Teleflex Incorporated (NYSE: TFX) (the “Company”) today announced
financial results for the fourth quarter and full year ended
December 31, 2019.
Fourth quarter 2019 net revenues were $681.0 million, an
increase of 6.1% compared to the prior year period. Excluding
the impact of foreign currency exchange rate fluctuations, fourth
quarter 2019 net revenues increased 7.1% over the year ago
period.
Fourth quarter 2019 GAAP earnings per share from continuing
operations increased 21.9% to $2.28, compared to $1.87 in the
prior year period. Fourth quarter 2019 adjusted diluted
earnings per share from continuing operations increased 18.4% to
$3.28, compared to $2.77 in the prior year period.
Full year 2019 net revenues were $2.595 billion, an increase of
6.0% compared to the prior year. Excluding the impact of
foreign currency exchange rate fluctuations, full year 2019 net
revenues increased 8.1% over the prior year.
Full year 2019 GAAP earnings per share from continuing
operations increased 133.6% to $9.81, compared to $4.20 in the
prior year. Full year 2019 adjusted diluted earnings per
share from continuing operations increased 12.6% to $11.15,
compared to $9.90 in the prior year.
Liam Kelly, President and Chief Executive Officer, said, “The
fourth quarter of 2019 capped an excellent year for Teleflex, as we
once-again generated upper single-digit constant currency revenue
growth, while also achieving the highest adjusted gross and
operating margins in company history."
Mr. Kelly continued, "2019 was the first year of our three-year
long-range plan, and I am pleased that during the first year we
were able to exceed our constant currency revenue growth
expectations. Additionally, during 2019 we were able to
proactively pull-forward one-time investment spending that we
expect will pay benefits in future years. Finally, we exited
the year with gross and operating margins that provide us
confidence in our ability to achieve our previously provided
long-range targets."
Mr. Kelly concluded, "As we transition into the second year of
our three-year long-range plan, we remain confident in our ability
to generate significant constant currency revenue growth, margin
expansion, and adjusted earnings per share growth. Lastly, I
am pleased to announce the acquisition of privately-held IWG High
Performance Conductors, Inc. (HPC), an industry-leading
manufacturer of highly engineered minimally invasive medical
solutions. The acquisition of HPC will expand our
comprehensive OEM product portfolio by adding insulated wire and
micro-diameter tubing components for medical devices including
intra-cardiac mapping catheters, cerebral protection systems for
TAVR procedures, and RF nerve ablation for pain management.
We are quite excited to complete this acquisition, given its
above-company average revenue growth and operating margin
profile."
NET REVENUE BY SEGMENT
The following tables and commentary provide information
regarding net revenues in each of the Company's reportable
operating segments for the three and twelve months ended December
31, 2019 and December 31, 2018 on both a GAAP and constant currency
basis. The discussion below the tables of the principal factors
behind changes in net revenues for the three months ended December
31, 2019 as compared to the prior year period applies to both GAAP
revenue and constant currency revenue, although GAAP revenue also
was affected by foreign currency exchange rate fluctuations, as
indicated in the "Currency Impact" column of the tables.
|
Three Months
Ended |
|
% Increase /
(Decrease) |
|
|
December 31,2019 |
|
December 31,2018 |
|
Total SalesGrowth |
|
CurrencyImpact |
|
Constant CurrencyRevenue Growth |
|
Americas |
$ |
400.0 |
|
|
$ |
358.2 |
|
|
11.6 |
|
% |
|
(0.1 |
) |
% |
|
11.7 |
|
% |
|
EMEA |
|
145.9 |
|
|
|
150.9 |
|
|
(3.3 |
) |
% |
|
(2.7 |
) |
% |
|
(0.6 |
) |
% |
|
Asia |
|
80.5 |
|
|
|
79.8 |
|
|
1.0 |
|
% |
|
(1.7 |
) |
% |
|
2.7 |
|
% |
|
OEM |
|
54.6 |
|
|
|
52.7 |
|
|
3.6 |
|
% |
|
(0.7 |
) |
% |
|
4.3 |
|
% |
|
Total |
$ |
681.0 |
|
|
$ |
641.6 |
|
|
6.1 |
|
% |
|
(1.0 |
) |
% |
|
7.1 |
|
% |
|
|
Twelve
Months Ended |
|
% Increase /
(Decrease) |
|
|
December 31,2019 |
|
December 31,2018 |
|
Total SalesGrowth |
|
CurrencyImpact |
|
Constant CurrencyRevenue Growth |
|
Americas |
$ |
1,492.3 |
|
|
$ |
1,351.7 |
|
|
10.4 |
|
% |
|
(0.2 |
) |
% |
|
10.6 |
|
% |
|
EMEA |
|
588.1 |
|
|
|
603.8 |
|
|
(2.6 |
) |
% |
|
(5.3 |
) |
% |
|
2.7 |
|
% |
|
Asia |
|
294.3 |
|
|
|
286.9 |
|
|
2.6 |
|
% |
|
(4.2 |
) |
% |
|
6.8 |
|
% |
|
OEM |
|
220.7 |
|
|
|
206.0 |
|
|
7.2 |
|
% |
|
(1.0 |
) |
% |
|
8.2 |
|
% |
|
Total |
$ |
2,595.4 |
|
|
$ |
2,448.4 |
|
|
6.0 |
|
% |
|
(2.1 |
) |
% |
|
8.1 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas fourth quarter 2019 net revenues were $400.0 million,
an increase of 11.6% compared to the prior year period.
Excluding the impact of foreign currency exchange rate
fluctuations, fourth quarter 2019 net revenues increased 11.7%
compared to the prior year period. The increase in constant
currency revenue was primarily attributable to increases in sales
volumes of existing products and an increase in new product
sales.
EMEA fourth quarter 2019 net revenues were $145.9 million, a
decrease of 3.3% compared to the prior year period. Excluding the
impact of foreign currency exchange rate fluctuations, fourth
quarter 2019 net revenues decreased 0.6% compared to the prior year
period. The decrease in constant currency revenue was primarily
attributable to a decrease in sales volumes of existing
products.
Asia fourth quarter 2019 net revenues were $80.5 million, an
increase of 1.0% compared to the prior year period. Excluding
the impact of foreign currency exchange rate fluctuations, fourth
quarter 2019 net revenues increased 2.7% compared to the prior year
period. The increase in constant currency revenue was
primarily attributable to price increases.
OEM fourth quarter 2019 net revenues were $54.6 million, an
increase of 3.6% compared to the prior year period. Excluding
the impact of foreign currency exchange rate fluctuations, fourth
quarter 2019 net revenues increased 4.3% compared to the prior year
period. The increase in constant currency revenue was
primarily attributable to an increase in sales volumes of existing
products.
NET REVENUE BY GLOBAL PRODUCT CATEGORY
The following tables and commentary provide information
regarding net revenues in each of the Company's global product
categories for the three and twelve months ended December 31, 2019
and December 31, 2018 on both a GAAP and constant currency
basis.
|
Three Months
Ended |
|
% Increase /
(Decrease) |
|
|
December 31,2019 |
|
December 31,2018 |
|
TotalRevenueGrowth |
|
CurrencyImpact |
|
Constant CurrencyRevenue Growth |
|
Vascular Access |
$ |
154.6 |
|
|
$ |
149.1 |
|
|
3.7 |
|
% |
|
(0.9 |
) |
% |
|
4.6 |
|
% |
|
Interventional |
|
112.7 |
|
|
|
107.1 |
|
|
5.2 |
|
% |
|
(0.8 |
) |
% |
|
6.0 |
|
% |
|
Anesthesia |
|
85.3 |
|
|
|
87.6 |
|
|
(2.6 |
) |
% |
|
(1.3 |
) |
% |
|
(1.3 |
) |
% |
|
Surgical |
|
95.2 |
|
|
|
92.7 |
|
|
2.7 |
|
% |
|
(1.2 |
) |
% |
|
3.9 |
|
% |
|
Interventional Urology |
|
89.1 |
|
|
|
57.8 |
|
|
54.3 |
|
% |
|
(0.1 |
) |
% |
|
54.4 |
|
% |
|
OEM |
|
54.6 |
|
|
|
52.7 |
|
|
3.6 |
|
% |
|
(0.7 |
) |
% |
|
4.3 |
|
% |
|
Other |
|
89.4 |
|
|
|
94.7 |
|
|
(5.6 |
) |
% |
|
(1.4 |
) |
% |
|
(4.2 |
) |
% |
|
Total |
$ |
681.0 |
|
|
$ |
641.6 |
|
|
6.1 |
|
% |
|
(1.0 |
) |
% |
|
7.1 |
|
% |
|
|
Twelve
Months Ended |
|
% Increase /
(Decrease) |
|
|
|
December 31,2019 |
|
December 31,2018 |
|
TotalRevenueGrowth |
|
CurrencyImpact |
|
Constant CurrencyRevenue Growth |
|
|
Vascular Access |
$ |
600.9 |
|
|
$ |
575.3 |
|
|
4.4 |
|
% |
|
(1.9 |
) |
% |
|
6.3 |
|
% |
|
|
Interventional |
|
427.6 |
|
|
|
395.4 |
|
|
8.1 |
|
% |
|
(1.7 |
) |
% |
|
9.8 |
|
% |
|
|
Anesthesia |
|
338.4 |
|
|
|
349.4 |
|
|
(3.1 |
) |
% |
|
(2.6 |
) |
% |
|
(0.5 |
) |
% |
|
|
Surgical |
|
370.1 |
|
|
|
358.7 |
|
|
3.2 |
|
% |
|
(2.5 |
) |
% |
|
5.7 |
|
% |
|
|
Interventional Urology |
|
290.5 |
|
|
|
196.7 |
|
|
47.6 |
|
% |
|
(0.2 |
) |
% |
|
47.8 |
|
% |
|
|
OEM |
|
220.7 |
|
|
|
206.0 |
|
|
7.2 |
|
% |
|
(1.0 |
) |
% |
|
8.2 |
|
% |
|
|
Other |
|
347.3 |
|
|
|
366.9 |
|
|
(5.3 |
) |
% |
|
(2.9 |
) |
% |
|
(2.4 |
) |
% |
|
|
Total |
$ |
2,595.4 |
|
|
$ |
2,448.4 |
|
|
6.0 |
|
% |
|
(2.1 |
) |
% |
|
8.1 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fourth quarter 2019 net revenues from sales of Vascular Access
products were $154.6 million, an increase of 3.7% compared to the
prior year period. Excluding the impact of foreign currency
exchange rate fluctuations, fourth quarter 2019 net revenues
increased 4.6% compared to the prior year period.
Fourth quarter 2019 net revenues from sales of Interventional
products were $112.7 million, an increase of 5.2% compared to the
prior year period. Excluding the impact of foreign currency
exchange rate fluctuations, fourth quarter 2019 net revenues
increased 6.0% compared to the prior year period.
Fourth quarter 2019 net revenues from sales of Anesthesia
products were $85.3 million, a decrease of 2.6% compared to the
prior year period. Excluding the impact of foreign currency
exchange rate fluctuations, fourth quarter 2019 net revenues
decreased 1.3% compared to the prior year period.
Fourth quarter 2019 net revenues from sales of Surgical products
were $95.2 million, an increase of 2.7% compared to the prior year
period. Excluding the impact of foreign currency exchange
rate fluctuations, fourth quarter 2019 net revenues increased 3.9%
compared to the prior year period.
Fourth quarter 2019 net revenues from sales of Interventional
Urology products were $89.1 million, an increase of 54.3% compared
to the prior year period. Excluding the impact of foreign currency
exchange rate fluctuations, fourth quarter 2019 net revenues
increased 54.4% compared to the prior year period.
Fourth quarter 2019 net revenues from sales of OEM products were
$54.6 million, an increase of 3.6% compared to the prior year
period. Excluding the impact of foreign currency exchange
rate fluctuations, fourth quarter 2019 net revenues increased 4.3%
compared to the prior year period.
Fourth quarter 2019 net revenues from sales of other products
were $89.4 million, a decrease of 5.6% compared to the prior year
period. Excluding the impact of foreign currency exchange
rate fluctuations, fourth quarter 2019 net revenues decreased 4.2%
compared to the prior year period.
OTHER FINANCIAL HIGHLIGHTS AND KEY PERFORMANCE
METRICS
Depreciation expense, amortization of intangible assets and
deferred financing charges for the year ended December 31, 2019
totaled $218.4 million compared to $214.7 million for the prior
year.
Cash and cash equivalents at December 31, 2019 were $301.1
million compared to $357.2 million at December 31, 2018.
Net accounts receivable at December 31, 2019 were $418.7 million
compared to $366.3 million at December 31, 2018.
Net inventories at December 31, 2019 were $476.6 million
compared to $427.8 million at December 31, 2018.
2020 OUTLOOK
On a GAAP basis, full year 2020 revenues are expected to
increase 6.5% to 7.5% over 2019, reflecting our estimate of an
approximately 0.7% unfavorable impact of foreign currency exchange
rate fluctuations. On a constant currency basis, the Company
estimates that revenues for full year 2020 will increase 7.2% to
8.2% over 2019.
The Company expects full year 2020 GAAP diluted earnings per
share from continuing operations to be between $7.70 and $7.85. The
Company expects adjusted diluted earnings per share from continuing
operations to be between $12.50 and $12.70 for full year 2020,
representing an increase of 12.1% to 13.9% over 2019 and reflecting
the Company's estimate of an approximately 0.9% negative impact
from foreign currency exchange rate fluctuations.
Forecasted 2020 Constant Currency Revenue Growth
Reconciliation
|
Low |
|
High |
|
|
|
|
|
|
|
|
|
|
Forecasted 2020 GAAP revenue growth |
6.5 |
|
% |
7.5 |
|
% |
|
|
|
|
|
|
|
|
|
Estimated impact of foreign currency exchange rate
fluctuations |
(0.7 |
) |
% |
(0.7 |
) |
% |
|
|
|
|
|
|
|
|
|
Forecasted 2020 constant currency revenue growth |
7.2 |
|
% |
8.2 |
|
% |
|
Forecasted 2020 Adjusted Diluted Earnings Per Share From
Continuing Operations Reconciliation
|
Low |
|
High |
|
|
|
|
|
|
|
|
|
|
Forecasted GAAP diluted earnings per share from continuing
operations |
$7.70 |
|
$7.85 |
|
|
|
|
|
Restructuring, restructuring related and impairment items, net of
tax |
$0.65 |
|
$0.67 |
|
|
|
|
|
Acquisition, integration and divestiture related items, net of
tax |
$0.44 |
|
$0.45 |
|
|
|
|
|
|
|
|
Other items, net of tax |
|
— |
|
|
— |
|
|
|
|
|
|
|
|
MDR |
$0.34 |
|
$0.35 |
|
|
|
|
|
|
|
|
Intangible amortization expense, net of tax |
$2.93 |
|
$2.94 |
|
|
|
|
|
|
|
|
Tax adjustments |
$0.44 |
|
$0.44 |
|
|
|
|
|
|
|
|
Forecasted adjusted diluted earnings per share from continuing
operations |
$12.50 |
|
$12.70 |
|
|
|
|
|
|
|
|
|
|
CONFERENCE CALL WEBCAST AND ADDITIONAL
INFORMATION
As previously announced, Teleflex will comment on its financial
results on a conference call to be held today at 8:00 a.m.
(ET). The call will be available live and archived on the
Company’s website at www.teleflex.com and the
accompanying presentation will be posted prior to the call.
An audio replay will be available until February 25, 2020 at
11:00am (ET), by calling 855-859-2056 (U.S./Canada) or 404-537-3406
(International), Passcode: 5857007.
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. Tables reconciling forecasted 2020 constant currency
revenue growth and forecasted 2020 adjusted diluted earnings per
share from continuing operations to their respective most directly
comparable forecasted GAAP measures, which are forecasted 2020 GAAP
revenue growth and forecasted 2020 GAAP diluted earnings per share
from continuing operations, respectively, are set forth above under
“2020 Outlook.”
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 items - These are discrete items that occur sporadically
and can affect period-to-period comparisons. See footnote C to the
reconciliation tables set forth below.
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 will have until
May 2020 to meet the MDR requirements, 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.
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
ITEMSDollars in millions, except per share
amounts
Quarter
Ended - December 31, 2019 |
|
|
|
|
|
|
|
|
|
Cost of
goodssold,excludingintangibleassetamortization |
|
Selling, generalandadministrativeexpenses |
|
Research anddevelopmentexpenses |
|
|
Restructuringandimpairmentcharges |
|
(Gain) Losson sale ofbusiness andassets |
|
|
Loss onextinguishmentof debt |
|
Incometaxes |
|
|
Income (loss) fromcontinuingoperations |
|
|
Diluted earningsper share
fromcontinuingoperations |
|
GAAP Basis |
$282.7 |
|
$240.6 |
|
$31.1 |
|
$1.9 |
|
($2.2 |
) |
$8.8 |
|
($6.5 |
) |
$107.8 |
|
$2.28 |
|
Adjustments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring, restructuring
related and impairment items (A) |
|
5.0 |
|
0.3 |
|
(0.0 |
) |
|
1.9 |
|
— |
|
|
— |
|
1.1 |
|
|
6.1 |
|
$0.13 |
|
Acquisition, integration and
divestiture related items (B) |
|
— |
|
13.5 |
|
— |
|
|
— |
|
(2.2 |
) |
|
— |
|
(0.9 |
) |
|
12.1 |
|
$0.26 |
|
Other items (C) |
|
— |
|
0.3 |
|
— |
|
|
— |
|
— |
|
|
8.8 |
|
2.1 |
|
|
7.0 |
|
$0.15 |
|
MDR (D) |
|
— |
|
— |
|
1.6 |
|
|
— |
|
— |
|
|
— |
|
— |
|
|
1.6 |
|
$0.03 |
|
Intangible amortization
expense |
|
— |
|
37.2 |
|
0.1 |
|
|
— |
|
— |
|
|
— |
|
5.0 |
|
|
32.3 |
|
$0.68 |
|
Tax adjustments |
|
— |
|
— |
|
— |
|
|
— |
|
— |
|
|
— |
|
12.1 |
|
|
(12.1 |
) |
($0.26 |
) |
Adjusted basis |
$277.7 |
|
$189.3 |
|
$29.5 |
|
|
— |
|
— |
|
|
— |
|
$12.9 |
|
$154.7 |
|
$3.28 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RECONCILIATION OF CONSOLIDATED STATEMENT OF INCOME
ITEMSDollars in millions, except per share
amounts
Quarter
Ended - December 31, 2018 |
|
|
|
|
|
|
|
Cost of
goodssold,excludingintangibleassetamortization |
|
Selling, generalandadministrativeexpenses |
|
Research anddevelopmentexpenses |
|
Restructuringandimpairmentcharges |
|
(Gain)/Losson sale ofbusiness andassets |
|
|
Income taxes |
|
|
Income (loss)from continuingoperations |
|
|
Diluted earningsper share
fromcontinuingoperations |
|
GAAP Basis |
$275.8 |
|
$218.5 |
|
$27.8 |
|
$1.6 |
|
($1.4 |
) |
|
$8.7 |
|
$87.5 |
|
$1.87 |
|
Adjustments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring, restructuring
related and impairment items (A) |
|
3.5 |
|
0.8 |
|
0.1 |
|
1.6 |
|
— |
|
|
1.0 |
|
|
5.0 |
|
$0.11 |
|
Acquisition, integration and
divestiture related items (B) |
|
— |
|
6.8 |
|
— |
|
— |
|
(1.4 |
) |
|
(0.2 |
) |
|
5.6 |
|
$0.12 |
|
Other items (C) |
|
— |
|
1.8 |
|
— |
|
— |
|
— |
|
|
0.1 |
|
|
1.6 |
|
$0.04 |
|
Intangible amortization
expense |
|
— |
|
37.4 |
|
0.1 |
|
— |
|
— |
|
|
6.5 |
|
|
31.0 |
|
$0.66 |
|
Tax adjustments |
|
— |
|
— |
|
— |
|
— |
|
— |
|
|
1.1 |
|
|
(1.1 |
) |
($0.02 |
) |
Adjusted basis |
$272.3 |
|
$171.8 |
|
$27.6 |
|
— |
|
— |
|
|
$17.2 |
|
$129.7 |
|
$2.77 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- Restructuring, restructuring related and impairment
items - For the three months ended December 31, 2019,
pre-tax restructuring charges were $1.8 million, pre-tax
restructuring related charges were $5.3 million, and pre-tax
impairment charges were $0.1 million. For the three months ended
December 31, 2018, pre-tax restructuring charges were $1.6 million
and pre-tax restructuring related charges were $4.4 million; there
were no pre-tax impairment charges.
- Acquisition, integration and divestiture related
items - For the three months ended December 31, 2019,
these charges primarily related to contingent consideration
liabilities and our acquisition of IWG High Performance Conductors,
Inc., partially offset by the gain on sale of an asset. For
the three months ended December 31, 2018, these charges primarily
related to contingent consideration liabilities and our acquisition
of Essential Medical, Inc., and acquisitions related to our
surgical and interventional product portfolios, partially offset by
the gain on sale of an asset. There were no divestiture
related activities for the three months ended December 31, 2019 or
December 31, 2018.
- Other items - For the three months ended
December 31, 2019, other items included debt extinguishment
expenses and product relabeling costs. For the three months
ended December 31, 2018, other items included losses associated
with settlement of litigation related to an intellectual property
matter, expenses associated with a franchise tax audit, and product
relabeling costs.
- MDR - For the three months ended December 31,
2019, these costs were associated with our efforts to comply with
the European Medical Device Regulation. There were no such costs
for the three months ended December 31, 2018.
RECONCILIATION OF CONSOLIDATED STATEMENT OF INCOME
ITEMSDollars in millions, except per share
amounts
Year Ended
- December 31, 2019 |
|
|
|
|
|
|
|
|
Cost of
goodssold,excludingintangibleassetamortization |
|
Selling, generalandadministrativeexpenses |
|
Research anddevelopmentexpenses |
|
Restructuringandimpairmentcharges |
|
(Gain) Losson sale ofbusiness andassets |
|
|
Loss onextinguishmentof debt |
|
Income taxes |
|
|
Income (loss) fromcontinuingoperations |
|
|
Diluted earningsper share
fromcontinuingoperations |
|
GAAP Basis |
$1,103.8 |
|
$934.4 |
|
$113.9 |
|
$22.2 |
|
($6.1 |
) |
$8.8 |
|
($122.1 |
) |
$462.0 |
|
$9.81 |
|
Adjustments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring, restructuring
related and impairment items (A) |
|
15.9 |
|
0.4 |
|
0.0 |
|
22.2 |
|
— |
|
|
— |
|
5.1 |
|
|
33.4 |
|
$0.71 |
|
Acquisition, integration and
divestiture related items (B) |
|
0.1 |
|
55.3 |
|
— |
|
— |
|
(6.1 |
) |
|
— |
|
(2.8 |
) |
|
52.1 |
|
$1.11 |
|
Other items (C) |
|
— |
|
1.8 |
|
— |
|
— |
|
— |
|
|
8.8 |
|
2.5 |
|
|
8.2 |
|
$0.17 |
|
MDR (D) |
|
— |
|
— |
|
3.2 |
|
— |
|
— |
|
|
— |
|
— |
|
|
3.2 |
|
$0.07 |
|
Intangible amortization
expense |
|
— |
|
149.5 |
|
0.4 |
|
— |
|
— |
|
|
— |
|
28.1 |
|
|
121.9 |
|
$2.59 |
|
Tax adjustments |
|
— |
|
— |
|
— |
|
— |
|
— |
|
|
— |
|
155.8 |
|
|
(155.8 |
) |
($3.31 |
) |
Adjusted basis |
$1,087.8 |
|
$727.3 |
|
$110.2 |
|
— |
|
— |
|
|
— |
|
$66.5 |
|
$525.0 |
|
$11.15 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RECONCILIATION OF CONSOLIDATED STATEMENT OF INCOME
ITEMSDollars in millions, except per share
amounts
Year Ended
- December 31, 2018 |
|
|
|
|
|
|
Cost of
goodssold,excludingintangibleassetamortization |
|
|
Selling, generalandadministrativeexpenses |
|
Research anddevelopmentexpenses |
|
Restructuringand impairmentcharges |
|
(Gain)/Losson sale ofbusiness andassets |
|
|
Income taxes |
|
Income (loss)from continuingoperations |
|
|
Diluted earningsper share
fromcontinuingoperations |
|
GAAP Basis |
$1,063.9 |
|
$878.7 |
|
$106.2 |
|
$79.2 |
|
($1.4 |
) |
|
$23.2 |
|
$196.4 |
|
$4.20 |
|
Adjustments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring, restructuring
related and impairment items (A) |
13.4 |
|
|
1.0 |
|
0.3 |
|
79.2 |
|
— |
|
|
11.6 |
|
82.3 |
|
$1.76 |
|
Acquisition, integration and
divestiture related items (B) |
1.1 |
|
|
60.1 |
|
0.5 |
|
— |
|
(1.4 |
) |
|
0.8 |
|
59.5 |
|
$1.27 |
|
Other items (C) |
(1.3 |
) |
|
4.3 |
|
— |
|
— |
|
— |
|
|
0.1 |
|
2.8 |
|
$0.06 |
|
Intangible amortization
expense |
— |
|
|
149.1 |
|
0.4 |
|
— |
|
— |
|
|
26.5 |
|
122.9 |
|
$2.63 |
|
Tax adjustments |
— |
|
|
— |
|
— |
|
— |
|
— |
|
|
0.6 |
|
(0.6 |
) |
($0.01 |
) |
Adjusted basis |
$1,050.8 |
|
$664.3 |
|
$104.9 |
|
— |
|
— |
|
|
$62.8 |
|
$463.5 |
|
$9.90 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- Restructuring, restructuring related and impairment
items - For the twelve months ended December 31, 2019
pre-tax restructuring charges were $15.2 million, pre-tax
restructuring related charges were $16.3 million, and pre-tax
impairment charges were $7.0 million. For the twelve months
ended December 31, 2018, pre-tax restructuring charges were $60.1
million, pre-tax restructuring related charges were $14.7 million,
and pre-tax impairment charges were $19.1 million.
- Acquisition, integration and divestiture related
items - For the twelve months ended December 31, 2019,
these charges primarily related to contingent consideration
liabilities and our acquisition of Essential Medical, Inc.,
partially offset by the gain on sale of a business and two assets.
For the twelve months ended December 31, 2018, these charges
primarily related to contingent consideration liabilities and our
acquisition of NeoTract, Inc., partially offset by the gain on sale
of an asset. There were no divestiture related activities
during the twelve months ended December 31, 2018.
- Other items - For the twelve months ended
December 31, 2019, other items included debt modification and
extinguishment expenses, expenses associated with a franchise tax
audit, and product relabeling costs, partially offset by a credit
associated with an insurance settlement. Other items for the twelve
months ended December 31, 2018 included the reversal of previously
recognized income due to distributor acquisitions related to
Vascular Solutions, losses associated with settlement of litigation
relating to an intellectual property matter, expenses associated
with a franchise tax audit, and relabeling costs. In addition,
these items included a charge we incurred as a result of our
continuing evaluation of the impact of the Tax Cuts and Jobs Act
("TCJA") on our consolidated operations. During the second
quarter of 2018, we identified provisions of the TCJA that could
have adverse consequences due to our organization structure.
We implemented certain changes in our organization structure
(pursuant to applicable tax law, these changes retroactively
affected the 2017 tax year), and as a result, we incurred a $1.9
million net worth tax in a foreign jurisdiction with respect to the
2017 tax year. Because the decision to make the change
resulting in the net worth tax occurred in the second quarter of
2018, and as permitted under GAAP, we recorded the net worth tax
charge in 2018; the adjustment eliminating the charge is included
in the table above among "Other Items" for the 2018 period.
- MDR - For the twelve months ended December 31,
2019, these costs were associated with our efforts to comply with
the European Medical Device Regulation. The costs associated with
the European Medical Device Regulation initiative include $0.3
million that were a component of the "Other items" line item in the
reconciliation table for the three months ended March 31, 2019
included in our first quarter 2019 earnings release.
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®, Hudson RCI®, LMA®,
Pilling®, 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, forecasted 2020 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 2020 financial results;
and confidence in our ability to achieve our previously stated
long-term financial objectives. Actual results could differ
materially from those in the forward-looking statements due to,
among other things, changes in business relationships with and
purchases by or from major customers or suppliers; 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 the impact of the United Kingdom's departure from the
European Union, commonly known as "Brexit"; public health
epidemics; 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 INCORPORATEDCONSOLIDATED
STATEMENTS OF INCOME |
|
|
|
|
|
Three Months Ended December 31, |
|
Twelve Months Ended December 31, |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|
|
|
(Dollars and shares in thousands, except
per share) |
Net revenues |
$ |
680,952 |
|
|
$ |
641,615 |
|
|
$ |
2,595,362 |
|
|
$ |
2,448,383 |
|
Cost of goods sold, excluding
intangible asset amortization |
282,686 |
|
|
275,794 |
|
|
1,103,750 |
|
|
1,063,941 |
|
Gross profit |
398,266 |
|
|
365,821 |
|
|
1,491,612 |
|
|
1,384,442 |
|
Selling, general and
administrative expenses |
240,598 |
|
|
218,540 |
|
|
934,373 |
|
|
878,688 |
|
Research and development
expenses |
31,128 |
|
|
27,798 |
|
|
113,857 |
|
|
106,208 |
|
Restructuring and impairment
charges |
1,857 |
|
|
1,605 |
|
|
22,205 |
|
|
79,230 |
|
Gain on sale of assets |
(2,249 |
) |
|
(1,388 |
) |
|
(6,077 |
) |
|
(1,388 |
) |
Income from continuing
operations before interest, loss on extinguishment of debt and
taxes |
126,932 |
|
|
119,266 |
|
|
427,254 |
|
|
321,704 |
|
Interest expense |
17,275 |
|
|
23,257 |
|
|
80,270 |
|
|
103,020 |
|
Interest income |
(460 |
) |
|
(168 |
) |
|
(1,741 |
) |
|
(944 |
) |
Loss on extinguishment of debt |
8,822 |
|
|
— |
|
|
8,822 |
|
|
— |
|
Income from continuing
operations before taxes |
101,295 |
|
|
96,177 |
|
|
339,903 |
|
|
219,628 |
|
(Benefit) taxes on income from continuing operations |
(6,511 |
) |
|
8,664 |
|
|
(122,078 |
) |
|
23,196 |
|
Income from continuing
operations |
107,806 |
|
|
87,513 |
|
|
461,981 |
|
|
196,432 |
|
(Loss) income from
discontinued operations |
463 |
|
|
4,397 |
|
|
(828 |
) |
|
5,643 |
|
Tax (benefit) on income (loss) from discontinued
operations |
4 |
|
|
1,320 |
|
|
(313 |
) |
|
1,273 |
|
(Loss) income on discontinued operations |
459 |
|
|
3,077 |
|
|
(515 |
) |
|
4,370 |
|
Net income |
108,265 |
|
|
90,590 |
|
|
461,466 |
|
|
200,802 |
|
Earnings per share
available to common shareholders: |
|
|
|
|
|
|
Basic: |
|
|
|
|
|
|
|
Income from continuing operations |
$ |
2.33 |
|
|
$ |
1.90 |
|
|
$ |
10.00 |
|
|
$ |
4.30 |
|
Income (loss) on discontinued operations |
0.01 |
|
|
0.07 |
|
|
(0.01 |
) |
|
0.09 |
|
Net income |
$ |
2.34 |
|
|
$ |
1.97 |
|
|
$ |
9.99 |
|
|
$ |
4.39 |
|
Diluted: |
|
|
|
|
|
|
|
Income from continuing operations |
$ |
2.28 |
|
|
$ |
1.87 |
|
|
$ |
9.81 |
|
|
$ |
4.20 |
|
Income (loss) on discontinued operations |
0.01 |
|
|
0.06 |
|
|
(0.01 |
) |
|
0.09 |
|
Net income |
$ |
2.29 |
|
|
$ |
1.93 |
|
|
$ |
9.80 |
|
|
$ |
4.29 |
|
Weighted average common shares
outstanding: |
|
|
|
|
|
|
|
Basic |
46,333 |
|
|
45,993 |
|
|
46,200 |
|
|
45,689 |
|
Diluted |
47,207 |
|
|
46,849 |
|
|
47,090 |
|
|
46,801 |
|
|
TELEFLEX INCORPORATEDCONSOLIDATED BALANCE
SHEETS |
|
|
|
December 31, |
|
2019 |
|
2018 |
|
|
|
(Dollars and shares in thousands,except per
share) |
ASSETS |
Current assets |
|
|
|
Cash and cash equivalents |
$ |
301,083 |
|
|
$ |
357,161 |
|
Accounts receivable, net |
418,673 |
|
|
366,286 |
|
Inventories |
476,557 |
|
|
427,778 |
|
Prepaid expenses and other current assets |
97,943 |
|
|
72,481 |
|
Prepaid taxes |
12,076 |
|
|
12,463 |
|
Total current assets |
1,306,332 |
|
|
1,236,169 |
|
Property, plant and equipment,
net |
430,719 |
|
|
432,766 |
|
Operating lease assets |
113,160 |
|
|
— |
|
Goodwill |
2,245,305 |
|
|
2,246,579 |
|
Intangibles assets, net |
2,156,285 |
|
|
2,325,052 |
|
Deferred tax assets |
5,572 |
|
|
2,446 |
|
Other assets |
52,447 |
|
|
34,979 |
|
Total assets |
$ |
6,309,820 |
|
|
$ |
6,277,991 |
|
LIABILITIES AND
EQUITY |
|
|
|
Current liabilities |
|
|
|
Current borrowings |
50,000 |
|
|
86,625 |
|
Accounts payable |
102,916 |
|
|
106,709 |
|
Accrued expenses |
100,466 |
|
|
97,551 |
|
Current portion of contingent consideration |
148,090 |
|
|
136,877 |
|
Payroll and benefit-related liabilities |
115,981 |
|
|
104,670 |
|
Accrued interest |
5,514 |
|
|
6,031 |
|
Income taxes payable |
6,692 |
|
|
5,943 |
|
Other current liabilities |
33,396 |
|
|
38,050 |
|
Total current liabilities |
563,055 |
|
|
582,456 |
|
Long-term borrowings |
1,858,943 |
|
|
2,072,200 |
|
Deferred tax liabilities |
439,558 |
|
|
608,221 |
|
Pension and postretirement
benefit liabilities |
82,719 |
|
|
92,914 |
|
Noncurrent liability for
uncertain tax positions |
10,294 |
|
|
10,718 |
|
Noncurrent contingent
consideration |
71,818 |
|
|
167,370 |
|
Noncurrent operating lease
liabilities |
101,372 |
|
|
— |
|
Other liabilities |
202,741 |
|
|
204,134 |
|
Total liabilities |
3,330,500 |
|
|
3,738,013 |
|
Commitments and
contingencies |
|
|
|
Shareholders’ equity |
|
|
|
Common shares, $1 par value Issued: 2019 — 47,536 shares; 2018
— 47,248 shares |
47,536 |
|
|
47,248 |
|
Additional paid-in capital |
616,980 |
|
|
574,761 |
|
Retained earnings |
2,824,916 |
|
|
2,427,599 |
|
Accumulated other comprehensive loss |
(344,392 |
) |
|
(341,085 |
) |
|
3,145,040 |
|
|
2,708,523 |
|
Less: Treasury stock, at cost |
165,720 |
|
|
168,545 |
|
Total shareholders' equity |
2,979,320 |
|
|
2,539,978 |
|
Total liabilities and shareholders' equity |
6,309,820 |
|
|
6,277,991 |
|
|
TELEFLEX
INCORPORATEDCONSOLIDATED STATEMENTS OF CASH
FLOWS |
|
|
|
Year Ended
December 31, |
|
2019 |
|
2018 |
|
|
|
(Dollars in
thousands) |
Cash flows from operating activities of continuing
operations: |
|
|
|
Net income |
$ |
461,466 |
|
|
$ |
200,802 |
|
Adjustments to reconcile net income to net cash provided by
operating activities: |
|
|
|
Loss (Income) from discontinued operations |
515 |
|
|
(4,370 |
) |
Depreciation expense |
64,088 |
|
|
60,494 |
|
Amortization expense of intangible assets |
149,974 |
|
|
149,486 |
|
Amortization expense of deferred financing costs and debt
discount |
4,307 |
|
|
4,734 |
|
Loss on extinguishment of debt |
8,822 |
|
|
— |
|
Changes in contingent consideration |
53,915 |
|
|
52,977 |
|
Impairment of long-lived assets |
6,966 |
|
|
19,110 |
|
Stock-based compensation |
26,940 |
|
|
22,438 |
|
Net gain on sales of businesses and assets |
(6,077 |
) |
|
(1,388 |
) |
Deferred income taxes, net |
(168,594 |
) |
|
(6,097 |
) |
Payments for contingent consideration |
(26,092 |
) |
|
(2,100 |
) |
Interest benefit on swaps designated as net investment hedges |
(18,866 |
) |
|
(3,277 |
) |
Other |
(5,800 |
) |
|
(13,426 |
) |
Changes in operating assets and liabilities, net of effects of
acquisitions and disposals: |
|
|
|
Accounts receivable |
(59,793 |
) |
|
(23,412 |
) |
Inventories |
(53,170 |
) |
|
(37,198 |
) |
Prepaid expenses and other current assets |
(31,023 |
) |
|
(10,351 |
) |
Accounts payable, accrued expenses and other liabilities |
36,021 |
|
|
62,404 |
|
Income taxes receivable and payable, net |
(6,531 |
) |
|
(35,740 |
) |
Net cash provided by operating activities from continuing
operations |
437,068 |
|
|
435,086 |
|
Cash flows from investing activities of continuing
operations: |
|
|
|
Expenditures for property, plant and equipment |
(102,695 |
) |
|
(80,795 |
) |
Payments for businesses and intangibles acquired, net of cash
acquired |
(3,462 |
) |
|
(121,025 |
) |
Proceeds from sales of businesses and assets |
14,345 |
|
|
3,878 |
|
Net interest proceeds on swaps designated as net investment
hedges |
18,331 |
|
|
1,548 |
|
Net cash used in investing activities from continuing
operations |
(73,481 |
) |
|
(196,394 |
) |
Cash flows from financing activities of continuing
operations: |
|
|
|
Proceeds from new borrowings |
275,000 |
|
|
35,000 |
|
Reduction in borrowings |
(528,500 |
) |
|
(128,500 |
) |
Debt extinguishment, issuance and amendment fees |
(11,635 |
) |
|
(188 |
) |
Proceeds from share based compensation plans and the related tax
impacts |
21,206 |
|
|
22,655 |
|
Payments for contingent consideration |
(112,079 |
) |
|
(73,235 |
) |
Dividends |
(62,828 |
) |
|
(62,165 |
) |
Net cash (used in) provided by financing activities from continuing
operations |
(418,836 |
) |
|
(206,433 |
) |
Cash flows from discontinued operations: |
|
|
|
Net cash provided by (used in) operating activities |
2,457 |
|
|
2,292 |
|
Net cash provided by (used in) discontinued operations |
2,457 |
|
|
2,292 |
|
Effect of exchange rate changes on cash and cash
equivalents |
(3,286 |
) |
|
(10,948 |
) |
Net increase (decrease) in cash and cash equivalents |
(56,078 |
) |
|
23,603 |
|
Cash and cash equivalents at the beginning of the year |
357,161 |
|
|
333,558 |
|
Cash and cash equivalents at the end of the year |
$ |
301,083 |
|
|
$ |
357,161 |
|
|
|
|
|
|
|
|
|
Contact:Jake Elguicze Treasurer and Vice
President of Investor Relations610-948-2836
Teleflex (NYSE:TFX)
Historical Stock Chart
From Feb 2024 to Mar 2024
Teleflex (NYSE:TFX)
Historical Stock Chart
From Mar 2023 to Mar 2024