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  
                                   
  1. 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.
  2. 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.
  3. 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.
  4. 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  
                                   
  1. 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.
  2. 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.
  3. 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.
  4. 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 Click Here for more Teleflex Charts.
Teleflex (NYSE:TFX)
Historical Stock Chart
From Mar 2023 to Mar 2024 Click Here for more Teleflex Charts.