Teleflex Incorporated (NYSE: TFX) (the “Company”) today announced
financial results for the second quarter ended July 2, 2023.
Second quarter financial
summary
- Revenues of $743.3 million, up 5.5% compared to the prior
year period; up 5.9% on a constant currency basis
- GAAP diluted EPS from continuing operations of $2.35, compared
to $2.23 in the prior year period
- Adjusted diluted EPS from continuing operations of $3.41,
compared to $3.39 in the prior year period
2023 guidance summary
- Raising GAAP revenue growth guidance to 5.80% to 6.55%
- Raising the low end of constant currency revenue growth
guidance to 5.50% to 6.25%
- Lowering GAAP EPS from continuing operations guidance to $7.33
to $7.93
- Maintaining adjusted diluted EPS from continuing operations
guidance of $13.00 to $13.60, reflecting estimated dilution from
the acquisition of Palette Life Sciences AB
“Our solid second quarter performance reflects the strength of
our diversified product portfolio and global execution,” said Liam
Kelly, Teleflex’s Chairman, President and Chief Executive Officer.
“The global environment was stable during the second quarter, and
we expect a continuation in the second half of 2023. In addition,
we took an important step forward in our durable growth strategy
with the agreement to acquire Palette Life Sciences AB. The
acquisition of Palette provides us with a high growth portfolio
featuring a sculptable rectal spacer that will expand our
Interventional Urology franchise with complementary adjunctive
therapy for prostate cancer, which we expect will contribute
meaningfully to our growth in the coming years.”
NET REVENUE BY SEGMENTThe following table
provides information regarding net revenues in each of the
Company’s reportable operating segments for the three and six
months ended July 2, 2023 and June 26, 2022 on both a
GAAP and constant currency basis.
|
Three Months Ended |
|
% Increase / (Decrease) |
|
July 2, 2023 |
|
June 26, 2022 |
|
ReportedRevenueGrowth |
|
CurrencyImpact |
|
ConstantCurrencyRevenue Growth |
Americas |
$424.7 |
|
$412.7 |
|
2.9% |
|
(0.1)% |
|
3.0% |
EMEA |
147.8 |
|
145.2 |
|
1.8% |
|
1.1% |
|
0.7% |
Asia |
86.7 |
|
76.6 |
|
13.1% |
|
(6.0)% |
|
19.1% |
OEM |
84.1 |
|
70.0 |
|
20.2% |
|
0.4% |
|
19.8% |
Consolidated |
$743.3 |
|
$704.5 |
|
5.5% |
|
(0.4)% |
|
5.9% |
|
Six Months Ended |
|
% Increase / (Decrease) |
|
July 2, 2023 |
|
June 26, 2022 |
|
ReportedRevenueGrowth |
|
CurrencyImpact |
|
ConstantCurrencyRevenue Growth |
Americas |
$836.5 |
|
$790.7 |
|
5.8% |
|
(0.2)% |
|
6.0% |
EMEA |
291.2 |
|
282.1 |
|
3.2% |
|
(2.1)% |
|
5.3% |
Asia |
165.4 |
|
145.8 |
|
13.5% |
|
(7.3)% |
|
20.8% |
OEM |
161.1 |
|
127.7 |
|
26.2% |
|
(0.2)% |
|
26.4% |
Consolidated |
$1,454.2 |
|
$1,346.3 |
|
8.0% |
|
(1.3)% |
|
9.3% |
|
|
|
|
|
|
|
|
|
|
NET REVENUE BY GLOBAL PRODUCT CATEGORYThe
following table provides information regarding net revenues in each
of the Company’s global product categories for the three and six
months ended July 2, 2023 and June 26, 2022 on both a
GAAP and constant currency basis.
|
Three Months Ended |
|
% Increase / (Decrease) |
|
July 2, 2023 |
|
June 26, 2022 |
|
ReportedRevenueGrowth |
|
CurrencyImpact |
|
ConstantCurrencyRevenue Growth |
Vascular Access |
$173.8 |
|
$163.9 |
|
6.0% |
|
(0.6)% |
|
6.6% |
Interventional |
124.8 |
|
114.4 |
|
9.1% |
|
(0.5)% |
|
9.6% |
Anesthesia |
100.8 |
|
104.7 |
|
(3.7)% |
|
(0.1)% |
|
(3.6)% |
Surgical |
106.0 |
|
99.6 |
|
6.3% |
|
(1.4)% |
|
7.7% |
Interventional Urology |
77.8 |
|
79.8 |
|
(2.5)% |
|
(0.2)% |
|
(2.3)% |
OEM |
84.1 |
|
70.0 |
|
20.2% |
|
0.4% |
|
19.8% |
Other |
76.0 |
|
72.1 |
|
5.3% |
|
0.5% |
|
4.8% |
Consolidated |
$743.3 |
|
$704.5 |
|
5.5% |
|
(0.4)% |
|
5.9% |
|
Six Months Ended |
|
% Increase / (Decrease) |
|
July 2, 2023 |
|
June 26, 2022 |
|
ReportedRevenueGrowth |
|
CurrencyImpact |
|
ConstantCurrencyRevenue Growth |
Vascular Access |
$351.4 |
|
$330.1 |
|
6.5% |
|
(1.4)% |
|
7.9% |
Interventional |
241.7 |
|
211.3 |
|
14.4% |
|
(1.5)% |
|
15.9% |
Anesthesia |
194.2 |
|
191.6 |
|
1.3% |
|
(1.1)% |
|
2.4% |
Surgical |
205.0 |
|
189.3 |
|
8.3% |
|
(2.5)% |
|
10.8% |
Interventional Urology |
153.2 |
|
154.7 |
|
(1.0)% |
|
(0.3)% |
|
(0.7)% |
OEM |
161.1 |
|
127.7 |
|
26.2% |
|
(0.2)% |
|
26.4% |
Other |
147.6 |
|
141.6 |
|
4.2% |
|
(1.4)% |
|
5.6% |
Consolidated |
$1,454.2 |
|
$1,346.3 |
|
8.0% |
|
(1.3)% |
|
9.3% |
|
|
|
|
|
|
|
|
|
|
OTHER FINANCIAL HIGHLIGHTS
- Depreciation expense, amortization of intangible assets and
deferred financing charges for the six months ended July 2,
2023 totaled $122.0 million compared to $116.7 million for the
prior year period.
- Cash and cash equivalents at July 2, 2023 were $250.8
million compared to $292.0 million at December 31, 2022.
- Net accounts receivable at July 2, 2023 were $429.3
million compared to $408.8 million at December 31, 2022.
- Inventories at July 2, 2023 were $631.6 million compared
to $578.5 million at December 31, 2022.
2023 OUTLOOK The Company increased its full
year 2023 GAAP revenue growth outlook to 5.80% to 6.55%, reflecting
our expectation that foreign exchange rate fluctuations will not
have an impact on our results. On a constant currency basis, the
Company increased the low end of the range for its full year 2023
revenue growth outlook for a revised range of 5.50% to 6.25%
year-over-year.
The Company lowered its full year 2023 GAAP diluted earnings per
share from continuing operations guidance to $7.33 to $7.93. 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 and reflecting
estimated dilution from the Palette acquisition.
Forecasted 2023 Constant Currency Revenue Growth
Reconciliation
|
Low |
|
High |
Forecasted 2023 GAAP revenue
growth |
5.80% |
|
6.55% |
Estimated impact of foreign
currency exchange rate fluctuations |
0.30% |
|
0.30% |
Forecasted 2023 constant
currency revenue growth |
5.50% |
|
6.25% |
|
|
|
|
Forecasted 2023 Adjusted Diluted Earnings Per Share From
Continuing Operations Reconciliation
|
Low |
|
High |
Forecasted GAAP diluted
earnings per share from continuing operations |
$7.33 |
|
$7.93 |
Restructuring, restructuring
related and impairment items, net of tax |
$0.61 |
|
$0.61 |
Acquisition, integration and
divestiture related items, net of tax |
$0.22 |
|
$0.22 |
Other items, net of tax |
$0.10 |
|
$0.10 |
Pension termination and
related charges, net of tax |
$0.71 |
|
$0.71 |
ERP Implementation, net of
tax |
$0.05 |
|
$0.05 |
MDR, net of tax |
$0.59 |
|
$0.59 |
Intangible amortization
expense, net of tax |
$3.39 |
|
$3.39 |
Forecasted adjusted diluted
earnings per share from continuing operations, net of tax |
$13.00 |
|
$13.60 |
|
|
|
|
CONFERENCE CALL WEBCAST AND ADDITIONAL
INFORMATIONA webcast of Teleflex’s second 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 August 3, 2023.
An audio replay of the investor call will be available beginning
at 11:00 am ET on August 3, 2023, either on the Teleflex
website or by telephone. The call can be accessed by dialing 1 800
770 2030 (U.S.) or 1 647 362 9199 (all other locations). The
confirmation code is 87648.
ADDITIONAL NOTESReferences 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 MEASURESWe 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. 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.
Pension termination and related charges – These
adjustments represent charges associated with the planned
termination of the Teleflex Incorporated Retirement Income Plan, a
frozen U.S. defined benefit pension plan, and related direct
incremental costs. These charges and costs do not represent normal
and recurring operating expenses, will be inconsistent in amounts
and frequency, and are not expected to recur once the plan
termination process has been completed. Accordingly, management has
excluded these amounts to facilitate an evaluation of our current
operating performance and a comparison to our past operating
performance.
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. 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.
Reconciliation of Consolidated Statement of Income Items
(Dollars in millions, except per share data)
Three
Months Ended July 2, 2023 |
|
Gross margin |
Selling,general andadministrativeexpenses
(1) |
Research anddevelopmentexpenses
(1) |
Operatingmargin (2) |
Income beforeincome taxes |
Income taxexpense |
Effectiveincome taxrate |
Dilutedearnings pershare
fromcontinuingoperations |
GAAP Basis |
54.9% |
30.0% |
5.3% |
19.3% |
$127.0 |
$15.5 |
12.2% |
$2.35 |
Adjustments |
|
|
|
|
|
|
|
|
Restructuring, restructuring related and impairment items (A) |
1.0 |
— |
(0.2) |
1.5 |
10.8 |
1.7 |
|
0.19 |
Acquisition, integration and divestiture related items (B) |
— |
1.0 |
— |
(1.0) |
(7.5) |
— |
|
(0.16) |
ERP implementation |
— |
(0.2) |
— |
0.2 |
1.3 |
0.3 |
|
0.02 |
MDR |
— |
— |
(1.0) |
1.0 |
7.6 |
— |
|
0.16 |
Intangible amortization expense |
3.1 |
(2.5) |
— |
5.6 |
42.0 |
2.1 |
|
0.85 |
Tax adjustments |
— |
— |
— |
— |
— |
— |
|
0.00 |
Adjustments total |
4.1 |
(1.7) |
(1.2) |
7.3 |
54.2 |
4.1 |
|
1.06 |
Adjusted basis |
59.0% |
28.3% |
4.1% |
26.6% |
$181.2 |
$19.6 |
10.8% |
$3.41 |
Three
Months Ended June 26, 2022 |
|
Grossmargin |
Selling,general andadministrativeexpenses
(1) |
Research anddevelopmentexpenses
(1) |
Operatingmargin (2) |
Income beforeincome taxes |
Income taxexpense |
Effectiveincome taxrate |
Dilutedearnings pershare
fromcontinuingoperations |
GAAP Basis |
55.2% |
30.8% |
5.2% |
19.2% |
$124.0 |
$18.4 |
14.9% |
$2.23 |
Adjustments |
|
|
|
|
|
|
|
|
Restructuring, restructuring related and impairment items (A) |
1.3 |
— |
— |
1.3 |
9.0 |
0.8 |
|
0.17 |
Acquisition, integration and divestiture related items (B) |
— |
(0.1) |
— |
0.1 |
0.5 |
0.1 |
|
0.01 |
ERP Implementation |
— |
— |
— |
— |
— |
— |
|
0.00 |
MDR |
— |
— |
(1.2) |
1.2 |
8.5 |
— |
|
0.18 |
Intangible amortization expense |
3.1 |
(2.6) |
— |
5.7 |
40.5 |
1.5 |
|
0.82 |
Tax adjustments |
— |
— |
— |
— |
— |
1.1 |
|
(0.02) |
Adjustments total |
4.4 |
(2.7) |
(1.2) |
8.3 |
58.5 |
3.5 |
|
1.16 |
Adjusted basis |
59.6% |
28.1% |
4.0% |
27.5% |
$182.5 |
$21.9 |
12.0% |
$3.39 |
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. |
Six Months
Ended July 2, 2023 |
|
Grossmargin |
Selling,general andadministrativeexpenses
(1) |
Research anddevelopmentexpenses
(1) |
Operatingmargin (2) |
Income beforeincome taxes |
Income taxexpense |
Effectiveincome taxrate |
Dilutedearnings pershare
fromcontinuingoperations |
GAAP Basis |
55.0% |
31.4% |
5.6% |
17.8% |
$224.4 |
$35.7 |
15.9% |
$3.99 |
Adjustments |
|
|
|
|
|
|
|
|
Restructuring, restructuring related and impairment items (A) |
1.1 |
— |
(0.2) |
1.6 |
22.8 |
3.5 |
|
0.41 |
Acquisition, integration and divestiture related items (B) |
— |
0.3 |
— |
(0.3) |
(4.4) |
0.1 |
|
(0.10) |
ERP Implementation |
— |
(0.2) |
— |
0.2 |
2.5 |
0.6 |
|
0.04 |
MDR |
— |
— |
(1.2) |
1.2 |
17.9 |
— |
|
0.38 |
Intangible amortization expense |
3.1 |
(2.6) |
— |
5.7 |
83.6 |
4.1 |
|
1.68 |
Tax adjustments |
— |
— |
— |
— |
— |
(4.8) |
|
0.10 |
Adjustments total |
4.2 |
(2.5) |
(1.4) |
8.4 |
122.4 |
3.5 |
|
2.51 |
Adjusted basis |
59.2% |
28.9% |
4.2% |
26.2% |
$346.8 |
$39.2 |
11.3% |
$6.50 |
|
|
|
|
|
|
|
|
|
Six Months
Ended June 26, 2022 |
|
Gross margin |
Selling,general and
administrativeexpenses(1) |
Research
anddevelopmentexpenses(1) |
Operatingmargin(2) |
Income beforeincome taxes |
Income taxexpense |
Effectiveincome taxrate |
Dilutedearnings pershare
fromcontinuingoperations |
GAAP Basis |
54.6% |
31.3% |
5.4% |
17.7% |
$217.3 |
$34.4 |
15.8% |
$3.86 |
Adjustments |
|
|
|
|
|
|
|
|
Restructuring, restructuring related and impairment items (A) |
1.1 |
— |
— |
1.3 |
17.8 |
1.9 |
|
0.34 |
Acquisition, integration and divestiture related items (B) |
— |
— |
— |
— |
0.6 |
— |
|
0.01 |
ERP Implementation |
— |
— |
— |
— |
— |
— |
|
0.00 |
MDR |
— |
— |
(1.5) |
1.6 |
20.6 |
— |
|
0.43 |
Intangible amortization expense |
3.3 |
(2.9) |
— |
6.1 |
81.2 |
3.0 |
|
1.65 |
Tax adjustments |
— |
— |
— |
— |
— |
1.1 |
|
(0.02) |
Adjustments total |
4.4 |
(2.9) |
(1.5) |
9.0 |
120.2 |
6.0 |
|
2.41 |
Adjusted basis |
59.0% |
28.4% |
3.9% |
26.7% |
$337.5 |
$40.4 |
12.0% |
$6.27 |
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. |
|
|
Tickmarks to Reconciliation
Tables(A) Restructuring,
restructuring related and impairment items
– For the three months ended July 2, 2023, pre-tax
restructuring charges were $1.5 million and restructuring related
charges were $9.3 million. For the three months ended June 26,
2022, pre-tax restructuring charges were $(0.1) million and
restructuring related charges were $9.1 million. For the six months
ended July 2, 2023, pre-tax restructuring charges were $3.7 million
and restructuring related charges were $19.1 million. For the six
months ended June 26, 2022, pre-tax restructuring charges were $0.8
million; restructuring related charges were $15.5 million; and
impairment charges were $1.5 million.
(B) Acquisition,
integration and divestiture related items – For the three
and six months ended July 2, 2023, these charges primarily
related to a decrease in contingent consideration expense and the
pending acquisition of Palette Life Sciences AB. For the three and
six months ended June 26, 2022, these charges related to the
divestiture of respiratory assets.
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
INFORMATIONThis press release contains forward-looking
statements, including, but not limited to, our expectation that the
global environment will remain stable during the second half of
2023; our expectations regarding the impacts our acquisition of
Palette Life Sciences AB. will have on our business, financial
results and future growth; 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 regarding the projected impact of the Palette
acquisition on our 2023 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.
|
TELEFLEX INCORPORATED |
CONSOLIDATED STATEMENTS OF INCOME |
(Unaudited) |
|
|
Three Months Ended |
|
Six Months Ended |
|
July 2, 2023 |
|
June 26, 2022 |
|
July 2, 2023 |
|
June 26, 2022 |
|
(Dollars and shares in thousands, except per
share) |
Net revenues |
$ |
743,259 |
|
|
$ |
704,542 |
|
|
$ |
1,454,191 |
|
|
$ |
1,346,257 |
|
Cost of goods sold |
|
335,436 |
|
|
|
315,709 |
|
|
|
654,988 |
|
|
|
611,191 |
|
Gross profit |
|
407,823 |
|
|
|
388,833 |
|
|
|
799,203 |
|
|
|
735,066 |
|
Selling, general and
administrative expenses |
|
223,306 |
|
|
|
216,825 |
|
|
|
456,022 |
|
|
|
420,757 |
|
Research and development
expenses |
|
39,448 |
|
|
|
36,934 |
|
|
|
80,917 |
|
|
|
73,294 |
|
Restructuring and impairment
charges (credits) |
|
1,508 |
|
|
|
(83 |
) |
|
|
3,729 |
|
|
|
2,322 |
|
Income from continuing operations before interest and taxes |
|
143,561 |
|
|
|
135,157 |
|
|
|
258,535 |
|
|
|
238,693 |
|
Interest expense |
|
17,762 |
|
|
|
11,419 |
|
|
|
36,099 |
|
|
|
21,837 |
|
Interest income |
|
(1,156 |
) |
|
|
(229 |
) |
|
|
(1,999 |
) |
|
|
(451 |
) |
Income from continuing operations before taxes |
|
126,955 |
|
|
|
123,967 |
|
|
|
224,435 |
|
|
|
217,307 |
|
Taxes on income from
continuing operations |
|
15,532 |
|
|
|
18,412 |
|
|
|
35,716 |
|
|
|
34,385 |
|
Income from continuing operations |
|
111,423 |
|
|
|
105,555 |
|
|
|
188,719 |
|
|
|
182,922 |
|
Operating loss from
discontinued operations |
|
(114 |
) |
|
|
(54 |
) |
|
|
(825 |
) |
|
|
(348 |
) |
Tax benefit on operating loss
from discontinued operations |
|
(26 |
) |
|
|
(13 |
) |
|
|
(189 |
) |
|
|
(81 |
) |
Loss from discontinued operations |
|
(88 |
) |
|
|
(41 |
) |
|
|
(636 |
) |
|
|
(267 |
) |
Net income |
$ |
111,335 |
|
|
$ |
105,514 |
|
|
$ |
188,083 |
|
|
$ |
182,655 |
|
Earnings per share: |
|
|
|
|
|
|
|
Basic: |
|
|
|
|
|
|
|
Income from continuing operations |
$ |
2.37 |
|
|
$ |
2.25 |
|
|
$ |
4.02 |
|
|
$ |
3.90 |
|
Loss from discontinued operations |
|
— |
|
|
|
— |
|
|
|
(0.02 |
) |
|
|
— |
|
Net income |
$ |
2.37 |
|
|
$ |
2.25 |
|
|
$ |
4.00 |
|
|
$ |
3.90 |
|
Diluted: |
|
|
|
|
|
|
|
Income from continuing operations |
$ |
2.35 |
|
|
$ |
2.23 |
|
|
$ |
3.99 |
|
|
$ |
3.86 |
|
Loss from discontinued operations |
|
— |
|
|
|
— |
|
|
|
(0.01 |
) |
|
|
— |
|
Net income |
$ |
2.35 |
|
|
$ |
2.23 |
|
|
$ |
3.98 |
|
|
$ |
3.86 |
|
Weighted average common shares
outstanding |
|
|
|
|
|
|
|
Basic |
|
46,981 |
|
|
|
46,901 |
|
|
|
46,965 |
|
|
|
46,889 |
|
Diluted |
|
47,329 |
|
|
|
47,347 |
|
|
|
47,307 |
|
|
|
47,374 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TELEFLEX INCORPORATED |
CONSOLIDATED BALANCE SHEETS |
(Unaudited) |
|
|
July 2, 2023 |
|
December 31, 2022 |
|
(Dollars in thousands) |
ASSETS |
|
|
|
Current assets |
|
|
|
Cash and cash equivalents |
$ |
250,816 |
|
$ |
292,034 |
Accounts receivable, net |
|
429,309 |
|
|
408,834 |
Inventories |
|
631,555 |
|
|
578,507 |
Prepaid expenses and other current assets |
|
120,190 |
|
|
125,084 |
Prepaid taxes |
|
13,929 |
|
|
6,524 |
Total current assets |
|
1,445,799 |
|
|
1,410,983 |
Property, plant and equipment,
net |
|
464,609 |
|
|
447,205 |
Operating lease assets |
|
123,215 |
|
|
131,211 |
Goodwill |
|
2,546,130 |
|
|
2,536,730 |
Intangible assets, net |
|
2,227,947 |
|
|
2,306,165 |
Deferred tax assets |
|
6,278 |
|
|
6,402 |
Other assets |
|
81,747 |
|
|
89,367 |
Total assets |
$ |
6,895,725 |
|
$ |
6,928,063 |
LIABILITIES AND
EQUITY |
|
|
|
Current liabilities |
|
|
|
Current borrowings |
$ |
87,500 |
|
$ |
87,500 |
Accounts payable |
|
142,081 |
|
|
126,807 |
Accrued expenses |
|
127,861 |
|
|
140,644 |
Payroll and benefit-related liabilities |
|
106,177 |
|
|
133,092 |
Accrued interest |
|
5,793 |
|
|
5,332 |
Income taxes payable |
|
20,184 |
|
|
24,736 |
Other current liabilities |
|
65,853 |
|
|
63,381 |
Total current liabilities |
|
555,449 |
|
|
581,492 |
Long-term borrowings |
|
1,470,674 |
|
|
1,624,023 |
Deferred tax liabilities |
|
385,113 |
|
|
388,886 |
Pension and postretirement
benefit liabilities |
|
30,686 |
|
|
31,394 |
Noncurrent liability for
uncertain tax positions |
|
6,534 |
|
|
5,805 |
Noncurrent operating lease
liabilities |
|
112,229 |
|
|
120,437 |
Other liabilities |
|
119,948 |
|
|
154,058 |
Total liabilities |
|
2,680,633 |
|
|
2,906,095 |
Commitments and
contingencies |
|
|
|
Total shareholders’
equity |
|
4,215,092 |
|
|
4,021,968 |
Total liabilities and shareholders’ equity |
$ |
6,895,725 |
|
$ |
6,928,063 |
TELEFLEX INCORPORATED |
CONSOLIDATED STATEMENTS OF CASH FLOWS |
(Unaudited) |
|
|
Six Months Ended |
|
July 2, 2023 |
|
June 26, 2022 |
|
(Dollars in thousands) |
Cash flows from operating
activities of continuing operations: |
|
|
|
Net income |
$ |
188,083 |
|
|
$ |
182,655 |
|
Adjustments to reconcile net income to net cash provided by
operating activities: |
|
|
|
Loss from discontinued operations |
|
636 |
|
|
|
267 |
|
Depreciation expense |
|
36,723 |
|
|
|
33,499 |
|
Intangible asset amortization expense |
|
83,600 |
|
|
|
81,137 |
|
Deferred financing costs and debt discount amortization
expense |
|
1,700 |
|
|
|
2,103 |
|
Changes in contingent consideration |
|
(6,776 |
) |
|
|
145 |
|
Assets impairment charges |
|
— |
|
|
|
1,497 |
|
Stock-based compensation |
|
14,020 |
|
|
|
12,801 |
|
Deferred income taxes, net |
|
460 |
|
|
|
937 |
|
Payments for contingent consideration |
|
— |
|
|
|
(2,722 |
) |
Interest benefit on swaps designated as net investment hedges |
|
(10,288 |
) |
|
|
(10,145 |
) |
Other |
|
2,824 |
|
|
|
(1,779 |
) |
Changes in assets and liabilities, net of effects of acquisitions
and disposals: |
|
|
|
Accounts receivable |
|
(16,587 |
) |
|
|
(43,939 |
) |
Inventories |
|
(45,630 |
) |
|
|
(48,682 |
) |
Prepaid expenses and other assets |
|
12,120 |
|
|
|
15,464 |
|
Accounts payable, accrued expenses and other liabilities |
|
(53,766 |
) |
|
|
(38,722 |
) |
Income taxes receivable and payable, net |
|
(36,501 |
) |
|
|
(82,657 |
) |
Net cash provided by operating activities from continuing
operations |
|
170,618 |
|
|
|
101,859 |
|
Cash flows from investing
activities of continuing operations: |
|
|
|
Expenditures for property, plant and equipment |
|
(39,374 |
) |
|
|
(32,445 |
) |
Proceeds from sale of business and assets |
|
— |
|
|
|
530 |
|
Payments for businesses and intangibles acquired, net of cash
acquired |
|
(129 |
) |
|
|
(22,971 |
) |
Net interest proceeds on swaps designated as net investment
hedges |
|
10,275 |
|
|
|
10,314 |
|
Net cash used in investing activities from continuing
operations |
|
(29,228 |
) |
|
|
(44,572 |
) |
Cash flows from financing
activities of continuing operations: |
|
|
|
Reduction in borrowings |
|
(154,500 |
) |
|
|
(135,500 |
) |
Net payments from share based compensation plans and related tax
impacts |
|
572 |
|
|
|
(4,366 |
) |
Payments for contingent consideration |
|
(121 |
) |
|
|
(3,012 |
) |
Dividends paid |
|
(31,941 |
) |
|
|
(31,892 |
) |
Net cash used in financing activities from continuing
operations |
|
(185,990 |
) |
|
|
(174,770 |
) |
Cash flows from discontinued
operations: |
|
|
|
Net cash used in operating activities |
|
(454 |
) |
|
|
(280 |
) |
Net cash used in discontinued operations |
|
(454 |
) |
|
|
(280 |
) |
Effect of exchange rate
changes on cash and cash equivalents |
|
3,836 |
|
|
|
(19,200 |
) |
Net decrease in cash and cash
equivalents |
|
(41,218 |
) |
|
|
(136,963 |
) |
Cash and cash equivalents at
the beginning of the period |
|
292,034 |
|
|
|
445,084 |
|
Cash and cash equivalents at
the end of the period |
$ |
250,816 |
|
|
$ |
308,121 |
|
|
|
|
|
|
|
|
|
Contacts:Teleflex Incorporated:Lawrence
KeuschVice President, Investor Relations and Strategy
Development
investors.teleflex.com 610-948-2836
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