株探米国株
日本語 英語
エドガーで原本を確認する
0000096943false00000969432023-05-042023-05-04

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of Earliest Event Reported) May 4, 2023

TELEFLEX INCORPORATED
(Exact name of Registrant as Specified in Its Charter)
Delaware 1-5353 23-1147939
(State or Other Jurisdiction
of Incorporation or Organization)
(Commission File Number)
(IRS Employer
Identification No.)
550 E. Swedesford Rd., Suite 400 Wayne, PA 19087
(Address of Principal Executive Offices) (Zip Code)
Registrant’s Telephone Number, Including Area Code (610) 225-6800
Not applicable
(Former Name or Former Address, If Changed Since Last Report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading Symbol(s) Name of each exchange on which registered
Common Stock, par value $1 per share TFX New York Stock Exchange


Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐





Item 2.02. Results of Operations and Financial Condition.
On May 4, 2023, Teleflex Incorporated (the “Company”) issued a press release (the “Press Release”) announcing its financial results for the quarter ended April 2, 2023. A copy of the Press Release is furnished as Exhibit 99.1 to this Current Report.
In addition to the financial information included in the Press Release that has been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”), the Press Release includes certain non-GAAP financial measures. These measures include constant currency revenue growth and adjusted diluted earnings per share. Constant currency revenue growth is based upon net revenues, adjusted to eliminate the impact of translating the results of international subsidiaries at different currency exchange rates from period to period. The impact of changes in foreign currency may vary significantly from period to period, and generally are outside of the control of our management. We believe that this measure facilitates a comparison of our operating performance exclusive of fluctuations that do not reflect our underlying performance or business trends. Adjusted diluted earnings per share is based upon diluted earnings per share available to common stockholders, the most directly comparable GAAP measure, adjusted to exclude, depending on the period presented, the impact (net of tax) of (i) restructuring, restructuring related and impairment items; (ii) acquisition, integration and divestiture related items; (iii) other items identified in note (C) to each of the reconciliation tables set forth in the Press Release; (iv) costs incurred in connection with our implementation of a new global enterprise resource planning system and related information technology transition costs; (v) certain expenditures associated with the registration of medical devices under the European Union Medical Device Regulation; (vi) intangible amortization expense; and (vii) tax adjustments. Management does not believe that any of the excluded items are indicative of our underlying core performance or business trends.
Management uses these non-GAAP financial measures to assess the Company's financial performance, make operating decisions, allocate financial resources, provide guidance on possible future results, and assist in its evaluation of period-to-period and peer comparisons. The non-GAAP measures may be useful to investors because they provide insight into management’s assessment of our business, and provide supplemental information pertinent to a comparison of period-to-period results of our ongoing operations. The non-GAAP financial measures are presented in addition to results presented in accordance with GAAP and should not be relied upon as a substitute for GAAP financial measures. Moreover, our non-GAAP financial measures may not be comparable to similarly titled measures used by other companies.
The information furnished pursuant to Item 2.02 of this Current Report, including Exhibit 99.1 hereto, shall not be considered “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of such section, nor shall it be incorporated by reference into future filings by the Company under the Securities Act of 1933, as amended, or under the Securities Exchange Act of 1934, as amended, unless the Company expressly sets forth in such future filing that such information is to be considered "filed" or incorporated by reference therein.
Item 7.01. Regulation FD Disclosure.
In connection with the conference call to be held by the Company on May 4, 2023 to discuss its financial results for the quarter ended April 2, 2023, the Company plans to reference a slide presentation, which will be made available in advance of the call through the Company’s website. A copy of the slide presentation is furnished as Exhibit 99.2 to this Current Report.
The information furnished pursuant to Item 7.01 of this Current Report, including Exhibit 99.2, shall not be considered “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of such section, nor shall it be incorporated by reference into future filings by the Company under the Securities Act of 1933, as amended or under the Securities Exchange Act of 1934, as amended, unless the Company expressly sets forth in such future filing that such information is to be considered “filed” or incorporated by reference therein.




Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
        99.1    Earnings Press Release, dated May 4, 2023
        99.2    Earnings Conference Call Slide Presentation
104 The Cover Page from this Current Report on Form 8-K, formatted in Inline XBRL Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.





Date: May 4, 2023
TELEFLEX INCORPORATED


By: /s/ Thomas E. Powell
Name: Thomas E. Powell
Title: Executive Vice President and
            Chief Financial Officer

        

EX-99.1 2 q12023earningspressrelease.htm EX-99.1 Document

Exhibit 99.1
image_0.jpg
FOR IMMEDIATE RELEASE May 4, 2023
                                
Teleflex Reports First Quarter Financial Results and Full Year 2023 Outlook

Wayne, PA -- Teleflex Incorporated (NYSE: TFX) (the “Company”) today announced financial results for the first quarter ended April 2, 2023.

First quarter financial summary
•Revenues of $710.9 million, inclusive of five extra shipping days year-over-year, up 10.8% compared to the prior year period; up 13.2% on a constant currency basis
•GAAP diluted EPS from continuing operations of $1.63, compared to $1.63 in the prior year period
•Adjusted diluted EPS from continuing operations of $3.09, compared to $2.88 in the prior year period

2023 guidance summary
•Increasing GAAP revenue growth guidance to 4.65% to 5.90%
•Increasing constant currency revenue growth guidance to 5.00% to 6.25%
•Lowering GAAP EPS from continuing operations guidance to $8.14 to $8.74
•Reiterating adjusted diluted EPS from continuing operations guidance of $13.00 to $13.60

"We had a strong start to 2023 as our broad business momentum exiting last year continued into the first quarter" said Liam Kelly, Teleflex's Chairman, President and Chief Executive Officer. "In the quarter, we drove revenue growth in all global product categories and expanded our overall margins year-over-year. We also executed against our new product launch objectives and continued our integration of Standard Bariatrics. Our first quarter performance keeps us well-positioned to deliver on our updated financial guidance for 2023 and on our long-term durable growth objectives." The following table provides information regarding net revenues in each of the Company's reportable operating segments for the three months ended April 2, 2023 and March 27, 2022 on both a GAAP and constant currency basis.
1


NET REVENUE BY SEGMENT
Three Months Ended % Increase / (Decrease)
April 2, 2023 March 27, 2022 Reported Revenue Growth Currency Impact Constant Currency Revenue Growth
Americas $411.9 $378.0 9.0% (0.2)% 9.2%
EMEA 143.3 136.9 4.7% (5.8)% 10.5%
Asia 78.7 69.2 13.8% (9.0)% 22.8%
OEM 77.0 57.6 33.5% (1.0)% 34.5%
Consolidated $710.9 $641.7 10.8% (2.4)% 13.2%

NET REVENUE BY GLOBAL PRODUCT CATEGORY
The following table provides information regarding net revenues in each of the Company's global product categories for the three months ended April 2, 2023 and March 27, 2022 on both a GAAP and constant currency basis.
Three Months Ended % Increase / (Decrease)
April 2, 2023 March 27, 2022 Reported Revenue Growth Currency Impact Constant Currency Revenue Growth
Vascular Access $177.7 $166.1 6.9% (2.3)% 9.2%
Interventional 116.9 96.9 20.7% (2.6)% 23.3%
Anesthesia 93.3 86.9 7.3% (2.6)% 9.9%
Surgical 99.0 89.7 10.4% (3.9)% 14.3%
Interventional Urology 75.4 74.9 0.6% (0.3)% 0.9%
OEM 77.0 57.7 33.5% (1.0)% 34.5%
Other 71.6 69.5 3.1% (3.3)% 6.4%
Consolidated $710.9 $641.7 10.8% (2.4)% 13.2%
    

OTHER FINANCIAL HIGHLIGHTS
•Depreciation expense, amortization of intangible assets and deferred financing charges for the three months ended April 2, 2023 totaled $60.7 million compared to $59.0 million for the prior year period.
•Cash and cash equivalents at April 2, 2023 were $264.1 million compared to $292.0 million at December 31, 2022.
•Net accounts receivable at April 2, 2023 were $410.0 million compared to $408.8 million at December 31, 2022.
•Inventories at April 2, 2023 were $614.1 million compared to $578.5 million at December 31, 2022.

2023 OUTLOOK
The company raised its full year 2023 GAAP revenue growth outlook to 4.65% to 5.90%, reflecting our estimate of an approximately 0.35% negative impact of foreign exchange rate fluctuations. On a constant currency basis, the Company raised its full year 2023 revenue growth outlook to 5.00% to 6.25% year-over-year.

The Company lowered its full year 2023 GAAP diluted earnings per share from continuing operations guidance to $8.14 to $8.74. The Company maintained its 2023 adjusted diluted earnings per share from continuing operations guidance of $13.00 to $13.60, representing growth of (0.5)% to 4.1% year-over-year.

2


Forecasted 2023 Constant Currency Revenue Growth Reconciliation
Low High
Forecasted 2023 GAAP revenue growth
4.65% 5.90%
Estimated impact of foreign currency exchange rate fluctuations (0.35)% (0.35)%
Forecasted 2023 constant currency revenue growth
5.00% 6.25%


Forecasted 2023 Adjusted Diluted Earnings Per Share From Continuing Operations Reconciliation
Low High
Forecasted GAAP diluted earnings per share from continuing operations $8.14 $8.74
Restructuring, restructuring related and impairment items, net of tax $0.60 $0.60
Acquisition, integration and divestiture related items, net of tax $0.19 $0.19
Other items, net of tax $0.10 $0.10
ERP Implementation $0.05 $0.05
MDR $0.61 $0.61
Intangible amortization expense, net of tax $3.31 $3.31
Forecasted adjusted diluted earnings per share from continuing operations $13.00 $13.60


3


CONFERENCE CALL WEBCAST AND ADDITIONAL INFORMATION
A webcast of Teleflex's first quarter 2023 investor conference call can be accessed live from a link on the Company's website at teleflex.com. The call will begin at 8:00 am ET on May 4, 2023.

An audio replay of the investor call will be available beginning at 11:00 am ET on May 4, 2023, either on the Teleflex website or by telephone. The call can be accessed by dialing 1 866 813 9403 (U.S.) or +44 204 525 0658 (all other locations). The confirmation code is 650329.

ADDITIONAL NOTES
References in this release to the impact of foreign currency exchange rate fluctuations on adjusted diluted earnings per share include both the impact of translating foreign currencies into U.S. dollars and the impact of foreign currency exchange rate fluctuations on foreign currency denominated transactions.

In the discussion of segment results, "new products" refers to products for which we initiated commercial sales within the past 36 months and "existing products" refers to products we have sold commercially for more than 36 months.

Certain financial information is presented on a rounded basis, which may cause minor differences. Segment results and commentary exclude the impact of discontinued operations.

NOTES ON NON-GAAP FINANCIAL MEASURES
We report our financial results in accordance with accounting principles generally accepted in the United States, commonly referred to as “GAAP.” In this press release, we provide supplemental information, consisting of the following non-GAAP financial measures: constant currency revenue growth and adjusted diluted earnings per share. These non-GAAP measures are described in more detail below. Management uses these financial measures to assess Teleflex’s financial performance, make operating decisions, allocate financial resources, provide guidance on possible future results, and assist in its evaluation of period-to-period and peer comparisons. The non-GAAP measures may be useful to investors because they provide insight into management’s assessment of our business, and provide supplemental information pertinent to a comparison of period-to-period results of our ongoing operations. The non-GAAP financial measures are presented in addition to results presented in accordance with GAAP and should not be relied upon as a substitute for GAAP financial measures. Moreover, our non-GAAP financial measures may not be comparable to similarly titled measures used by other companies.

Tables reconciling changes in historical constant currency net revenues to historical GAAP net revenues are set forth above under “Net Revenue by Segment" and "Net Revenue by Global Product Category". Tables reconciling historical adjusted diluted earnings per share from continuing operations to historical GAAP diluted earnings per share from continuing operations are set forth below.

Constant currency revenue growth: This non-GAAP measure is based upon net revenues, adjusted to eliminate the impact of translating the results of international subsidiaries at different currency exchange rates from period to period. The impact of changes in foreign currency may vary significantly from period to period, and such changes generally are outside of the control of our management.
4


We believe that this measure facilitates a comparison of our operating performance exclusive of currency exchange rate fluctuations that do not reflect our underlying performance or business trends.

Adjusted diluted earnings per share: This non-GAAP measure is based upon diluted earnings per share from continuing operations, the most directly comparable GAAP measure, adjusted to exclude, depending on the period presented, the items described below. Management does not believe that any of the excluded items are indicative of our underlying core performance or business trends.

Restructuring, restructuring related and impairment items - Restructuring programs involve discrete initiatives designed to, among other things, consolidate or relocate manufacturing, administrative and other facilities, outsource distribution operations, improve operating efficiencies and integrate acquired businesses. Depending on the specific restructuring program involved, our restructuring charges may include employee termination, contract termination, facility closure, employee relocation, equipment relocation, outplacement and other exit costs associated with the restructuring program.  Restructuring related charges are directly related to our restructuring programs and consist of facility consolidation costs, including accelerated depreciation expense related to facility closures, costs to transfer manufacturing operations between locations, and retention bonuses offered to certain employees as an incentive for them to remain with our company after completion of the restructuring program. Impairment charges occur if, due to events or changes in circumstances, we determine that the carrying value of an asset exceeds its fair value. Impairment charges do not directly affect our liquidity, but could have a material adverse effect on our reported financial results.

Acquisition, integration and divestiture related items - Acquisition and integration expenses are incremental charges, other than restructuring or restructuring related expenses, that are directly related to specific business or asset acquisition transactions.  These charges may include, among other things, professional, consulting and other fees; systems integration costs; legal entity restructuring expense; inventory step-up amortization (amortization, through cost of goods sold, of the increase in fair value of inventory resulting from a fair value calculation as of the acquisition date); fair value adjustments to contingent consideration liabilities; and bridge loan facility and backstop financing fees in connection with loan facilities that ultimately were not utilized. Divestiture related activities involve specific business or asset sales.  Depending primarily on the terms of a divestiture transaction, the carrying value of the divested business or assets on our financial statements and other costs we incur as a direct result of the divestiture transaction, we may recognize a gain or loss in connection with the divestiture related activities.

Other - These are discrete items that occur sporadically and can affect period-to-period comparisons. See footnote C to the reconciliation tables set forth below for additional details.

European medical device regulation - The European Union (“EU”) has adopted the EU Medical Device Regulation (“MDR”), which replaces the existing Medical Devices Directive (“MDD”) and imposes more stringent requirements for the marketing and sale of medical devices in the EU, including requirements affecting clinical evaluations, quality systems and post-market surveillance. The MDR requirements became effective in May 2021, although certain devices that previously satisfied MDD requirements can continue to be marketed in the EU until May 2024, subject to certain limitations.
5


Significantly, the MDR will require the re-registration of previously approved medical devices. As a result, Teleflex will incur expenditures in connection with the new registration of medical devices that previously had been registered under the MDD. Therefore, these expenditures are not considered to be ordinary course expenditures in connection with regulatory matters (in contrast, no adjustment has been made to exclude expenditures related to the registration of medical devices that were not registered previously under the MDD).

Intangible amortization expense - Certain intangible assets, including customer relationships, intellectual property, distribution rights, trade names and non-competition agreements, initially are recorded at historical cost and then amortized over their respective estimated useful lives. The amount of such amortization can vary from period to period as a result of, among other things, business or asset acquisitions or dispositions.

ERP implementation - These adjustments represent direct and incremental costs incurred in connection with our implementation of a new global enterprise resource planning ("ERP") solution and related IT transition costs. An implementation of this scale is a significant undertaking and will require substantial time and attention of management and key employees. The associated costs do not represent normal and recurring operating expenses and will be inconsistent in amounts and frequency making it difficult to contribute to a meaningful evaluation of our operating performance.

Tax adjustments - These adjustments represent the impact of the expiration of applicable statutes of limitations for prior year returns, the resolution of audits, the filing of amended returns with respect to prior tax years and/or tax law or certain other discrete changes affecting our deferred tax liability.


6


Reconciliation of Consolidated Statement of Income Items (Dollars in millions, except per share data)
Three Months Ended April 2, 2023
Gross margin
Selling, general and administrative expenses (1)
Research and development expenses (1)
Operating margin (2)
Income before income taxes Income tax expense Effective income tax rate Diluted earnings per share from continuing operations
GAAP Basis 55.1% 32.7% 5.8% 16.2% $97.5 $20.2 20.7% $1.63
Adjustments
Restructuring, restructuring related and impairment items (A) 1.2 (0.2) 1.7 12.0 1.8 0.22
Acquisition, integration and divestiture related items (B) (0.4) 0.4 3.1 0.1 0.06
Other items 0.00
ERP implementation (0.2) 0.2 1.2 0.3 0.02
MDR (1.4) 1.5 10.3 0.22
Intangible amortization expense 3.1 (2.6) 5.8 41.6 2.0 0.84
Tax adjustments (4.8) 0.10
Adjustments total 4.3 (3.2) (1.6) 9.6 68.2 (0.6) 1.46
Adjusted basis 59.4% 29.5% 4.2% 25.8% $165.7 $19.6 11.8% $3.09

Three Months Ended March 27, 2022
Gross margin
Selling, general and administrative expenses (1)
Research and development expenses (1)
Operating margin (2)
Income before income taxes Income tax expense Effective income tax rate Diluted earnings per share from continuing operations
GAAP Basis 54.0% 31.8% 5.7% 16.1% $93.3 $16.0 17.1% $1.63
Adjustments
Restructuring, restructuring related and impairment items (A) 1.0 1.4 8.8 1.1 0.16
Acquisition, integration and divestiture related items (B) 0.2 (0.1) 0.01
Other items 0.00
ERP Implementation 0.00
MDR (1.9) 1.9 12.1 0.25
Intangible amortization expense 3.4 (3.0) 6.3 40.6 1.4 0.83
Tax adjustments
Adjustments total 4.4 (3.0) (1.9) 9.6 61.7 2.4 1.25
Adjusted basis 58.4% 28.8% 3.8% 25.7% $155.0 $18.4 11.9% $2.88


Notes: (1) Selling, general and administrative expenses and research and development expenses are shown as a percentage of net revenues.
(2) Operating margin defined as Income from continuing operations before interest, loss on extinguishment of debt and taxes as a percentage of net revenues.

Totals may not sum due to rounding.



7


Tickmarks to Reconciliation Tables
(A)Restructuring, restructuring related and impairment items – For the three months ended April 2, 2023, pre-tax restructuring charges were $2.2 million and restructuring related charges were $9.8 million. For the three months ended March 27, 2022, pre-tax restructuring charges were $0.9 million, restructuring related charges were $6.4 million, and impairment charges were $1.5 million.
(B)Acquisition, integration and divestiture related items – For the three months ended April 2, 2023, these charges related to the acquisition of Standard Bariatrics, Inc. For the three months ended March 27, 2022, these charges related to the acquisition of Z-Medica, LLC.

8



ABOUT TELEFLEX INCORPORATED

Teleflex is a global provider of medical technologies designed to improve the health and quality of people’s lives. We apply purpose driven innovation - a relentless pursuit of identifying unmet clinical needs - to benefit patients and healthcare providers. Our portfolio is diverse, with solutions in the fields of vascular access, interventional cardiology and radiology, anesthesia, emergency medicine, surgical, urology and respiratory care. Teleflex employees worldwide are united in the understanding that what we do every day makes a difference. For more information, please visit teleflex.com.
Teleflex is the home of Arrow®, Deknatel®, LMA®, Pilling®, QuikClot®, Rusch®, UroLift®, and Weck® - trusted brands united
by a common sense of purpose.

CAUTION CONCERNING FORWARD-LOOKING INFORMATION
This press release contains forward-looking statements, including, but not limited to, statements regarding the continued integration of Standard Bariatrics; forecasted 2023 GAAP and constant currency revenue growth and GAAP and adjusted diluted earnings per share; our estimates regarding the projected impact of foreign currency exchange rate fluctuations on our 2023 financial results; and our estimates with regard to the projected impacts of the divestiture of a significant portion of our respiratory business on our financial results. Actual results could differ materially from those in the forward-looking statements due to, among other things, delays or cancellations in shipments; demand for and market acceptance of new and existing products; our inability to provide products to our customers, which may be due to, among other things, events that impact key distributors, suppliers and third-party vendors that sterilize our products; our inability to integrate acquired businesses into our operations, realize planned synergies and operate such businesses profitably in accordance with our expectations; the inability of acquired businesses to generate revenues in accordance with our expectations; our inability to effectively execute our restructuring plans and programs; our inability to realize anticipated savings from restructuring plans and programs; the impact of healthcare reform legislation and proposals to amend, replace or repeal the legislation; changes in Medicare, Medicaid and third party coverage and reimbursements; the impact of enacted tax legislation and related regulations; competitive market conditions and resulting effects on revenues and pricing; increases in raw material costs that cannot be recovered in product pricing; global economic factors, including currency exchange rates, interest rates, trade disputes, sovereign debt issues and international conflicts and hostilities, such as the ongoing geopolitical conflict between Russia and Ukraine; public health epidemics, including COVID-19; difficulties in entering new markets; general economic conditions; and other factors described or incorporated in our filings with the Securities and Exchange Commission, including our most recently filed Annual Report on Form 10-K. We expressly disclaim any obligation to update forward-looking statements, except as otherwise specifically stated by us or as required by law or regulation.
9


TELEFLEX INCORPORATED
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
  Three Months Ended
  April 2, 2023 March 27, 2022
 
Net revenues $ 710,932  $ 641,715 
Cost of goods sold 319,552  295,482 
Gross profit 391,380  346,233 
Selling, general and administrative expenses 232,716  203,932 
Research and development expenses 41,469  36,360 
Restructuring and impairment charges 2,221  2,405 
Income from continuing operations before interest and taxes 114,974  103,536 
Interest expense 18,337  10,418 
Interest income (843) (222)
Income from continuing operations before taxes 97,480  93,340 
Taxes on income from continuing operations 20,184  15,973 
Income from continuing operations 77,296  77,367 
Operating loss from discontinued operations (711) (294)
Tax benefit on operating loss from discontinued operations (163) (68)
Loss from discontinued operations (548) (226)
Net income $ 76,748  $ 77,141 
Earnings per share:  
Basic:  
Income from continuing operations $ 1.65  $ 1.65 
Loss from discontinued operations (0.02) — 
Net income $ 1.63  $ 1.65 
Diluted:
Income from continuing operations $ 1.63  $ 1.63 
Loss from discontinued operations (0.01) — 
Net income $ 1.62  $ 1.63 
Weighted average common shares outstanding  
Basic 46,949  46,876 
Diluted 47,285  47,402 

10


TELEFLEX INCORPORATED
CONSOLIDATED BALANCE SHEETS
(Unaudited)
April 2, 2023 December 31, 2022
(Dollars in thousands)
ASSETS
Current assets
Cash and cash equivalents $ 264,138  $ 292,034 
Accounts receivable, net 410,020  408,834 
Inventories 614,106  578,507 
Prepaid expenses and other current assets 134,948  125,084 
Prepaid taxes 4,842  6,524 
Total current assets 1,428,054  1,410,983 
Property, plant and equipment, net 458,861  447,205 
Operating lease assets 126,773  131,211 
Goodwill 2,547,840  2,536,730 
Intangible assets, net 2,269,535  2,306,165 
Deferred tax assets 6,479  6,402 
Other assets 80,380  89,367 
Total assets $ 6,917,922  $ 6,928,063 
LIABILITIES AND EQUITY
Current liabilities
Current borrowings $ 87,500  $ 87,500 
Accounts payable 136,239  126,807 
Accrued expenses 123,451  140,644 
Payroll and benefit-related liabilities 102,081  133,092 
Accrued interest 16,862  5,332 
Income taxes payable 30,176  24,736 
Other current liabilities 79,403  63,381 
Total current liabilities 575,712  581,492 
Long-term borrowings 1,549,474  1,624,023 
Deferred tax liabilities 388,185  388,886 
Pension and postretirement benefit liabilities 30,924  31,394 
Noncurrent liability for uncertain tax positions 6,464  5,805 
Noncurrent operating lease liabilities 115,838  120,437 
Other liabilities 141,072  154,058 
Total liabilities 2,807,669  2,906,095 
Commitments and contingencies
Total shareholders' equity 4,110,253  4,021,968 
Total liabilities and shareholders' equity $ 6,917,922  $ 6,928,063 

11


TELEFLEX INCORPORATED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended
April 2, 2023 March 27, 2022
(Dollars in thousands)
Cash flows from operating activities of continuing operations:
Net income $ 76,748  $ 77,141 
Adjustments to reconcile net income to net cash provided by operating activities:
Loss from discontinued operations 548  226 
Depreciation expense 18,287  17,317 
Intangible asset amortization expense 41,540  40,597 
Deferred financing costs and debt discount amortization expense 846  1,048 
Changes in contingent consideration 2,447  (30)
Assets impairment charges —  1,497 
Stock-based compensation 7,015  5,302 
Deferred income taxes, net 2,092  409 
Interest benefit on swaps designated as net investment hedges (5,108) (4,848)
Other (427) (2,093)
Changes in assets and liabilities, net of effects of acquisitions and disposals:
Accounts receivable 1,339  (27,805)
Inventories (30,099) (19,852)
Prepaid expenses and other assets 2,752  4,830 
Accounts payable, accrued expenses and other liabilities (40,856) (36,978)
Income taxes receivable and payable, net 7,225  5,341 
   Net cash provided by operating activities from continuing operations 84,349  62,102 
Cash flows from investing activities of continuing operations:
Expenditures for property, plant and equipment (21,835) (13,078)
Proceeds from sale of business and assets —  262 
Payments for businesses and intangibles acquired, net of cash acquired (64) — 
Net cash used in investing activities from continuing operations (21,899) (12,816)
Cash flows from financing activities of continuing operations:
Reduction in borrowings (75,125) — 
Net payments from share based compensation plans and related tax impacts (2,433) (4,941)
Payments for contingent consideration (64) (73)
Dividends paid (15,969) (15,946)
Net cash used in financing activities from continuing operations (93,591) (20,960)
Cash flows from discontinued operations:
Net cash used in operating activities (285) (119)
Net cash used in discontinued operations (285) (119)
Effect of exchange rate changes on cash and cash equivalents 3,530  (6,635)
Net (decrease) increase in cash and cash equivalents (27,896) 21,572 
Cash and cash equivalents at the beginning of the period 292,034  445,084 
Cash and cash equivalents at the end of the period $ 264,138  $ 466,656 

12


Contacts:
Teleflex Incorporated:
Lawrence Keusch
Vice President, Investor Relations and Strategy Development

investors.teleflex.com
610-948-2836
13
EX-99.2 3 exhibit992to5-4x20238xkr.htm EX-99.2 exhibit992to5-4x20238xkr
Q1 2023 Earnings Conference Call Teleflex Incorporated Exhibit 99.2


 
2 The release, accompanying slides, and replay webcast are available online at www.teleflex.com (click on Investors) An audio replay of the call will be available beginning at 11:00 am Eastern Time on May 4, 2023 either on the Teleflex website or by telephone. The call can be accessed by dialing 1 866 813 9403 (U.S.) or +44 204 525 0658 (all other locations). The confirmation code is 650329. Conference Call Logistics


 
3 Today’s Speakers Liam Kelly Chairman, President and CEO Lawrence Keusch VP, Investor Relations and Strategy Development Thomas Powell Executive VP and CFO


 
4 This presentation contains forward-looking statements, including, but not limited to our expectations with respect to the commercial launch of certain products within our Interventional product category; our expectation that we will continue to execute on our strategy to drive durable growth with investment in organic growth opportunities, margin expansion, and seek to deploy capital for M&A; our forecasted 2023 GAAP and constant currency revenue growth, GAAP and adjusted gross and operating margins and GAAP and adjusted earnings per share and, in each case, our estimates with respect to the items expected to impact those forecasted results; and other matters which inherently involve risks and uncertainties which could cause actual results to differ from those projected or implied in the forward–looking statements. These risks and uncertainties are addressed in our SEC filings, including our most recent Form 10-K. We expressly disclaim any obligation to update forward-looking statements, except as otherwise specifically stated by us or as required by law or regulation. Note on Forward-Looking Statements Note on Non-GAAP Financial Measures Additional Notes This document contains certain highlights with respect to our first quarter 2023 and developments and does not purport to be a complete summary thereof. Accordingly, we encourage you to read our Earnings Release for the quarter ended April 2, 2023 located in the investor section of our website at www.teleflex.com and our Quarterly Report on Form 10-Q for the quarter ended April 2, 2023 to be filed with the Securities and Exchange Commission. Unless otherwise noted, the following slides reflect continuing operations. This presentation refers to certain non-GAAP financial measures, including, but not limited to, constant currency revenue growth, adjusted diluted earnings per share, adjusted gross and operating margins and adjusted tax rate. These non-GAAP financial measures should not be considered replacements for, and should be read together with, the most comparable GAAP financial measures. Tables reconciling these non-GAAP financial measures to the most comparable GAAP financial measures are contained within this presentation and the appendices at the end of this presentation.


 
5 Liam Kelly - Chairman, President and CEO Executive Overview


 
6 Q1'23 Highlights ◦ Q1'23 constant currency revenue grew 13.2% year-over-year, including five extra shipping days compared to the prior year period ◦ Q1'23 adjusted gross margin increased 100 bps and adjusted operating margin improved 10 bps year-over-year ◦ Q1'23 adjusted EPS of $3.09, a 7.3% increase year-over-year Q1 Performance Summary 2023 Financial Guidance Note: See tables appearing in this presentation and the appendices hereto for reconciliations of non-GAAP financial information. ◦ Increased 2023 constant currency revenue growth guidance to 5.00% to 6.25% ◦ Reiterated 2023 adjusted earnings per share guidance of $13.00 to $13.60


 
7 Q1'23 Segment Revenue Review Three Months Ended % Increase/ Decrease Dollars in Millions April 2, 2023 March 27, 2022 Reported Revenue Growth Currency Impact Constant Currency Growth Americas $411.9 $378.0 9.0% (0.2)% 9.2% EMEA $143.3 $136.9 4.7% (5.8)% 10.5% Asia $78.7 $69.2 13.8% (9.0)% 22.8% OEM $77.0 $57.6 33.5% (1.0)% 34.5% Consolidated $710.9 $641.7 10.8% (2.4)% 13.2%


 
8 Q1'23 Global Product Category Revenue Review Three Months Ended % Increase/ Decrease Dollars in Millions April 2, 2023 March 27, 2022 Reported Revenue Growth Currency Impact Constant Currency Growth Vascular Access $177.7 $166.1 6.9% (2.3)% 9.2% Interventional $116.9 $96.9 20.7% (2.6)% 23.3% Anesthesia $93.3 $86.9 7.3% (2.6)% 9.9% Surgical $99.0 $89.7 10.4% (3.9)% 14.3% Interventional Urology $75.4 $74.9 0.6% (0.3)% 0.9% OEM $77.0 $57.7 33.5% (1.0)% 34.5% Other(1) $71.6 $69.5 3.1% (3.3)% 6.4% Consolidated $710.9 $641.7 10.8% (2.4)% 13.2% ◦ 1. Includes revenues generated from sales of the Company’s respiratory and urology products (other than interventional urology products). (1) Includes revenues generated from the Company’s respiratory and urology products (other than interventional urology products), and products sold to Medline pursuant to the manufacturing and supply transition agreement executed in June of 2021.


 
9 Clinical and Commercial Updates Expanding Titan SGS® Stapler portfolio • Supply agreement with W.L. Gore & Associates, Inc. to use GORE® SEAMGUARD® Bioabsorbable Staple Line Reinforcement buttress material with the Titan SGS® Stapler • GORE® SEAMGUARD® Bioabsorbabale Staple Line Reinforcement is a synthetic buttressing material engineered to reduce leaks and bleeding and strengthen the staple line QuikClot Control+® Hemostatic Device Label Expansion • Received FDA clearance for temporary control of mild and moderate bleeding in cardiac surgical procedures and to control bone surface bleeding following a sternotomy • Enables device utilization across a wider patient population and breadth of surgical procedures New Interventional product activity • GuideLiner® CoastTM Catheter launch; TriumphTM Catheter launch Q2 2023 • Expanding structural heart portfolio with recent Langston® Dual Lumen Catheter launch; Wattson® Temporary Pacing Guidewire upcoming Note: GORE and SEAMGUARD are trademarks of W.L. Gore & Associates, Inc. CAUTION: Federal (USA) law restricts these devices to sale or use by or on the order of a physician. Refer to the Instructions for Use for a complete listing of the indications, contraindications, warnings, and precautions.


 
10 Clinical and Commercial Updates Launched new devices to enhance PICC insertion procedures • Next-generation Arrow® VPS Rhythm® DLX Device provides real-time PICC catheter tip location information using patient’s cardiac electrical activity. Optional integrated ultrasound is available to assist with vascular access • The VPS Rhythm® DLX Device with TipTackerTM Technology eliminates the need for confirmatory x-ray • The new Arrow® PICC preloaded with the NaviCurveTM Stylet features an anatomical curve and flexible tip that are designed to self-orient to patient anatomy for enhanced PICC advancement into the superior vena cava for successful insertion CAUTION: Federal (USA) law restricts these devices to sale or use by or on the order of a physician. Refer to the Instructions for Use for a complete listing of the indications, contraindications, warnings, and precautions.


 
11 Thomas Powell - Executive VP and CFO Financial Overview


 
12 Q1'23 Financial Review ◦ GAAP gross margin of 55.1% vs. 54.0% in the prior year period ◦ Adjusted gross margin of 59.4%, up 100 bps year-over-year ◦ GAAP operating margin of 16.2% vs. 16.1% in prior year period ◦ Adjusted operating margin of 25.8%, up 10 bps year-over-year Gross margin Operating margin Global revenue growth ◦ GAAP tax rate of 20.7% vs. 17.1% in prior year period ◦ Adjusted tax rate of 11.8% vs. 11.9% in prior year period Effective tax rate ◦ GAAP EPS of $1.63 in both current and prior year period ◦ Adjusted EPS of $3.09, up 7.3% year-over-year Earnings per share ◦ Revenue increased 10.8% year-over-year on a GAAP basis ◦ Revenue increased 13.2% year-over-year on a constant currency basis Note: See appendices for reconciliations of non-GAAP financial information.


 
13 2023 Financial Guidance Summary 2023 Guidance Low High GAAP Revenue Growth 4.65% 5.90% Impact of Foreign Exchange Rate Fluctuations (0.35)% (0.35)% Constant Currency Revenue Growth (1) 5.00% 6.25% Adjusted Gross Margin 59.00% 59.50% Adjusted Operating Margin 26.00% 26.75% Adjusted EPS $13.00 $13.60 Adjusted EPS % Growth (0.5)% 4.1% Note: See appendices for reconciliations of non-GAAP information (1) Constant currency revenue growth includes a 0.2% headwind for the expected decrease in MSTA revenue associated with our prior divestiture of respiratory assets. Note: See appendices for reconciliations of non-GAAP financial information.


 
14 Key Takeaways Q1 results reflect a continuation of momentum exiting 2022 with a solid revenue performance, stability of our diversified product portfolio, and healthy margins Solid start to the year keeps us well-positioned to deliver on our financial guidance for 2023 Will continue to execute on our strategy to drive durable growth with investment in organic growth opportunities, margin expansion, and seek to deploy capital for M&A


 
15 15 15 Thank You Teleflex, the Teleflex logo, are trademarks or registered trademarks of Teleflex Incorporated or its affiliates, in the U.S. and/or other countries. © 2023 Teleflex Incorporated. All rights reserved. MCI-2021-0563.


 
16 Appendices


 
17 Non-GAAP Financial Measures The presentation to which these appendices are attached and the following appendices include, among other things, tables reconciling the following applicable non-GAAP financial measures to the most comparable GAAP financial measure: ◦ Constant currency revenue growth. This non-GAAP measure is based upon net revenues, adjusted to eliminate the impact of translating the results of international subsidiaries at different currency exchange rates from period to period. The impact of changes in foreign currency may vary significantly from period to period, and generally are outside of the control of our management. We believe that this measure facilitates a comparison of our operating performance exclusive of currency exchange rate fluctuations that do not reflect our underlying performance or business trends. ◦ Adjusted diluted earnings per share. This non-GAAP measure is based upon diluted earnings per share from continuing operations, the most directly comparable GAAP measure, adjusted to exclude, depending on the period presented, the impact of (i) restructuring, restructuring related and impairment items; (ii) acquisition, integration and divestiture related items; (iii) “other items” identified in note (C) to the reconciliation tables appearing in Appendices A1 and A2, as applicable; (iv) costs incurred in connection with our implementation of a new global ERP solution and related IT transition costs; (v) certain costs associated with the registration of medical devices under the European Union Medical Device Regulation; (vi) intangible amortization expense; and (vii) tax adjustments. Management does not believe that any of the excluded items are indicative of our underlying core performance or business trends. ◦ Adjusted gross profit and margin. These measures exclude, depending on the period presented, the impacts of (i) restructuring, restructuring related and impairment items, (ii) acquisition, integration and divestiture related items and (iii) “other items” identified in note (C) to the reconciliation tables appearing in Appendices A1 and A2, as applicable. ◦ Adjusted operating profit and margin. These measures exclude, depending on the period presented, the impact of (i) restructuring, restructuring related and impairment items; (ii) acquisitions, integration and divestiture related items; (iii) “other items” identified in note (C) to the reconciliation tables appearing in Appendices A1 and A2, as applicable; (iv) costs incurred in connection with our implementation of a new global ERP solution and related IT transition costs; (v) intangible amortization expense; and (vi) certain costs associated with the registration of medical devices under the European Union Medical Device Regulation. ◦ Adjusted tax rate. This measure is the percentage of the Company’s adjusted taxes on income from continuing operations to its adjusted income from continuing operations before taxes. Adjusted taxes on income from continuing operations excludes, depending on the period presented, the impact of tax benefits or costs associated with (i) restructuring, restructuring related and impairment items; (ii) acquisition, integration and divestiture related items; (iii) “other items” identified in note (C) to the reconciliation tables appearing in Appendices A1 and A2, as applicable; (iv) costs incurred in connection with our implementation of a new global ERP solution and related IT transition costs; (v) certain costs associated with the registration of medical devices under the European Union Medical Device Regulation; (vi) intangible amortization expense; and (vii) tax adjustments.


 
18 Non-GAAP Adjustments The following is an explanation of certain of the adjustments that are applied with respect to one or more of the non-GAAP financial measures that appear in the presentation to which these appendices are attached: Restructuring, restructuring related and impairment items - Restructuring programs involve discrete initiatives designed to, among other things, consolidate or relocate manufacturing, administrative and other facilities, outsource distribution operations, improve operating efficiencies and integrate acquired businesses. Depending on the specific restructuring program involved, our restructuring charges may include employee termination, contract termination, facility closure, employee relocation, equipment relocation, outplacement and other exit costs associated with the restructuring program. Restructuring related charges are directly related to our restructuring programs and consist of facility consolidation costs, including accelerated depreciation expense related to facility closures, costs to transfer manufacturing operations between locations, and retention bonuses offered to certain employees as an incentive for them to remain with our company after completion of the restructuring program. Impairment charges occur if, due to events or changes in circumstances, we determine that the carrying value of an asset exceeds its fair value. Impairment charges do not directly affect our liquidity, but could have a material adverse effect on our reported financial results. Acquisition, integration and divestiture related items - Acquisition and integration expenses are incremental charges, other than restructuring or restructuring related expenses, that are directly related to specific business or asset acquisition transactions. These charges may include, among other things, professional, consulting and other fees; systems integration costs; legal entity restructuring expense; inventory step-up amortization (amortization, through cost of goods sold, of the increase in fair value of inventory resulting from a fair value calculation as of the acquisition date); fair value adjustments to contingent consideration liabilities; and bridge loan facility and backstop financing fees in connection with loan facilities that ultimately were not utilized. Divestiture related activities involve specific business or asset sales. Depending primarily on the terms of a divestiture transaction, the carrying value of the divested business or assets on our financial statements and other costs we incur as a direct result of the divestiture transaction, we may recognize a gain or loss in connection with the divestiture related activities. Other items - These are discrete items that occur sporadically and can affect period-to-period comparisons. European medical device regulation - The European Union (“EU”) has adopted the EU Medical Device Regulation (“MDR”), which replaces the existing Medical Devices Directive (“MDD”) and imposes more stringent requirements for the marketing and sale of medical devices in the EU, including requirements affecting clinical evaluations, quality systems and post-market surveillance. Manufacturers of currently marketed medical devices had until May 2020 to meet the MDR requirements, although certain devices that previously satisfied MDD requirements can continue to be placed on the EU market until May 2024, subject to certain limitations. Significantly, the MDR will require the re-registration of previously approved medical devices. As a result, Teleflex will incur expenditures in connection with the new registration of medical devices that previously had been registered under the MDD. Therefore, these expenditures are not considered to be ordinary course expenditures in connection with regulatory matters (in contrast, no adjustment has been made to exclude expenditures related to the registration of medical devices that were not registered previously under the MDD).


 
19 Non-GAAP Adjustments Intangible amortization expense - Certain intangible assets, including customer relationships, intellectual property, distribution rights, trade names and non-competition agreements, initially are recorded at historical cost and then amortized over their respective estimated useful lives. The amount of such amortization can vary from period to period as a result of, among other things, business or asset acquisitions or dispositions. ERP implementation - These adjustments represent direct and incremental costs incurred in connection with our implementation of a new global enterprise resource planning (“ERP”) solution and related IT transition costs. An implementation of this scale is a significant undertaking and will require substantial time and attention of management and key employees. The associated costs do not represent normal and recurring operating expenses and will be inconsistent in amounts and frequency making it difficult to contribute to a meaningful evaluation of our operating performance. Tax adjustments - These adjustments represent the impact of the expiration of applicable statutes of limitations for prior year returns, the resolution of audits, the filing of amended returns with respect to prior tax years and/or tax law or certain other discrete changes affecting our deferred tax liability.


 
20 Notes: (1) Selling, general and administrative expenses and research and development expenses are shown as a percentage of net revenues. (2) Operating margin defined as Income from continuing operations before interest, loss on extinguishment of debt and taxes as a percentage of net revenues. See slide titled Non-GAAP Adjustments included at the beginning of the appendices to this presentation for Non-GAAP definitions. Totals may not sum due to rounding. Appendix A1 – Reconciliation of Consolidated Statement of Income Items (Dollars in millions, except per share data) Three Months Ended April 2, 2023 Gross margin Selling, general and administrative expenses (1) Research and development expenses (1) Operating margin (2) Income before income taxes Income tax expense Effective income tax rate Diluted earnings per share from continuing operations GAAP Basis 55.1% 32.7% 5.8% 16.2% $97.5 $20.2 20.7% $1.63 Adjustments Restructuring, restructuring related and impairment items (A) 1.2 — (0.2) 1.7 12.0 1.8 0.22 Acquisition, integration and divestiture related items (B) — (0.4) — 0.4 3.1 0.1 0.06 Other items — — — — — — — ERP Implementation — (0.2) — 0.2 1.2 0.3 0.02 MDR — — (1.4) 1.5 10.3 — 0.22 Intangible amortization expense 3.1 (2.6) — 5.8 41.6 2.0 0.84 Tax adjustments — — — — — (4.8) 0.10 Adjustments total 4.3 (3.2) (1.6) 9.6 68.2 (0.6) 1.46 Adjusted basis 59.4% 29.5% 4.2% 25.8% $165.7 $19.6 11.8% $3.09


 
21 Appendix A2 – Reconciliation of Consolidated Statement of Income Items (Dollars in millions, except per share data) Three Months Ended March 27, 2022 Gross margin Selling, general and administrative expenses (1) Research and development expenses (1) Operating margin (2) Income before income taxes Income tax expense Effective income tax rate Diluted earnings per share from continuing operations GAAP Basis 54.0% 31.8% 5.7% 16.1% $93.3 $16.0 17.1% $1.63 Adjustments Restructuring, restructuring related and impairment items (A) 1.0 — — 1.4 8.8 1.1 0.16 Acquisition, integration and divestiture related items (B) — — — — 0.2 (0.1) 0.01 Other items — — — — — — 0.00 ERP Implementation — — — — — — 0.00 MDR — — (1.9) 1.9 12.1 — 0.25 Intangible amortization expense 3.4 (3.0) — 6.3 40.6 1.4 0.83 Tax adjustments — — — — — — 0.00 Adjustments total 4.4 (3.0) (1.9) 9.6 61.7 2.4 1.25 Adjusted basis 58.4% 28.8% 3.8% 25.7% $155.0 $18.4 11.9% $2.88 Notes: (1) Selling, general and administrative expenses and research and development expenses are shown as a percentage of net revenues. (2) Operating margin defined as Income from continuing operations before interest, loss on extinguishment of debt and taxes as a percentage of net revenues. See slide titled Non-GAAP Adjustments included at the beginning of the appendices to this presentation for Non-GAAP definitions. Totals may not sum due to rounding.


 
22 Appendix A tickmarks (A) Restructuring, restructuring related and impairment items – For the three months ended April 2, 2023, pre-tax restructuring charges were $2.2 million and restructuring related charges were $9.8 million. For the three months ended March 27, 2022, pre-tax restructuring charges were $0.9 million, restructuring related charges were $6.4 million, and impairment charges were $1.5 million. (B) Acquisition, integration and divestiture related items – For the three months ended April 2, 2023, these charges related to the acquisition of Standard Bariatrics, Inc. For the three months ended March 27, 2022, these charges related to the Z-Medica, LLC acquisition.


 
23 Appendix B - 2023 Adj. Gross and Operating Margin Guidance Reconciliation Low High Forecasted GAAP Gross Margin 55.10% 55.60% Estimated restructuring, restructuring related and impairment items 0.80% 0.80% Estimated acquisition, integration, and divestiture related items —% —% Estimated intangible amortization expense 3.10% 3.10% Forecasted Adjusted Gross Margin 59.00% 59.50% Low High Forecasted GAAP Operating Margin 17.90% 18.65% Estimated restructuring, restructuring related and impairment items 1.00% 1.00% Estimated acquisition, integration, and divestiture related items 0.40% 0.40% Estimated other items —% —% Estimated ERP implementation 0.10% 0.10% Estimated MDR 1.00% 1.00% Estimated intangible amortization expense 5.60% 5.60% Forecasted Adjusted Operating Margin 26.00% 26.75%


 
24 Appendix C – Reconciliation of 2023 Adjusted Earnings Per Share Guidance Low High Forecasted GAAP Diluted Earnings Per Share from continuing operations $8.14 $8.74 Estimated restructuring, restructuring related and impairment items, net of tax $0.60 $0.60 Estimated acquisition, integration, and divestiture related items, net of tax $0.19 $0.19 Estimated other items, net of tax $0.10 $0.10 Estimated ERP implementation $0.05 $0.05 Estimated MDR, net of tax $0.61 $0.61 Estimated intangible amortization expense, net of tax $3.31 $3.31 Forecasted Adjusted Diluted Earnings Per Share from continuing operations, net of tax $13.00 $13.60