All right. Hi, everyone. Thanks for joining. I'm Lilly Lozada. I'm on the MedTech team here at JPMorgan, and I'm happy to have the Merit Management Team with us here today. I'll pass things over to CEO Fred Lampropoulos, and then we can jump into some Q&A.
Thank you very much. Welcome, everybody, and thank you for being here. Let me introduce Raul Parra, my CFO. I also have my boss in the room, which is a member of my board, which I was not expecting, so please behave yourselves. I appreciate that. All right, let's get going. In our presentation, we're going to talk a little bit about some history, so you're having to understand a little bit more about the business. We'll talk about some various products, and we'll leave plenty of time to answer questions for you. This is all the fun stuff that you like to hear. Okay, so what about Merit? Merit is a business that basically this year is going to do, as you can see on the screen, just all around. I like to round when it's in my favor: $1.4 billion, $1.356 billion to be exact.
You're all familiar, I think, or some of you are familiar with our continued growth initiatives, and I'll hit that by simply saying that three or four years ago we started a program that had to do with growth and operating margins and free cash flow. It was so successful that we decided we would go ahead and hang ourselves out there again and step up to the plate, and I think we have. I think it's really good to keep the entire company focused, and we have all of our incentives and compensations for every single employee in our company are focused on the goals that we set forth, and we all win or we all lose, and so we've been winning, which is really nice and creates a wonderful environment for employees who know they're in the game, and there's a reward for them.
We have about 7,000 employees. We have eight R&D sites, but we have three primary sites and a couple of satellite-type offices where we have just two or three people on an acquisition that we made, and they have some really good people and really smart, but they didn't want to come to the beautiful mountains of Utah, and so they stayed in New Jersey, and you can ask me questions about that later on. I'm sure that'll be the highlight of our discussion. In terms of products, I think one of the things that has been very helpful for Merit is we have stayed the course. We've had a plan from the beginning. We have a lot of products, a broad product line, and those products produce profits and margins that help us to be able to invest in products and pay for them.
And then that would go for things like the WRAPSODY and other products that will be coming in the future on that platform. We have almost two million sq ft of manufacturing, and we manufacture worldwide, which has both challenges and opportunities. In Europe, we're in Ireland. We are also in France and in the Netherlands where we have our European headquarters. But we have a facility in Singapore. Of course, Mother Merit is in Salt Lake City, Houston. We have facilities in Richmond where we do distribution and so on and so forth. The point is that we have a broad business, a scaled business, and I think that was part of our goal is if you were going to play with the big boys and girls, you needed to make sure that you had a certain amount of critical mass.
As I like to say, and you've all heard this at one time or another, Merit is the best. If we were a baseball player, we'd be in the Hall of Fame of having the most singles of anybody in the history of baseball. And we've had a lot of singles, and that's helped to build a business, but all with both tactical and strategic reasoning behind them in terms of fitting together a product line and focusing. You can see from the groups on this slide, we have our CGI group, a lot of emphasis in the last several years on peripheral intervention, and that's because of the fragmentation of the marketplace. In the one, there's three or four guys on the menu. You all know who they are, but once you get down to the more of the peripheral areas, there's a lot of smaller areas.
Remember, it's everything but the heart. So we're talking about from your toe to your head. There's a lot of space in between, and we focus on those areas that others might ignore. The custom and procedure pack kits may look boring to you. We have, I think, thinned that out in terms of doing the custom kits, but on specific areas like doing products for drainage or various types of intervention, including pericardiocentesis or thoracentesis or pneumothorax and things like that. We have specific trays. Instead of building 100, we might build 10,000 of them, and so we get the efficiencies of that operation in our business. Then the endoscopy business. That's a business that struggled a bit because of some supply chain, but all of those have been solved, and the business is growing, and we have a nice pipeline of products.
And we've made three major acquisitions. We call them major. You guys call them bolt-ons. You call them whatever. But if you take a look at the Angio deal that we did where we bought their chronic catheters and their acute catheters that fit into a strategy in our renal therapy group, and I'll talk about that a little bit later on. And then we also bought EGS, which fit perfectly into our endoscopy business because it was a single product company, but one that fit and one that we could train and one that gave both sides products to sell. So we have a much bigger bag in that particular area and a number of products that have been developed internally. We're a bunch of peddlers. We like to sell directly to hospitals, but we have an OEM business. We have some distribution. We have modified direct.
So what does that mean? Well, in places like Japan, you almost always use some form of distribution, but you're making both the clinical and you're making the hospital calls, and it's the relationship. The rest of it is almost, like I said, a distribution-type model. OEM is an interesting business and one in which we've been engaged in for a very, very long time. We produce products that we use in our own development every day: stopcocks, connectors, catheter shafts, guide wires, all of these things. But it's a capacity issue. It does absorption, but we never sell something that's essentially going to compete directly with our direct sales force. So we're very cautious, and I think we've navigated this very well over the years. It's a great business, and you can name all the companies.
You know them all, and every one of them uses a Merit product someplace. It's always fun to go to a trade show, walk down the aisle, and you'll see that there's a Merit product here. There's a Merit product. Some of you wouldn't notice that, but I can tell you old Hawkeye here sees everything, how it's used, how they're using it. It could be a torque device. It could be a stopcock. It could be this. It could be a scalpel. It could be a number of different things, but it uses up our capacity because most of these products are also automated. That tells you about the global reach. It's pretty extensive. There are areas, of course, as I mentioned, in Europe, but also in Central America.
In the Middle East, we do a lot of work, but we do a lot of manufacturing in the various locations that I discussed before. Direct markets, if I had my way, we'd all be direct, but there's a certain scale that's required and certain rules of the game. But basically, the business has been built on a direct relationship with a physician, a cath lab technician, or that sort of thing, aside from the OEM business and others and the distribution. But we are, and we enjoy, I think, the opportunities of having that face-to-face dialogue. At the end of the day, and I say this because I remember many years ago, someone said, "Well, you might as well fire all your sales guys because there's not going to be any need for that." That's heresy.
Someone said to me one time, "The truth always begins as heresy." In this particular case, it was just not correct. It's still, we like to buy from people that we like. We like to buy things where people will back us up. We like to buy things from people that will assist us in almost any aspect of our business and realize that that's a critical part of business. But we've built that over many, many years. Successful M&A, again, people from time to time will ask, "Well, why are you doing it? Why are you doing that?" It all has both tactical effect and a long-term part of our strategic plan. I think they've worked out generally very well. Not everything works, but I would say generally most have, particularly the last three that we've done, have seemed to be working out just fine.
They're either all transferred into our Mexico facility or they're being built in Salt Lake City. In one case, another one's being built and transferred to Ireland. So we're taking them in some cases from contract manufacturers, but Merit builds things. Merit is vertically integrated. Merit does a lot of things, and I think we're doing pretty well. You can all read. I have a little struggle with things from time to time, but I think we'll just go past that one. We have a great business. We have a unique business. We have a business that is built on reliability. One of the things that's really helped us with both our direct customers and our OEM and other parts of our business is people rely on us. They know that we have quality. They know that we'll deliver on time. They know that we're well financed.
That's a big deal. Supply chain management, aside from all of the horror stories that you've heard over the last several years, is an ongoing, never-ending issue. And I think that's something that's important to our customers. It's important to us, and it speaks, I think, volumes to the success that we've seen. I've got one of the great CFOs in the game. This guy, look how nice he is. Look how pleasant he is. But boy, I got to just tell you, when those teeth come out, there's a movie right now. I think it's called Wolfman or something like that. And this guy over here and this guy right here, I have people who have been a tremendous help to me into this business over many, many years.
When you start a business with one person and you have over 7,000, that takes a lot of work and a lot of people and a lot of input. I will say that my expertise is in selling and in marketing and identifying things because everything you look at essentially has been my work. Then on the other side of it, both in operations and finance. The one thing that I really appreciate about Raul is his ability to figure out how to deliver the message. Think about this. Or if you considered that, let me show you this. The same with Travis. I also have one of the great transfer guys in the room. He sits in the back. We never mentioned his name because you all want to hire him.
But let me just show you the execution of getting a product and moving it from one point to another and not missing a beat and maintaining and keeping those revenues is really important, as you can all imagine. And I think we've done it great. His name is Greg Fredde . We have security guys here that will arrest you if you try to talk to him, so please be wise about that. WRAPSODY. Why WRAPSODY? Well, we had, I think for years and years, built a business that was, I don't like the word commodity, but I will say that they were reasonable tech. We had some really high-tech stuff and technology, a portfolio of patents, hundreds and hundreds.
But it was time for us to start to move on to something, and we identified a couple of areas that we felt really needed significant investment and time. And we had the resources. We had the sales force. We had manufacturing integration. And the WRAPSODY, I'm pleased to say, is something that was totally developed in Salt Lake City. We did it there. We built it there, including our own PTFE, the stents. We built the shafts and things at our facility, our catheter facility in Houston. But it's something that I'm very, very proud of that we were able to bring from start to finish during a pandemic. Try to go out and do a study in the middle of a pandemic and get 400-plus patients enrolled globally. It's really trying.
Yet, as we submitted modularly our plan, our IDE, I think we did it with great effectiveness, and we were able to hit all of the time frames. On December 23rd, without any delays, any 483s after the PMOs, after audits of all of the, not all of them, but a number of our facilities, our vendors, and everything else, we were cleared by the FDA for the U.S., which is the major market. Let me hit that by saying that on the 28th of this month, we will have essentially an analyst day, investor day, in which we will discuss our view of the opportunity, the challenges, the platforms, a whole bunch of issues that you want to know: reimbursement, pricing. All of those will be issues that we'll talk about on that call.
We've been asked a few questions today as to why so late or why the 28th, well, that's because we're really busy. We just got approval three and a half weeks ago, and we just want to make sure that we have everything buttoned down, so on the 28th, we're looking forward to that call that you can all participate, but maybe more importantly, we have something that nobody else has. We have data that supports not a small improvement, but a dramatic improvement in performance over anybody else. You can look at the data. You can come to your own assessment. We have the first in human, then we have the six-month. We've released that data, and the full year data will be available soon, and I have not seen that data yet. I have little birds that whisper, but shoo fly.
When we get that, we nail all that down. Then we'll talk about that. Will it be on the 28th? Somebody asked me that question. If it's ready, we'll release it. If it's not, we won't. We have a bunch of symposia coming up. We have a number of meetings, like the meetings in Great Britain. There's the LINC meeting and others. But at the appropriate time and when we have it, we will show that information. This is a little schedule that I just really addressed. I'm proud of the team. I'm proud of the professionals that Merit hired, put into place, our Chief Medical Affairs Officer. People have done this before. They're a really good help. And we've been also training our sales force. I'm going to talk a little bit about RTG because I think it's important in this scheme.
RTG was an idea, as I mentioned. Merit has many, many products, but focus on almost anything you do requires time and effort, and so we started looking at the portfolio and came up with a concept of saying, "We want to be at the same point of sale, and we have a number of products, and we filled in a few more." There along came Angio, and it didn't come along. We sought it out. It wasn't from a banker. We said, "This will fit. This is something that we can go and put together and have this force," but we wanted to be able to pay for the commercial side of this with a portfolio where people could take 10 products that they could focus on, so peritoneal, acute, chronic, Surfacer, HeRO, WRAPSODY, and then all the access products.
And this is something that isn't talked about much, but it's part of our overall growth aspect. Please be reminded that Merit are the access guys. We're going to get you in there. Whether it be a needle, a guidewire, a sheath, closure, all of those other pieces that you need to do, Merit already has. And so we have a sales force that's engaged, educated, and we are now off in the U.S., which is, as I mentioned, the big plum and the big opportunity for the company. Raul, go get them.
You want me to take it? As Fred mentioned earlier in the presentation, we kicked off our three-year plan, CGI, after we launched Foundations for Growth, which was a really successful plan. And you can see the performance under that plan there at the bottom of the page.
Just to highlight, under Continued Growth Initiatives, it's really more of the same. Continue to deliver and apply everything that we learned under Foundations for Growth to the next three years. I think we've had a successful first year. Now, we'll talk about that in about a month or so when we do our earnings call. We released revenue last night, so we're well within the range that we outlined under CGI. We were right at the midpoint on a constant currency basis of the 5%-7% that we've promised to deliver over the three-year period. Operating margins, we're going to shoot for 20%-22% and a minimum of $400 million in free cash flow.
Again, I think once we get our earnings call, you'll get a better appreciation of how we performed in the first year, which I think sets us up well for the next two years. I'm pretty excited about what we can do there.
Yeah, all these things have been helpful. One other thing too, and it's not because one of my directors is in the room, but I think, as I mentioned earlier on, the people that help you, a team of people who are focused on issues and experienced, I think our board is an extraordinary board of finance, of people with experience in healthcare, in large hospital groups, and so on and so forth. So the board, I think, has been very helpful.
It was actually a recommendation from Sheryl, "You ought to look at this, and you ought to see what you can do to strengthen this." And I think that it's functional. Everybody speaks their mind, and they're tough. Lonny Carpenter, who was CFO or COO over at Stryker for many years, and David Floyd, these are people that have a lot of experience. Mike McDonnell, Laura Kaiser. There are other people who have a lot of medical experience and others who have other practical experience in other areas. So I want to really say that all of these things, you can have ideas, but bringing them across the finish line, executing at the end of the day is the game.
You can have all the great ideas, and many of them have dust on them and are sitting on a shelf someplace with no money or without a strategy and so on and so forth. I think that's something that Merit has done extraordinarily well.
I think we can skip this one and the next one for it. Yeah. All these ones. But here, I think I'll just highlight the results, at least on the revenue side for this year. Obviously, unaudited estimate, but beat our own expectations and street expectations on what we thought we could do for the fourth quarter and ultimately for the year. And again, I think it's a really strong start to our CGI program in year one. So one of the signals that I do when I don't want him to say anything more is give him some water.
So there's your signal. Perfect. Yeah. No, actually, that means that you can get ready for questions. Listen, I think that pretty well wraps up all of these investment highlights you're all aware of, or you wouldn't be sitting here. This is an important conference. We all understand that. And there you go. So with that being said, we've got about 18 or 20 minutes of questions, and I'll be delighted either from our analysts or our host or any of you to answer those questions.
You pre-announced fourth quarter, as you mentioned, so maybe we could start there. Can you talk us through in some more detail some of the trends that you saw in the quarter and how things looked by segment across both cardiovascular and endoscopy?
Go ahead. Yeah. Look, I think the overall results, I think, were really good. Right?
I think everything that we expected or wanted happened. One of the key questions people had was around OEM and whether we'd get the growth that was expected. We were looking at somewhere around north of 20% growth for that fourth quarter, and happy to say that it rebounded just as we expected. China did a little bit better than anticipated. US was strong. EMEA was strong. Really, I would say across the board, we did really well, and we're excited about how the business performed. It was a strong finish to the end of the year.
Realizing it's still early, but as you look ahead to 2025, any high-level thoughts that you can share on how you're thinking about growth for this year and qualitatively, any headwinds or tailwinds that we should be keeping in mind as we model the year?
Yeah, of course.
We'll talk about that on our call and talk about how we see 25 in our forecast and all of this sort of thing on the 25th of February. So I think one of the other things we've done is I would love to spend hours telling you about all the wonderful things that we're doing, but I have a little thing that I hit and gives me a little jolt, so. Just like he hands me water, I have a buzzer on. Yeah, he's got a buzzer, so I give him the water. So we're talking to his grade. On the 25th, we'll talk about those things.
Understandable. Maybe moving on to some of the specific products and segments. You ended the year on a high note with FDA approval of WRAPSODY.
So could you share some comments on the early feedback and receptivity that you've gotten from the field since approval and the readout of data last year?
Yeah. Let me just, in terms of the sales force, I think what we tried to do and then we were successful in doing is that we started training early on, but without building expense that we couldn't pay for. And I think that's one of the things that was important to us was not to see your expenses really go off the chart. Someone criticized and said, "Well, that's an optimistic thing you're doing when you do this, Fred, so don't do that." So I'm going to put my hands like this, like this young man here. I think that the sales force is trained. They have experience. They have a portfolio of products. Everybody is enthused.
I think the data is important. I think the one-year data is also equally, if not more important, to show the long-term patency issues. So I think we've done this at the advice and counsel of people who have done it before. And I don't know what else we can do. Now we'll look at things like reimbursement. We'll look at expanding further as the business allows us to. So we're not going to go out and spend a whole bunch of money and then have to pull it back. We'll just pace this along, and it'll be consistent with the goals that we've set forth.
Yeah. I mean, I would say the reception has been, I would say, positive. Right? So we got purchase orders. We had our first sales. We've had our first cases. All that have come out great.
And so I think we're excited about this product launch. It's a big product launch for Merit. Fred mentioned that we hit a lot of singles and doubles. I think for us, as we look at this, this is bigger than that. Right? This is a kind of home run type product is what we hope it to be, so.
I know you're saving a lot of the commentary for your event later this month, but could you share some early thoughts on how we should be thinking about the revenue opportunity and ramp this year and how meaningful of a contributor do you think it could be in 2025?
Yes. I mean, we can't. Right? I mean, I'd love to, but again, we've been very metered in how we talk about WRAPSODY and setting expectations.
I think we would be doing it an injustice if I just were to answer that here. And so I think we'll set the stage on the 28th. We'll give you our guidance on the 25th of February, as Fred mentioned, and I think that'll kind of level set everybody's expectations on where we're going to be at.
I will comment that the technology to build this product is really a platform for Merit for a number of other things that either we're working on or that we will work on. So this is not the first and last. This is something that you'll see more of, and we'll talk about those. When are you going to talk about the new stuff? Well, we're talking about it today, but the programs that we have that are working, I'd like to say that most of you are looking out that front window.
I'm looking at this stuff through the back window and saying it's already gone, and we're working on the next issues of products that we think have equal or better opportunities. So it's just the first of, I think, of many, but we're going to be very reluctant to talk much about it other than to say it's a platform of a number of other things in the future.
Got it. Maybe shifting gears a little bit. You acquired certain assets from Cook recently. So could you just talk through the rationale for that deal and where do you see the biggest opportunities for synergies and cross-selling?
I think part of this comes from the RTG group of the Renal Therapy Group where we had success, where we had focus.
We have a number of products in EP and in structural heart, but they're not the valves and those sorts of things, but they're the delivery products that we already sell every day. And we have several more that are in the pipeline that will be part of our R&D internally that are coming. I think as we looked at this product, there were a number of items. One, it has a global presence of this product. So it's approved in China and in Japan. In Europe, it's got a 35% market share and in the U.S. and other locations. So it had the global nature of it. There are really a couple of players here. And Cook is one, but they didn't have any other products that were in this group. It was for them essentially an orphan.
For us, it fit in, and it's part of a building block where we've seen success in RTG. It meets the profiles. It meets the kinds of things that we want for our program. And those guys are just as excited. The people that are selling those products are just as excited as these products that the RTG group has. So we're not going to say we did it once, and so that means that everything works the same. But at the same time, we have seen what focus has been. We also realize over the years that with all of these products, there's 10% of them or 20% that get attention. A lot of other things don't.
So as another part of this strategy, we have an inside sales force that is taking the time off in a number of areas where they're working on products that have been around longer, where they can talk to a cath lab supervisor and that sort of thing, while we build these other more strategic teams to sell maybe more complex products as well. So that was the rationale. The ESG issue was one because it fit into, and we've been looking for a product for a long time in the GI market. It's, we think, the best product in that marketplace, but a company that was a single product company that was kind of struggling as a single product company. And so we were able to fold that in and transfer it to Salt Lake City. And again, I want to go back to transferring products.
It's the finance and all that kind of stuff, but all the hard work starts then. I think we've done an extraordinary job of moving things to Mexico, to Ireland, to Salt Lake City, where they best fit in terms of our manufacturing and our capabilities. And for instance, the Angio product is completely transferred to Mexico and has been for several months now. And we were producing in upstate New York, and now we're producing the entire product line in Mexico. A huge difference that's a contributor to the program that we've been talking about.
Got it. You've been quite active on the M&A front over the last few quarters. So where does M&A sit on your list of priorities in terms of capital allocation moving forward, and how do you view M&A as part of your growth algorithm?
Yeah.
We've done a lot of deals, a lot of small things. I think J.P. Morgan and Piper, but J.P. Morgan is the lead bookrunner. We did a convertible, which we swore we would never do for 20 years, but at the rates of return on what we can get versus what we have to pay and the ability that because of the free cash flow generation, we feel very comfortable in terms of doing that, and so it's always been part of it, and then we saw the markets turn in our favor, and by that, I mean private equity and venture and a lot of these things were kind of put on hold, access to public markets, so those all worked in our favor.
And we've seen probably more activity in the last two years than I've seen at any other time that I can remember over a relatively long period of time. So I think it's an important part of it, but I think the balance of both our internal research and development and the so-called bolt-ons and that sort of thing are very important. Will, do you want to comment? Yeah. No, I think as things were a little frothy and as we looked at the market and what we wanted to do with our portfolio, as Fred mentioned, wanting to go deeper and get more focus, we thought that raising some money through a convert was the right thing to do, especially when you locked in an interest rate at 3%.
I think we were one of the very few that really didn't think that interest rates were going to be dropping significantly or fast. And so we went under the premise that, "Hey, let's lock it in at 3%. Banks are paying out at 5%-5.25%. We can essentially arbitrage our interest expense and have a strong balance sheet with a large amount of cash that we can put to work on some of these ideas that we had as far as the sales forces we wanted to build and some of the areas that we wanted to fill the bag up with." So I think it's worked out great. We continue to generate a strong amount of Free Cash Flow. And so I think the convert has been what we think is a good idea and worked in our favor.
I think he also raised an issue. I used the word frothy. I think we started seeing valuations that didn't fit our plan. It may have fit others, and you look at the deals that are going on. They still seem to. There's still a lot of consolidation going on in the industry, but for the things that we were looking for that would fit, there was a period of time when it was a little dry because there were a lot of expectations. It seems like some of those expectations, at least for us, have come down, and I think there's also some realignment of portfolios of companies that are looking, and Cook would be a prime example or Angio, where that product didn't fit for them any longer.
And it was probably better off, and at least we felt that way, better off in our hands than it was in theirs. And I think that's what we've been able to do is use our capabilities to take products that are good products, but to be able to take them and put them into our sales forces' hands with a strategy behind it, not just a product. We're not just after revenues or after this for something that's going to die. We're after building. And I think those have been very successful and we'll continue to consider those opportunities. And there's plenty of them. They're out there. We're busy looking at things, but it has to fit the model. Yeah. I think we really never stopped looking.
I think there was this misconception of us that, "Hey, we took a pause to kind of reset things." And that wasn't the reality. The reality is we had Foundations for Growth going. They had to fit in that framework because we wanted to make sure that we delivered on those numbers. And things were expensive, and we just couldn't find the right deal that kind of met those metrics.
Could you talk a bit about what you're seeing in China? It sounds like things have broadly been performing better than expected, but can you speak to how sales versus price have been trending and what we should be expecting in terms of BVP this year?
Yeah. Look, I think this is not going to be a surprise to anybody. We've been talking about Volume-Based Purchasing for a long time.
We've talked that we thought 2025 would be similar to 2024. Right? A lot of variability in what we see. I think our sales force has done an excellent job of going out and getting more volume, really covering up some of the impact that we're seeing from the pricing cuts. And I think they've done an excellent job adjusting to the new environment that we're in. But I think we continue to look at China as an important market for us. We continue to register new products. And the Cook transaction actually has an opportunity for us to sell a product that's already registered there, which we haven't really talked about. So as we look at the China market in the long term, we're excited about what we can do there. It's got an aging population. There's a lot of markets we haven't penetrated into. We're registering new products.
Once we get the Volume-Based Purchasing behind us, with the volume increases that we're seeing, it looks, we think we can kind of get back to more normalized growth that we're used to seeing in China.
Well, and part of that is that as we navigate through that, you'll see that the goal is simply to have more Chinese companies build product for their country. Does that sound familiar? It's exactly what we want to do here and what everybody wants to do. But there are a number of areas of technology that they don't possess or that they have not, and we're not going to help them out by having a plant and having it migrate, if you want to use that. But so I think that, for instance, with the Cook deal, they haven't spent any time at all, but it's approved.
They have some revenues there, but we think we can grow that dramatically. And we think that for a reasonable period of time, it's not going to be subjected. Not every product is subjected to volume-based purchasing if they don't have the technology. So that's another part of this is what products do you have and then how do you deploy your capital and your resources to make sure you can take advantage of those opportunities.
You mentioned OEM earlier. Growth there has bounced around a bit over the last few quarters. So could you dig a little deeper into where dynamics stand in the segment and how should we think about growth settling out in 2025 and longer term?
Yeah. I mean, I won't get into 2025 or beyond other than to say I think we're very comfortable with OEM and the opportunity that OEM has.
Fred and I have obviously been around for a long time. We've seen the variability in OEM. The one thing that always stands out is that customers always come back. They always deliver growth over time. And we've got a lot of opportunity for them, and we're excited about what they can do. We talked about the technology behind WRAPSODY, and there is a chance there for OEM to get into a different market that they're not in right now and create a new opportunity. And so we've barely scratched that. We're starting initial discussions internally about what we can do there. So I'm excited about what we can do with OEM over time. They've shown that they can grow and that they're a key part of the business. Well, and it's been here from day one. I mean, it's not new to us.
We've been doing this from the day we started the business. I think the reliability and people have come to realize that you might be able to buy something cheaper, but are you going to be able to actually get it, and what's it going to do to your production? So our reliability, the qualities, are the very same products we use every day. So these are not secondary products or afterthoughts. They're things that we use, but it might be a stopcock or a catheter shaft or this or that, but it helps us with our capacity. It absorbs. And if you look at the customer list, they're the top companies in the world, and they make big-time investments in Merit. So sometimes I think whatever bumpiness you want to call it is really an issue of timing, not the growth and the opportunity in the business.
So we saw after COVID, we saw we don't have any inventory, so that swung up. Then they had to absorb that, so it slowed down. But if you look at the charts and look at the business over time, you'll see very good growth, and you'll see very good increases in profitability for that product, for a number of them. There's a lot of them that go there, and they're all names you all know. We can start at the top of the largest companies and work down the top 20 or 30 companies in the world, buy a lot of products from Merit. So it's a nice business.
All right. Well, with that, I think we're out of time. So thanks to the Merit team for being here, and thanks everyone for listening in. Thank you.