Merit Medical Systems, Inc. (MMSI) Cash Flow Statement

The conversion ratio sits above 1.0 in most periods, which suggests reported earnings are not being materially inflated by accruals in aggregate. However, the swing from 0.99x in 2026Q1 to 2.70x in 2025Q3 points more to working capital timing than to a stable structural conversion rate. Investors should weight the multi-quarter average more heavily than any single period.

The 27.4% peak in 2025Q2 coincided with a positive CapEx figure and a sharp working capital release, which appears to have flattered that quarter's free cash flow. Excluding such outliers, a mid-teens margin seems more representative of underlying generation. The 2026Q1 trough of 6.3% warrants monitoring to determine whether it reflects timing or a softer trend.

The magnitude of quarterly working capital movements is large relative to net income, suggesting receivables, inventory, or payables are subject to meaningful timing shifts. Repeated outflows in early-year quarters may indicate seasonal build-ups tied to distributor or hospital ordering patterns. Investors should monitor whether inventory build-up is temporary or reflects slower sell-through.

Capital intensity appears moderate, consistent with a manufacturing model centered on disposables rather than capital-heavy equipment. The low 1.2% reading in 2024Q4 contrasts with higher 2025 levels, which may reflect project timing rather than a durable shift. D&A near $34M per quarter exceeds recent CapEx in several periods, which could indicate that asset replacement is being deferred.