Fred Lampropoulos – Chairman and Chief Executive Officer Anne-Marie Wright – Vice President-Corporate Communications Kent Stanger – Chief Financial Officer, Secretary and Treasurer.

Tom Gunderson – Piper Jaffray Jayson Bedford – Raymond James James Sidoti – Sidoti & Company.

Good day ladies and gentlemen, welcome to MMSI’s First Quarter 2015 Conference Call. At this time I would like to hand things over to Mr. Fred Lampropoulos, Chairman and Chief Executive Officer. Please go ahead, sir..

Thank you very much and good afternoon, ladies and gentlemen. This is Fred Lampropoulos and we are broadcasting from our corporate headquarters in South Jordan, Utah, and we thank you and appreciate your attendance. I’ll ask Anne Wright if she will please read our disclaimer.

Anne-Marie?.

Thank you, Fred. During our discussion today reference may be made to projections, anticipated events or other information which is not truly historical. Please be aware that statements made in this call which are truly historical may be considered forward-looking statements.

We caution you that all forward-looking statements involve risks, unanticipated events and uncertainties that could cause our actual results to differ materially from those anticipated in such statements.

Many of these risks are discussed in our Annual Report on Form 10-K and other reports and filings with the Securities Exchange Commission available on our website. Any forward-looking statements made in this call, are made as of today's date and we do not assume obligations to update such statements.

Although, Merit’s financial statements are prepared in accordance with accounting principles which are generally accepted in United States or GAAP, Merit’s management believes that certain non-GAAP financial measures provide investors with useful information regarding the underlying business trends and performance of Merit’s ongoing operations and can be useful for period-over-period comparisons of such operations.

The table included in our release and discussed on this call, sets forth supplemental financial data and corresponding reconciliations of GAAP financial statements. Investors should consider these non-GAAP measures in addition to, not as a substitute for financial reporting measures prepared in accordance with GAAP.

These non-GAAP financial measures exclude some items that affect net income. Finally, these calculations may not be comparable with similarly titled measures of other companies..

Thank you very much, Anne-Marie and once again good afternoon ladies and gentlemen. We are again grateful for your attendance and let’s kind of start going through our report and talk about our business. As you can see from the report, our sales were up 9% for the quarter.

If we were to adjust that for the FX effect, we would be talking about 11% over last year’s numbers. You recall that we had talked about revenues being in the 6% to 8% range in terms of growth.

So we are very pleased, especially when we look at the first quarter and we have things like our sales meetings, we have presidents club, you always get kind of a slow ramp up, because of the just of the first of the year, a number of issues that come in to place.

And so we saw specifically that business started a little slow, but as we started moving through the quarter, it ramped up about very, very nicely. So we’re excited and we’re pleased and we hope you’re with those numbers.

As we move through the year, we have a number of new products and one I’d like to talk about that kind of goals on the revenue side here from moment, is to talk about the Prelude Snap. This is a very big deal for Merit.

We as you know purchased Thomas Medical, now almost three years ago, and although we were very excited about the product in terms of the Classic Sheath, this is Merit’s meritization [ph] product called Prelude Snap.

We’ve done a number of trials, when I say trials this was the product being used by physicians in Europe and without, I think, exception. Everybody that used this in over 40 or so trials, the physician stated that this was a better product than anything they’re going to ever use.

So this product now is CE mark, it is now FDA approved and we will be rolling it out over the next 30 days or so. And we think that this is going to help us to recapture business we may have lost. Just as reminder that the target is [ph] achieved with 20 year old technology.

But the other thing that I’m – we’ve been more excited about is the fact that we are able to take an acquisition, able to take and put a folks that’s come into the Merit family, get them involved that in R&D project and I have this success and you’re going to see some very, very exciting number from this product as we move forward.

And they are also now starting on a couple of other products, to go along with our only line. So what I’m trying to say is that we have a number of new products and our revenue line, I think, is fine and we expect that the business as we move through the year – excuse me – will accelerate. So we’re very excited about that.

Kent, I know, Kent can hardly contain himself here. And that’s because everything that a CFO wants to see, he is seeing and Kent I’m just going to let you out of the gate here, unless you talk about all the things that I know that you’re very excited about sharing to that..

Well thank you. Yes, I mean one of the things that you see here our income is up considerably GAAP-wise is up 80% over a year ago and on a non-GAAP which is where most of our analysts are got us up 47%. So we had exceeded, I think, extra case and so internally from the streak.

What that helps produce is first an EBITDA increase of up to $81.4 million now in the trailing 12 months and it has been very gratifying to watch our leverage ratio decline dramatically, a year ago was $3.46 million just two quarters ago was $3.24.million but we’ve dropped now down to $2.62 million.

We have also been able to reduce inventory about $3.5 million in the quarter and when you combine that in the total of cash flow from operation is a record $19.3 million and gave us free cash flow of nearly $10million.

We were able to pay the debt down by almost $`12 million, $11.6 million and help reduce that balance now down was at the end quarter end was that was a little under to $213 million. So we’d reduced at about $26 million in the last two quarters and changed our ratio, I said so. So the cash flow is raised, the EBITDA rates also great.

The earnings have really improved, one of the real areas we been getting leverage in this statement as you noticed is 240 bips out of our SG&A expenses. They stayed flat really pretty close to flat over the last year and from the last quarter even went up a little bit.

But we even with loading that to front end expenses of first year for healthcare and other things. So we’re excited about the leverage we are seeing in that by the discipline we put into our expenditures. And the ability we have, we’ve also reduced our interest expense significantly.

So when you reduce the balance and you reduce our interest rates, our interest rates will go down again and about May 25 will go down under another 25 bips. So we dropped our interest cost from $2.6 million a year ago quarter to $1.2 million in this year. Again that’s really helping both cash flow and earnings..

Yes, and thank you, Kent. A couple of other things that I don’t know how important this is, but as you know and as many of our analysts have said it’s the real key in watching the company is to take a look at the discipline. So we were just going through a number of metrics last evening.

An interesting one popped up that I think will be of some interest to you. And that is a year ago in this quarter, in the SG&A area worldwide, we had 628 employees. This is a point of interest, a year later and substantial growth, we have 629.

Again just one data point, but I think it speaks to the issues the things that we’re doing to hold things in line and to operate our business and consequently we’re going to get some leverage there. Let me move on to an initiative that you may raising your questions and tell me talk about that and that’s the gross margin side.

So, you will see that our gross margins are lower than of course they were for the fourth quarter. And you will also recall that we discussed this. We discussed that we have higher operating expenses coming into the first quarter. We have – when I say that I'm talking about insurance and all of those things that start up at higher rates.

And then we have the lag of production. Kent, why don’t you just kind of go through the variance model because I think that’s something that’s also of interest, and I think we’ll have to support what we should see as we go forward on the gross margin and our expectations there from this point..

We had an unusual startup for us because of our – calendar hit we didn’t begin production until the 5th of January which is a late start.

It was part of the reason we also and produced less inventory, reducing our inventory, which helped – make it less inventory applications or overhead applications to inventory, but what was also interesting was the timing of it.

So most of – our biggest variance was $1.6 million in January and it takes about four months of our inventory experience to roll those that costs out into the cost of sales or in other words the departure of the inventory to shipping into the product.

And so what’s happened as we’ve got – had a lot of loaded up variances early in the quarter that are mostly through now, at least January, so the big one is all set three-fourth the way done in half of February. So as I look forward, I mean encouraged that our variance models will improve and our gross margins will improve.

But for this quarter, we’re explaining now it was weighted heavily. So, we were under applying in our overheads. It’s a short-term thing, which happened every year, but it was heavier this year than we’ve seen in the past..

Yes, and again I think you’ve recalled that we had this conversation and when we went through our year-end and our three year plan. So I think Kent did allude to and that is – the results that we’re talking to you today are in fact ahead of our own internal expectations.

And yet we’re not prepared of course after one quarter to change anything and to move anything in any direction at this point, but again I think we’re very encouraged by the performance and how the business is doing. In terms of the areas, U.S.

sales force I thought is of interest and particularly when we start talking about and consider the international market. So the U.S. sales force for the first quarter was up 9.2%. And I'm very pleased with the efforts there. You’ll also notice that in our report, we’ve had of course the change in management.

When I say a change, a retirement, Marty Stephens has retired and Monroe Mae who has been with the company for 14 years has assumed those responsibilities, as well as Kevin’s service. So these are seasoned veterans, they were responsible for this growth.

They have been responsible for the growth in the past and of course our international markets and particularly in China, we really have had and continued to see substantial growth in China. We are operating now somewhere around 27% or so overall growth in China.

So that continues to be a strong point, particularly in our [indiscernible] we are really starting to see our quarters here notables, spheres really start to move along there. In fact we were just talking the other day it seems like each month we are hitting new record of sales in those areas.

So Joe Right in his international team I think are doing fine. Our European and team they are doing fine, although affected by of course the FX issue. It is interesting to note and this so, I hope you find of interest that our EU direct was only up about 3%.

But adjusted for FX it would be over 20% or above 20%and yet our EU dealers which are paid in U.S. dollars are around 22%. And again for the first quarter and taking into consideration these adjustments that we just discussed, we are very, very pleased with that. So I’m satisfied, with what we have.

In terms of our product pipeline, as I mentioned we have the SNAP, a new line of products are in our [indiscernible] will be out in mid year. And I think we will have another very exciting product and that is our Corvocet Biopsy system. Now some of you’ve got to see this biopsy system when you were here.

And when we had our Investor Day, we continue to get rave reviews on the product, physicians who are waiting for that product to come to the marketplace. So our product pipeline is full and a lot of other types of opportunities are presenting themselves.

We are having no less and four different discussions with international companies that want their products distributed worldwide and these things appear, but they are going to fit very nicely. So whether be it from goals or our internal developments, where I think there is no doubt that we have plenty of fuel to feed out everything going.

As we look at Mexico, I’d like to like bring you update on Mexico. In fact early next week we will be meeting by end Tijuana with our production staff and some of you might recall that we are able to strike a deal, where essentially the people that have worked for the contract manufacturer are essentially all going to come over to Merit.

And we are going to be meeting with them, taking them to the new facility and we are excited about that opportunity to meet our new associates. We still are looking for a timeframe of about July – happen to slowly up and running in the first quarter, there was about a charge of about $350,000 in the first quarter and that all hit the SG&A line.

We will have some additional expense in the second quarter of about $400,000 that will hit the SG&A expense line. And then as we roll into production and it should transfer over by the way very quickly. The reason for that is we have the same engineering staff, we’re just a mile or two away from the all facility and we have the same employees.

So we think is that all plays out, you’ll start to see the advantages that we see of having that particular facility. We’ve also now to almost consolidate all of our West Jordan facility in the Salt Lake City and into Pearland, Texas.

So these plans that we talked about in our investor meeting and during our overview for this year and the next three years are all playing out as planned.

So everything is inline and everything is moving forward and these things are going to have a dramatic effect on the company in a very, very short period of time and despite these trends associated with that, we still we are able to I think meet expectations by about $0.03 on the earnings claim on the non-GAAP basis and I think revenues by about $4 million give or take.

So I think it is our important issues for the company and getting that part and lot of work being done, transferring but essentially without any hiccups at all at this point and I actually very carefully I probably shouldn’t say this, but I don’t expect any.

These guys are season to doing this, we’ve got a great staff head up by Neil Peterson and Dave [ph] staff here and they have just expert to doing this stuff. So we expect this to be predictable and our expectation is it will be on-time and on budget. So all in all we’re very excited about that.

So in summary, I think a great quarter and when I say that again, remember that we tried to line this up to have you understand what we see in the business in terms of the FX the start up time some of these additional expenses and I think you can see that our discipline is certainly presenting itself and the results of that.

Lets you can give anything actually like to add financially or otherwise..

Again I just really so that we’ve got a great momentum we need it, because our earnings expectations are increasing as we go through the share but I think we’re ahead of schedule and that we have that the basis of the infrastructure tested in for many years that I think we can continue to leverage for some time..

Okay, all right. Guys, there it is pretty straight out. And again we hope that you’re placed or at least we try to explain how the business is doing and I think you can see from our feelings here that we are doing out what we said we were do and a bit more. So I think what we’re – do – let’s go and turn time over to you to operator let the game begin.

Let’s open up..

[Operator Instructions] Our first is time going to Tom Gunderson, Piper Jaffray..

Hi, good afternoon, Fred, Kent and everyone..

Hi Tom..

I guess I’d like up where you left off on the prepared remarks and that is gross margin and Mexico the move to Mexico Kent or maybe Fred, can you give us a sense of timing of impact to the income statement? What I’m looking for as there is always these transition periods and you’ve got this well planned out should go through without a hick up, but I’m just wondering when we flip that and do you take a step back on gross margin or does it just through the quarter transitions seamlessly..

Tom it’s a good question. So the business won’t be at a 100% capacity in resolving all of the expense initially.

So what we’re doing is we’re transferring the existing business there at about a 150 employees in a number of products and the engineering staff that we have that are merged up that are already on the ground and have been for a number of years operating of San Diego.

So that part will come on line, but we’ve had the higher staff, so there is going to be a period of which it’s where effective gross margins and so the absorption in place and that will take place over about at 18 month period as far as about the time, we feel that up and we expect it over that 18 month, which we put in our three year plan, we will have by that time about 450 or so employees.

So we can probably get a little bit more granular, but I think, in our three year plan that we gave that those expenses, although there on an annual basis are in there.

So now you’ve known immediately flip to Switch, but I do believe that because the people have been building the product because the equipment there is our equipment, because it’s our engineering staff and because of our transport and setup team at Salt Lake we’ll be on it, that part should go very, very, very smoothly.

And then what we’re going is we have a number of products that we’ll be moving from to a number of facilities.

So a part of this plan so that that it could be understood it can be understood is not just Mexico, but part of it is shutting down the West Jordan plant bring some stuff here, bringing some products to – and bringing some products to Mexico. So it’s a consolidation that involves a lot of these plants.

And again at the end of day, it will lower our costs, but there is on the Mexico part it’s not going to be capacity immediately. We’re not just going to fill that.

Kent, do you want to add to that any color?.

Just so there that you’ve got the right idea there is a transition and part of the building would just continue to be in SG&A expense and then it will evolve as we move more products there and then it will convert over and across the sales.

And as you move it, you won’t immediately see the difference, but then once it settles in and you can’t reduce the overheads where it lasts from and move them or transfer those two. Mexico you start to have reduced costs particularly at labor, but that’s not the whole story. The overhead actually costs less because it’s mostly people too.

So as you can build that infrastructure, so it’s kind of gradual phase the same thing over the next at least a year [indiscernible] 18 months, but it’s going to come along. So in 2015, we try to be conservative on our gross margins and it was a good thing. We’re even a little below that.

But it’s a thing that where the moment is going to pick up internally without Mexico. Now as Mexico coming on, it’s more next year thing as far the benefits of it. It will be transiting from the SG&A costs into production cost, but once those production costs are being realized, the benefits also begin the lower cost per unit.

And we’ve seen when moved it even to a contract manufacturer to give you a color to that, it’s been from 25% to 40% drop in costs even with the layer of profit for the contract manufacturer and we’ve got to pick up our own overheads which somewhat offsets that. But you’re going to see that gets leveraged and particularly in the on coming years..

And Tom, I'm sorry to labor the point, but – this point where I talked about involves a number of facilities. You recall that we have talked about – we brought online the Pearland, Texas facilities, it was about $300,000 a month of additional expense, you had a new building and new equipment and amortization and so on and so forth.

That particular facility is can be also on schedule with that $300,000 a month. Hopefully, we’ll start to be absorbed by the end of the year. So we hope to buy and think about that. That $3.6 million of expense negative variance that will come out of that.

And that facility and the work they are doing down there we’ve transferred our Stent business there. We’re transferring products from Melbourne there, we are transferring products from West Jordan and from Salt Lake City that plant is coming up and absorbing and maybe slightly ahead of schedule.

So there is a whole bunch of pieces to this plan and they are all on schedule and performing as expected or better. Long commentary, but.

No that is – that is what I wanted was a long commentary, so I appreciate that.

The next question purely financial, you did a good job in Q1 with your record cash flow and then paying down debt of almost $12 million is that – how would you look at debt reduction through the rest of the year?.

We have planned for $20 million to $25 million; we are probably ahead of that again a little bit. And we’ve got to watch our inventory levels for customer service and so forth, because that maybe we can do a little better, I don’t want to promise that at this point, though..

Yes, well I am going to have to jump in there, we paid down $12 million and we are talking about $25 million for the year. I think that is probably little conservative. I think we will pay down substantially more than that, hopefully. And I think we will also be it our – I think we talked about $20 million to $30 million worth of free cash flow.

Well in the first quarter I think the number was right about $10 million to $12 million. So now we are talking about set of $25 million to $30 million, closer to $40 million. So now again that is projecting out for the year, well I think that we are probably going to do better in all of those categories.

And of course as Kent pointed out, in terms of interest expense and some of these other things and covenants, remember last year this time everybody was talking about covenants and how we [indiscernible] clearly those are not issues at this point.

And I think we’re doing on the financial side, kind of we are ahead of where we thought we would be and I think we will be at the end of the year as well..

Got it, thank guys, that is just from me..

Yes thanks Tom..

Our next question today will come from Jayson Bedford, Raymond James..

Good afternoon, thanks for taking the questions and nice job on the quarter..

Thanks..

Thank you Jayson..

You’re welcome first question, just on the gross margin you sighted overhead and I think you explained that pretty well. But you also mentioned in the release discounts internationally.

So I guess the question is which of those two factors had the bigger impact in the quarter?.

So let me address the issue of discounts and explain that, so it’s actually, as you know there are many locations that are affected by currency that Merck participates in.

And those are places like Brazil, but particularly Russia and other places and we just said we’d rather than reduced prices, what we do is we kept our pricing at the same level and then we made concessions. I think it will monitor about 30 basis points to 40 basis points of gross margin in the first quarter.

Now interestingly enough that kind of process over at somewhere around 50 and 50 rubles to the dollar and it’s sitting here at 50.85 today. So I can’t predict where the rubles going to go but once it gets to 50 the discounts are off.

So that’s part of – another part I think go to the issue of and we talked about which is the slow start up, we have an extra day in the quarter in January as an example I think Ken explain the variances that we saw in January and February have most of them has gone now and now we have positive variances in March and we continue to extract that we’ll see those positive variances moving forward through the balance of the year.

So that is kind of that phenomenon and most of it comes from really that start up more so that it does the discounts, Jayson it’s a substantially more….

Its 34 bps is the cost of the discount progressive that we have so it’s we had a lot much bigger effect almost 2% out of the variance issues. And then we had some help from the euro expenses being lower as we talked about happening us in that natural hedge thing we got going so sales were down to slower cost as we predicted.

So we had that helping as an even decided that we couldn’t overcome the overhead variances that I already explained..

Does that answer your question Jayson?.

It does – it does, it sounds like the price….

Okay..

That the concessions were quite low?.

Yes. I mean they were not big, and again remember this is something we expected, so this is what we were trying to explain as we were setting up the quarter and making sure we understood that in our January, February call..

All right, and you gave some guidance around gross margin back at the Analyst Day is that still, are you still comfortable with that range?.

Yes. Everything that we had on our range is still intact that still what we expect the business to do and so yes, I mean everything, nothing has changed in terms of those projections although as you can see that we’re slightly ahead of it in the first quarter and usually as you know from our history our business accelerates.

So when we have this great product pipeline and so, I’m trying to temper my enthusiasm a bit, I mean, I’ve always found it’s kind of better off to do that, but I mean we got some great stuff coming, we’ve got this great biopsy, the Corvocet and Snap and the One-Step I think that we have so many nice things with such great margins and then we have this consolidation going on there I think we’re managing very nicely.

So I know it would be less than I mean I’m optimistic I’m pleased, I expressed to my staff before we came online, they are doing a good job. But we’ve got to kind of hold to the wheel here, just keep going I better share a couple of more things too. In the quarter, well, there were some expenses for some severance.

But in the quarter, we accrued for staff bonuses and that’s anticipation that we’re going to meet or exceed our numbers. And so that was like $450,000 to $500,000. We haven’t had the luxury of doing in the past. We use it at the end of year we catch it up, but these expanses are already in these first numbers and we still exceeded the numbers.

So I'm – Kent?.

Well, I just want to acknowledge that we have some work to do on the gross margins and the hardest one to project and present. And – but I do think that the worst is behind us as far as the way that historically how heavy January was. So I believe we can catch up I guess is the bottom line to you – to give your answer, Jayson..

Okay. A couple other questions just on FX, if I recall, your earnings actually benefit from a stronger U.S. dollar.

Does that gets reflected more in the cost of goods or the OpEx line?.

It’s both. I mean [indiscernible] because I don’t remember for – it’s almost $2.2 million in the offline and one-seven is operating and that includes R&D, so it’s both..

And then Malvern sales were kind of the only real weak spot….

Yes..

…it looks like in the revenue line.

It sounds like Snap will help that out, but is there any other explanation for – we’ll look to be a little softness in the quarter?.

Yes. Yes, there is. So if you recall that that business is basically an OEM business. And so it can be affected by an order that’s either received or couldn’t be delivered or so on and so forth. So again from our point of view, it’s not a big deal. I should point out that I think the ramp rate on our direct sales of plastic sheet was about $10 million.

And this is not for quarter, but I mean our ramp rate overall for the year on a direct basis. The Snap is, as you recall, seeing here Jayson when you are here from Investor Day is a very, very big deal. And it has the capability of almost doubling that business, which is $25 million. It has that potential.

And we expect to get out and get after it and we’re going to get after it straight way. It’s a big deal and we are very excited about it. It was – just I can’t tell you, we did a lot of our trials in Germany and in the Netherlands and Scandinavia [indiscernible] those guys, they’re tough.

And every comment and every place we went that it meets or exceeds all of our – almost all 90% of them exceeds the competition and they couldn’t wait to get their hands on it. So our guys we have products spiral on the shell. The product is regulatory approved. It is signed off. I believe the numbers are in the system.

And – but we want – we’ll do some training and it’s an extraordinary product. And then I’ll teach you a little bit by saying we’ve got a little something up of our sleeve for later on this year in the same product line. So we’ve got a little something else to go with it. And then we have two more projects that have been started up back in Melbourne.

So Melbourne is becoming Mertized. And I just can’t tell you how pleased I am with the work they’ve done back there. And then one of the little thing and this is a little tidbit. Labor is an issue. The labor markets are tight. Our turnover rate in Melbourne is 2%.

Our people – I was just there last week and did a plant tour and we have extraordinary people there doing extraordinary things and you’ll see the results of that going forward. It’s a very, very big deal. And then to be followed with the – which is a big deal. So from those points of view and the strength I’m seeing in the U.S.

sales force, which is very nice to see that because we don’t have those FX effects there. Those are pure to us. So, I am very excited about the products and the direction of the business..

Great, thanks – thanks guys. I’ll jump back in queue and let someone else to ask..

Thanks so much. Thanks Jayson..

[Operator Instruction] Up next is James Sidoti, Sidoti & Company..

Good afternoon, guys.

Can you hear me?.

I can Jimmy, go ahead, fire away..

Great, great. So the sales number 129 million – few million above my number and the street. Were there any one times in that or was that – is that generally recurring business..

Now, that’s our recurring business. No, one times..

Okay.

And on the capital line with the strongest line – what was the main driver there?.

The capital line?.

The capital line….

It was really dispersed in a lot of things. I mean, the probably the largest thing was the ProGuide. ProGuide was – we had some new catheters like the hydrophilic catheter for –with it. For introducer sheath was the big grower.

But then it’s interesting because micro catheters did well, the micro access has added a few hundred thousand – 300,000 and pick a numbers of growth, the locking was all locking range catheter [indiscernible]. So it was really about $600,000 or $700,000 are also around $300,000 and $400,000 of growth it’s kind of spread across the [indiscernible]..

Yes our fountain catheter, our infusion catheter was up 37% our guiding catheters were up 82%..

Yes..

Over a year ago these are guiding catheters that’s a pretty good move. Our micro-catheters that are used to deliver embolic materials were up 31%. So these are kind of big numbers. You know there I mean it was a great part of the business for the quarter clearly. It was several products not just one so..

Do you think this is because of procedure growth or this is because of the change you made in the sound strategy last year or what are you expecting growth here too?.

I just going to say we’re just taking the market share..

Market share..

Yes, here are another product that I want to about another part of the business for the quarter….

And how we are looking to that its international market share growing at even a greater rate than in the domestic but they’re all growing..

[Indiscernible] check business for the quarter was up 11.2% and we introduce this AERO mini stent and we can make them fast enough.

And then we just literally cannot make them fasten enough so this is a very small pulmonary tracheobronchial stent and a kind of – I don’t want to say caught us by surprise but clearly we’re, we didn’t have enough inventory we [indiscernible] it sold everything we have and we’re back ordered.

And it’s great when you have a product that has the demand and once you don’t have competition. And so we have as you know we are a big player of that tracheobronchial market and as mini AERO has just taken off. It’s pretty nice to have that.

You get product that take time or they spot or they do this, this thing just came out it was off to the races from day one, great product..

Okay and then….

A great margins..

Last question for Ken is on the tax rates, first time in a while I think you guys have put a tax rate over your 30% wish there’s something specific to this quarter or is that we should expect going forward?.

Well is what we project it for you for the year when we gave guidance and we didn’t have any onetime helps so we’ve said seem to pick up things whether it was R&D credits or in Ireland or here or we got able to reverse some costs we had there, it’s kind of at normal rate now.

And for frankly it’s gone up a little bit because we’re making money in the U.S. and the U.S. has the high tax rate. So we got some plans to try and shift some of that and Mexico is prior to that. So that we can get gradually move more of the earnings shift that a little bit from what when we manufacture that.

But the point is that that is a normalized rate and one you should plan on..

Okay, thank you..

Yeah..

Thanks Jayson..

[Operator Instructions] At this time there are no further questions..

Well, let me going to summarize, I think that we did a good job. I want to thank my staff, we will do better. We are on our plan, we are – I think demonstrating that we can be disciplined and we should be disciplined. And then we will get higher returns for our shareholders. Our goal is to simply make more money and still balance the business.

We have employees and stake holders and all of that sort of thing. But I think we are doing those things. And on the R&D side pipeline side, international side things are getting better and stronger. And their presence is being felt more and more and I think you can see that kind of across the board in both our dealers internationally.

China and worldwide dealers receiving up and this is when we’re talking about Central and South America and so on and so forth. So our business is strong and again it’s just pleasing to see what the U.S. is doing. We haven’t seen there was large numbers up there and very candidly I wouldn’t be surprised if that didn’t go into double digits, this year.

So there is a little pressure from our U.S. guys kind of feel there. But I believe that’s that may very well be in the cards. And if you look at other companies, great companies out there. But I think this is a good performance. So guys that we are on plan, we have a one year plan and two year and three year. And we have a monthly plan.

That is to look at it to make sure that we are on course. And that is what our promise is to deliver, hence we enhance the value to our owners and we intend to do that. So we will thank you for your interest, we will be out on the road, traveling around and talking to folks in the future. We have a number of conferences that come up, later on.

But we look forward to reporting the progress in the second quarter in the consolidations and the product introductions. And I think you can look forward to interesting and positive reports as we go forward. So well, thank you very much for your interest and we will go ahead now and sign off from Salt Lake City wishing you a good evening.

And all good things, good night..

Ladies and gentlemen that does conclude today’s program. We would like to thank you all for your participation..