwill exceeded theits carrying amount byfor aeach significantof amount.our four reporting units, and no detailed quantitative assessment was necessary.

InThe Februaryongoing 2026,conflict among the United StatesStates, Israel and Israel launched coordinated military strikes against Iran, which retaliated with missile attacks across the region. The ongoing conflictIran and any further escalation, including additional military actions, retaliatory measures, sanctions, disruptions to trade or transportation routes, cyberattacks, or other governmental or market responses, has and could continue to lead to (i) significant disruption of global energy supplies and increases in global energy prices, (ii) heightened inflationary pressures on our input costs, such as resins and other petroleum-based materials, (iii) adverse effects upon global supply chains, energy markets, commodity prices, currency exchange rates, interest rates, financial markets and overall macroeconomic conditions, and (iv) adverse customer spending patterns in markets in which we operate. The conflict remains dynamic. The full impact of the conflict is highly uncertain and protraction or escalation of hostilities may cause the risks noted above to increase or may cause other negative impacts on our business, any of which could adversely affect our business, financial condition or results of operations. We are unable to predict the extent or nature of these impacts at this time.

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 2025 Annual Report on Form 10-K.10-K and in Part II, Item 1A “Risk Factors” in this report and in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2026.

For the three-month period ended MarchJune 31,30, 2026, we reported sales of $381.9$418.8 million, an increase of $26.5$36.4 million or 7%10% compared to sales for the three-month period ended MarchJune 31,30, 2025 of $355.4$382.5 million. For the six-month period ended June 30, 2026, we reported sales of $800.7 million, an increase of $62.9 million or 9% compared to sales for the six-month period ended June 30, 2025 of $737.8 million. Foreign currency fluctuations (net of hedging) increased our net sales by $7.9$3.0 million and $10.9 million for the three-monththree periodand six-month periods ended MarchJune 31,30, 2026, respectively, assuming applicable foreign exchange rates in effect during the comparable prior-year periods.

Gross profit as a percentage of sales remainedincreased atto 48.4%51.4% for the three-month period ended MarchJune 31,30, 2026 compared to 48.4%48.2% for the three-month period ended MarchJune 31,30, 2025. Gross profit as a percentage of sales increased to 50.0% for the six-month period ended June 30, 2026 compared to 48.3% for the six-month period ended June 30, 2025.

Net income for the three-month period ended MarchJune 31,30, 2026 was $41.0$38.8 million, or $0.68$0.65 per share, compared to net income of $30.1$32.6 million, or $0.49$0.54 per share, for the three-month period ended MarchJune 31,30, 2025. Net income for the six-month period ended June 30, 2026 was $79.8 million, or $1.33 per share, compared to net income of $62.7 million, or $1.03 per share, for the six-month period ended June 30, 2025.

Sales for the three-month period ended MarchJune 31,30, 2026 increased by 7%,9.5%, or $26.5$36.4 million, compared to the corresponding period in 2025. Sales for the six-month period ended June 30, 2026 increased by 8.5%, or $62.9 million, compared to the corresponding period in 2025. Listed below are the sales by product category and platform for the three-monththree and six-month periods ended MarchJune 31,30, 2026 and 2025 (in thousands, other than percentage changes):

Foundational Sales. Our foundational sales for the three-month period ended MarchJune 31,30, 2026 were $255.5$281.0 million, up 6.3%7.1% when compared to the corresponding period of 2025 of $240.4$262.4 million. Sales for the three-month period ended MarchJune 31,30, 2026 were favorably affected by increased sales within ourthe accessfollowing platform, including sales of our StatSeal and WoundSeal products acquired from Biolife, and our vascular intervention platforms, partially offset by decreased sales within our OEM and procedural solutions platforms.platforms:

Therapeutic Sales. Our therapeuticfoundational sales for the three-monthsix-month period ended MarchJune 31,30, 2026 were $126.4$536.4 million, up 9.9%6.7% when compared to sales in the corresponding period of 2025 of $115.0$502.8 million. Sales for the three-monthsix-month period ended MarchJune 31,30, 2026 compared to the corresponding period in 2025 were favorably affected by increased sales within our cardiac therapies, endoscopy, vascular intervention and oncology platforms, with increases in our endoscopy sales partially attributable to the acquisitionfollowing of the C2 Cryoballoon from Pentax. Such increases were partially offset by decreased sales within our OEM and renal therapies platforms.platforms:

Listed below are sales by geography for the three-monththree and six-month periods ended MarchJune 31,30, 2026 and 2025 (in thousands, other than percentage changes):

Domestic Sales. Domestic sales for the three-month period ended MarchJune 31,30, 2026 were $226.5$252.1 million, or 59.3%60.2% of net sales, up 6.1%11.0% when compared to the corresponding period of 2025. Domestic sales for the six-month period ended June 30, 2026 were $478.6 million, or 59.8% of net sales, up 8.6% when compared to the corresponding period of 2025.

International Sales. International sales for the three-month period ended MarchJune 31,30, 2026 were $155.4$166.8 million, or 40.7%39.8% of net sales, up 9.6%7.3% when compared to the corresponding period in 2025 of $141.8$155.4 million. International sales for the six-month period ended June 30, 2026 were $322.2 million, or 40.2% of net sales, up 8.4% when compared to the corresponding period in 2025 of $297.2 million. The increase in our international sales for the three-monththree periodand six-month periods ended MarchJune 31,30, 2026, compared to the corresponding periodperiods of 2025 included increased sales in each of our Europe, the Middle East and Africa, Rest of World and Asia Pacific regions.

Selling, General and Administrative Expense. Selling, general and administrative (“SG&A”) expenses increased $10.7$16.1 million, or 10.0%,14.3%, for the three-month period ended MarchJune 31,30, 2026 compared to the corresponding period of 2025. As a percentage of sales, SG&A expenses were 31.0%30.9% for the three-month period ended MarchJune 31,30, 2026, compared to 30.2%29.6% for the corresponding period of 2025. SG&A expenses increased $26.9 million, or 12.2%, for the six-month period ended June 30, 2026 compared to the corresponding period of 2025. As a percentage of sales, SG&A expenses were 30.9% for the six-month period ended June 30, 2026, compared to 29.9% for the corresponding period of 2025. For the three-monththree periodand six-month periods ended MarchJune 31,30, 2026, SG&A expenses increased compared to the corresponding periodperiods of 2025, primarily due to an increase in labor-related costs including (i) commissions associated with sales growth andgrowth, (ii) headcount additions to support investment in the business and growth(iii) fromstock-based acquisitions, including those in connection with the Biolife Merger.compensation. Additional drivers of the increase were costs associated with the pending View Point AcquisitionMerger totaling $5.6 million and company conferences. Such increases were partially offset by a decrease in contract termination costs incurred during 2025 as a result of the Biolife Merger.

Research and Development Expenses. Research and development (“R&D”) expenses for the three-month period ended MarchJune 31,30, 2026 were $22.6$25.4 million, up 0.6%,4.2%, when compared to R&D expenses in the corresponding period of 2025 of $22.5$24.4 million. R&D expenses for the six-month period ended June 30, 2026 were $48.0 million, up 2.5%, when compared to R&D expenses in the corresponding period of 2025 of $46.8 million. For the three-monththree periodand six-month periods ended MarchJune 31,30, 2026, R&D expenses did not materially changeincreased compared to the corresponding periodperiods of 2025.2025 primarily due to annual merit-based salary increases effective in the second quarter of 2026.

Contingent Consideration (Benefit) Expense. For the three-monththree periodand six-month periods ended MarchJune 31,30, 2026, we recognized contingent consideration expense (benefit) from changes in the estimated fair value of our contingent consideration obligations stemming from our previously disclosed business acquisitions of $0.1 million and $(0.20.0) million, respectively, compared to contingent consideration expense of $1.0$0.1 million and $1.2 million, respectively, for the three-monththree periodand six-month periods ended MarchJune 31,30, 2025. 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.

Our operating income for the three-month period ended MarchJune 31,30, 2026 was $44.2$60.4 million, compared to operating income in the corresponding period of 2025 of $41.0$46.9 million. The increase in operating income during the three-month period ended MarchJune 31,30, 2026 compared to the corresponding period of 2025 was primarily a result of increased sales ($381.9and milliongross compared to $355.4 million),margin, partially offset by an increase in SG&A expense.

Our other (income) expense for the three months ended MarchJune 31,30, 2026 and 2025 was $(9.4)$9.1 million and $3.1$3.5 million, respectively. The change in other (income) expense for the three-month period ended MarchJune 31,30, 2026 compared to the corresponding periodsperiod of 2025 was primarily related to a gainone-time charge of approximately $12.5$5.1 million associatedfor additional interest incurred pursuant to Merit's obligation to remove restrictive legends with therespect sale ofto the DualCap®Convertible product line to Health Line in February 2026.Notes.

Our provision for income taxes for the three-month periods ended MarchJune 31,30, 2026 and 2025 was a tax expense of $12.6$12.5 million and $7.8$10.8 million, respectively, which resulted in an effective tax rate of 23.4%24.4% and 20.6%,24.9%, respectively. Our provision for income taxes for the six-month periods ended June 30, 2026 and 2025 was a tax expense of $25.1 million and $18.6 million, respectively, which resulted in an effective tax rate of 23.9% and 22.9%, respectively. The increasedecrease in the effective income tax rate for the three-month period ended MarchJune 31,30, 2026, when compared to the prior-year period, was primarily due to increased benefit from discrete items such as deferred compensation. The increase in the effective income tax rate for the six-month period ended June 30, 2026, when compared to the prior-year period, was primarily due to decreased benefit from discrete items such as share-based compensation and the tax impacts of recent acquisition and divestiture activity. The increase in income tax expense for the three-monththree periodand six-month periods ended MarchJune 31,30, 2026, when compared to the prior-year period,periods, was primarily due to increased pre-tax book income and rate impact items previously listed. Our effective tax rate differs from the U.S. statutory rate primarily due to the impact of NCTI and Subpart F inclusions, state income taxes, foreign taxes, other nondeductible permanent items and discrete items (such as share-based compensation).

Our net income for the three-month periods ended MarchJune 31,30, 2026 and 2025 was $41.0$38.8 million and $30.1$32.6 million, respectively. The increase in our net income for the three-month period ended MarchJune 31,30, 2026 was the result of several principal factors, including increased sales and othergross income,margin, partially offset by increased SG&A expensesexpenses, other expense and income tax expense.

As of MarchJune 31,30, 2026 and December 31, 2025, our current assets exceeded current liabilities by $884.9$847.3 million and $800.4 million, respectively, and we had cash, cash equivalents and restricted cash of $490.2$450.9 million and $448.5 million, respectively, of which $65.1$65.5 million and $66.0 million, respectively, were held by foreign subsidiaries. We currently believe future 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, earnings of our foreign subsidiaries are not considered to be permanently reinvested. 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 MarchJune 31,30, 2026, and December 31, 2025, we had cash, cash equivalents and restricted cash of $14.1$19.7 million and $20.0 million, respectively, within our subsidiary in China.

Cash flows provided by operating activities. We generated cash from operating activities of $40.7$110.0 million and $40.6$123.9 million during the three-monthsix-month periods ended MarchJune 31,30, 2026 and 2025, respectively. Significant factors affecting operating cash flows during these periods included:

Cash flows provided by (used in) investing activities. Cash provided by (used in) in investing activities was $7.7$102.4 million and $(29.6)$173.0 million for the three-monthsix-month periods ended MarchJune 31,30, 2026 and 2025, respectively. We used cash for capital expenditures of property and equipment of $16.0$33.3 million and $21.1$34.8 million in the three-monthsix-month periods ended MarchJune 31,30, 2026 and 2025, respectively. Capital expenditures in each period were primarily related to investments in property and equipment to support development and production of our products, and include 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 $80 to $100 million in 2026 for property and equipment.

Cash outflows for the acquisition of equity investments and issuance of notes receivable were $7.1$14.6 million for the three-monthsix-month period ended MarchJune 31,30, 2025. Cash outflows invested in acquisitions were $1.0$93.0 million and $122.6 million for each of the three-monthsix-month periods ended MarchJune 31,30, 2026 and 2025 and were primarily related to the firstacquisitions of View Point in 2026 and secondBiolife deferredin payments from our asset purchase agreement with Scholten Surgical Instruments, Inc.2025. Cash inflows from divestitures were $25.5 million for the three monthsix-month period ended MarchJune 31,30, 2026 and were related to the sale of the DualCap® product line to Health Line.

Cash flows (used in) provided by financing activities. Cash (used in) provided by financing activities for the three-monthsix-month periods ended MarchJune 31,30, 2026 and 2025 was $(6.35.3) million and $7.0$11.3 million, respectively. For the three-monthsix-month periodperiods ended MarchJune 31,30, 2026,2026 and 2025, we had cash used in financing activities of $2.1$3.0 million and $2.6 million, respectively, primarily attributable to the payment of milestone-based contingencies associated with the C2 Acquisition.Acquisition in 2026 and Brightwater Medical, Inc. in 2025. We had cash (outflows) inflows from the issuance of Common Stock of $(4.12.4) million and $7.0$13.9 million, net of taxes paid in exchange for common stock, for the three-monthsix-month periods ended MarchJune 31,30, 2026 and 2025, respectively, related to the exercise of non-qualified stock options and release of time and performance-based stock awards.

As of MarchJune 31,30, 2026, we had outstanding borrowings of $747.5 million and had issued letter of credit guarantees of $2.9 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 MarchJune 31,30, 2026 and December 31, 2025 was a fixed rate of 3.0% on our Convertible Notes.

Our financial results are affected by the selection and application of accounting policies and methods. In the three-monthsix-month period ended MarchJune 31,30, 2026 there were no changes to the application of critical accounting policies previously disclosed in Part II, Item 7 of our 2025 Annual Report on Form 10-K.

The following are some of the important risks and uncertainties that could cause Merit’s actual results to differ from our management’s expectations in any forward-looking statements: risks and uncertainties associated with Merit’s acquisition of View Point and the OneMark Tissue Localization System and related technology; risks and uncertainties associated with Merit’s integration of the View Point business, assets and operations into its operations and its ability to achieve anticipated financial results, product development and other anticipated benefits of the acquisition; uncertainties as to whether Merit will achieve revenue or other financial performance consistent with its forecasts projected for the View Point acquisitionMerger; risks and uncertainties associated with Merit’s executive succession and leadership transition; risks and uncertainties regarding trade policies or related actions implemented by the United States or other countries, including existing, proposed, prospective or invalidated tariffs, duties or other measures; risks and uncertainties associated with Merit’s integration of businesses or assets acquired from third parties, including View Point in April 2026 and the business and assets acquired in connection with the C2 AcquisitonAcquisition in November 2025,2025 and the Biolife Merger in May 2025, and the businesses and assets acquired from Cook Medical Holdings LLC in November 2024 and from EndoGastric Solutions, Inc. in July 2024, and Merit’s ability to achieve the anticipated operating and financial results, product development and other anticipated benefits of such acquisitions; effects of the Convertible Notes on Merit’s net income and earnings per share performance; restrictions and limitations set forth in the Convertible Notes and Indenture, which could affect Merit’s ability to operate its business as well as its liquidity; disruptions in Merit’s supply chain, manufacturing or sterilization processes; U.S. and global political, economic, competitive, reimbursement and regulatory conditions; 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; prospective financial obligations or other uncertainties associated with Merit’s divestiture of its DualCap® anti-microbial cap product line in February 2026; 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 judiciallegal proceedings affecting Merit; risks and possible effects of any 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 that may affect our business, operations or financial condition, see Part I, Item 1A. “Risk Factors” in the 2025 Annual Report on Form 10-K filed with the SEC which we updated in Part II, Item 1A. “Risk Factors” in this report.