Teleflex Incorporated (NYSE: TFX) (the “Company”) today announced
financial results for the third quarter ended September 25,
2022.
Third quarter financial
summary
- Revenues of $686.8 million, down 1.9% year-over-year; up
2.4% on a constant currency basis
- GAAP diluted EPS from continuing operations of $2.16, compared
to $4.20 in the prior year period
- Adjusted diluted EPS from continuing operations of $3.27,
compared to $3.51 in the prior year period
2022 guidance summary
- Lowering GAAP revenue growth guidance to (0.75)% to 0.25%
- Maintaining constant currency revenue growth guidance of 3.25%
to 4.25%
- Lowering GAAP EPS from continuing operations guidance to $7.74
to $8.14 from $8.04 to $8.44 prior
- Lowering adjusted diluted EPS from continuing operations
guidance to $12.80 to $13.20 from $13.00 to $13.40 prior
"Our third quarter financial results reflect revenue
contributions from our high-growth portfolio and durable core" said
Liam Kelly, Teleflex's Chairman, President and Chief Executive
Officer. "We continue to execute on our long-term strategic
objectives, deploying capital to purchase Standard Bariatrics, Inc.
The acquisition of Standard Bariatrics is consistent with our
long-standing M&A strategy, including an expectation for
revenue and margin accretion over time. During the quarter, we saw
stabilization in logistics and distribution, while supply chain
challenges have yet to normalize."
NET REVENUE BY SEGMENTThe following table
provides information regarding net revenues in each of the
Company's reportable operating segments for the three and nine
months ended September 25, 2022 and September 26, 2021 on
both a GAAP and constant currency basis.
|
Three Months Ended |
|
% Increase / (Decrease) |
|
September 25,2022 |
|
September 26,2021 |
|
ReportedRevenueGrowth |
|
CurrencyImpact |
|
ConstantCurrencyRevenue Growth |
Americas |
$405.1 |
|
$417.3 |
|
(2.9)% |
|
(0.2)% |
|
(2.7)% |
EMEA |
128.4 |
|
143.9 |
|
(10.7)% |
|
(14.1)% |
|
3.4% |
Asia |
82.0 |
|
75.0 |
|
9.4% |
|
(11.1)% |
|
20.5% |
OEM |
71.3 |
|
64.1 |
|
11.2% |
|
(3.2)% |
|
14.4% |
Total |
$686.8 |
|
$700.3 |
|
(1.9)% |
|
(4.3)% |
|
2.4% |
|
Nine Months Ended |
|
% Increase / (Decrease) |
|
September 25,2022 |
|
September 26,2021 |
|
ReportedRevenueGrowth |
|
CurrencyImpact |
|
ConstantCurrencyRevenue Growth |
Americas |
$1,195.7 |
|
$1,207.6 |
|
(1.0)% |
|
(0.2)% |
|
(0.8)% |
EMEA |
410.5 |
|
442.3 |
|
(7.2)% |
|
(10.6)% |
|
3.4% |
Asia |
227.8 |
|
219.2 |
|
3.9% |
|
(7.3)% |
|
11.2% |
OEM |
199.0 |
|
178.5 |
|
11.4% |
|
(2.5)% |
|
13.9% |
Total |
$2,033.0 |
|
$2,047.6 |
|
(0.7)% |
|
(3.3)% |
|
2.6% |
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 nine
months ended September 25, 2022 and September 26, 2021 on
both a GAAP and constant currency basis.
|
Three Months Ended |
|
% Increase / (Decrease) |
|
September 25,2022 |
|
September 26,2021 |
|
ReportedRevenueGrowth |
|
CurrencyImpact |
|
ConstantCurrencyRevenue Growth |
Vascular Access |
$167.1 |
|
$175.5 |
|
(4.7)% |
|
(3.9)% |
|
(0.8)% |
Interventional |
108.7 |
|
104.3 |
|
4.3% |
|
(4.6)% |
|
8.9% |
Anesthesia |
97.6 |
|
97.1 |
|
0.5% |
|
(5.3)% |
|
5.8% |
Surgical |
93.1 |
|
92.8 |
|
0.3% |
|
(5.9)% |
|
6.2% |
Interventional Urology |
79.0 |
|
83.1 |
|
(5.0)% |
|
(0.4)% |
|
(4.6)% |
OEM |
71.3 |
|
64.1 |
|
11.2% |
|
(3.2)% |
|
14.4% |
Other |
69.9 |
|
83.4 |
|
(16.1)% |
|
(6.2)% |
|
(9.9)% |
Total |
$686.8 |
|
$700.3 |
|
(1.9)% |
|
(4.3)% |
|
2.4% |
|
Nine Months Ended |
|
% Increase / (Decrease) |
|
September 25,2022 |
|
September 26,2021 |
|
ReportedRevenueGrowth |
|
CurrencyImpact |
|
ConstantCurrencyRevenue Growth |
Vascular Access |
$497.2 |
|
$507.2 |
|
(2.0)% |
|
(3.1)% |
|
1.1% |
Interventional |
319.9 |
|
312.6 |
|
2.4% |
|
(3.2)% |
|
5.6% |
Anesthesia |
289.2 |
|
277.3 |
|
4.3% |
|
(4.2)% |
|
8.5% |
Surgical |
282.5 |
|
271.4 |
|
4.1% |
|
(4.5)% |
|
8.6% |
Interventional Urology |
233.7 |
|
248.7 |
|
(6.0)% |
|
(0.2)% |
|
(5.8)% |
OEM |
199.0 |
|
178.5 |
|
11.4% |
|
(2.5)% |
|
13.9% |
Other |
211.5 |
|
251.9 |
|
(16.0)% |
|
(5.2)% |
|
(10.8)% |
Total |
$2,033.0 |
|
$2,047.6 |
|
(0.7)% |
|
(3.3)% |
|
2.6% |
OTHER FINANCIAL HIGHLIGHTS
- Depreciation expense, amortization of
intangible assets and deferred financing charges for the nine
months ended September 25, 2022 totaled $174.1 million
compared to $182.1 million for the prior year period.
- Cash and cash equivalents at September 25, 2022 were
$397.3 million compared to $445.1 million at December 31,
2021.
- Net accounts receivable at September 25, 2022 were
$391.3 million compared to $383.6 million at December 31,
2021.
- Inventories at September 25, 2022 were $530.1 million
compared to $477.6 million at December 31, 2021.
2022 OUTLOOK On a GAAP basis,
full year 2022 revenue growth outlook is now expected to be (0.75)%
to 0.25%, reflecting our estimate of an approximately 4.00%
negative impact of foreign exchange rate fluctuations. On a
constant currency basis, the Company maintained its full year 2022
revenue growth guidance of 3.25% to 4.25%, inclusive of a
year-over-year headwind from the initial phase of the respiratory
divestiture completed on June 28, 2021, expected to be
approximately 1.10%.
The Company revised its full year 2022 GAAP diluted earnings per
share from continuing operations outlook to $7.74 to $8.14 from
$8.04 to $8.44. The Company lowered its 2022 adjusted diluted
earnings per share from continuing operations guidance to $12.80 to
$13.20 from $13.00 to $13.40, which includes a headwind from the
respiratory divestiture now expected to be $0.14, representing a
4.0% to 1.0% decline on a year-over-year basis.
Forecasted 2022
Constant Currency Revenue Growth
Reconciliation
|
Low |
|
High |
Forecasted 2022 GAAP revenue growth |
(0.75)% |
|
0.25% |
Estimated impact of foreign currency exchange rate
fluctuations |
(4.00)% |
|
(4.00)% |
Forecasted 2022 constant currency revenue growth |
3.25% |
|
4.25% |
Forecasted 2022
Adjusted Diluted Earnings Per Share From Continuing
Operations Reconciliation
|
Low |
|
High |
Forecasted GAAP diluted earnings per share from continuing
operations |
$7.74 |
|
$8.14 |
Restructuring, restructuring related and impairment items, net of
tax |
$0.83 |
|
$0.83 |
Acquisition, integration and divestiture related items, net of
tax |
$0.01 |
|
$0.01 |
Other |
$0.01 |
|
$0.01 |
MDR |
$0.84 |
|
$0.84 |
Intangible amortization expense, net of tax |
$3.37 |
|
$3.37 |
Forecasted adjusted diluted earnings per share from continuing
operations |
$12.80 |
|
$13.20 |
CONFERENCE CALL WEBCAST AND ADDITIONAL
INFORMATIONA webcast of Teleflex's third quarter 2022
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 October 27, 2022.
An audio replay of the investor call will be available beginning
at 11:00 am ET on October 27, 2022, either on the Teleflex
website or by telephone. The call can be accessed by dialing 1
(866) 813-9403 (U.S.), 1 226 828 7578 (Canada), 0204 525 0658 (UK),
44 204 525 0658 (all other locations).
The confirmation code is 716622.
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.
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.
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 September 25, 2022 |
|
Gross margin |
|
Selling, general and administrative expenses
(1) |
|
Research and development expenses
(1) |
|
Operating margin (2) |
|
Income before income taxes |
|
Income tax expense |
|
Effective income tax rate |
|
Diluted earnings per share from continuing
operations |
GAAP Basis |
54.4% |
|
30.5% |
|
5.5% |
|
19.3% |
|
$119.2 |
|
$17.3 |
|
14.5% |
|
$2.16 |
|
Adjustments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring, restructuring related and impairment items (A) |
1.0 |
|
— |
|
— |
|
1.1 |
|
7.5 |
|
0.5 |
|
|
0.15 |
|
Acquisition, integration and divestiture related items (B) |
— |
|
(0.2) |
|
— |
|
(0.8) |
|
(5.2) |
|
(1.4) |
|
|
(0.08) |
|
MDR |
— |
|
— |
|
(1.3) |
|
1.3 |
|
8.8 |
|
— |
|
|
0.19 |
|
Intangible amortization expense |
3.3 |
|
(2.6) |
|
— |
|
6.0 |
|
40.9 |
|
1.5 |
|
|
0.83 |
|
Tax adjustments |
— |
|
— |
|
— |
|
— |
|
— |
|
(1.1) |
|
|
0.02 |
|
Adjustments total |
4.3 |
|
(2.8) |
|
(1.3) |
|
7.6 |
|
52.0 |
|
(0.5) |
|
|
1.11 |
|
Adjusted basis |
58.7% |
|
27.7% |
|
4.2% |
|
26.9% |
|
$171.2 |
|
$16.8 |
|
9.8% |
|
$3.27 |
|
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. |
|
|
Three
Months Ended September 26, 2021 |
|
Grossmargin |
|
Selling,general
andadministrativeexpenses(1) |
|
Research
anddevelopmentexpenses(1) |
|
Operatingmargin(2) |
|
Income beforeincome taxes |
|
Income taxexpense |
|
Effectiveincome taxrate |
|
Dilutedearnings pershare
fromcontinuingoperations |
GAAP Basis |
55.4% |
|
29.3% |
|
4.5% |
|
34.4% |
|
$229.2 |
|
$29.7 |
|
13.0% |
|
$4.20 |
|
Adjustments |
|
|
|
|
|
|
|
|
Restructuring, restructuring related and impairment items (A) |
1.0 |
|
0.1 |
|
— |
|
1.2 |
|
|
8.3 |
|
0.8 |
|
|
0.16 |
|
Acquisition, integration and divestiture related items (B) |
— |
|
0.3 |
|
— |
|
(12.7) |
|
|
(89.2) |
|
(15.9) |
|
|
(1.54) |
|
Other items (C) |
— |
|
(0.9) |
|
— |
|
(0.9) |
|
|
(6.4) |
|
(0.2) |
|
|
(0.13) |
|
MDR |
— |
|
— |
|
0.7 |
|
0.7 |
|
|
4.9 |
|
— |
|
|
0.10 |
|
Intangible amortization expense |
3.2 |
|
2.7 |
|
— |
|
5.9 |
|
|
41.0 |
|
6.8 |
|
|
0.72 |
|
Tax adjustments |
— |
|
— |
|
— |
|
— |
|
|
— |
|
0.1 |
|
|
— |
|
Adjustments total |
4.1 |
|
2.2 |
|
0.7 |
|
(5.9) |
|
|
(41.5) |
|
(8.5) |
|
|
(0.69) |
|
Adjusted basis |
59.5% |
|
27.2% |
|
3.8% |
|
28.5% |
|
$187.7 |
|
$21.2 |
|
11.3% |
|
$3.51 |
|
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. |
|
|
Nine
Months Ended September 25, 2022 |
|
Gross margin |
|
Selling, general and administrative expenses
(1) |
|
Research and development expenses
(1) |
|
Operating margin (2) |
|
Income before income taxes |
|
Income tax expense |
|
Effective income tax rate |
|
Diluted earnings per share from continuing
operations |
GAAP Basis |
54.5% |
|
31.0% |
|
5.5% |
|
18.3% |
|
$336.5 |
|
$51.7 |
|
15.4% |
|
$6.02 |
|
Adjustments |
|
|
|
|
|
|
|
|
Restructuring, restructuring related and impairment items (A) |
1.1 |
|
— |
|
— |
|
1.2 |
|
25.3 |
|
2.3 |
|
|
0.49 |
|
Acquisition, integration and divestiture related items (B) |
— |
|
(0.1) |
|
— |
|
(0.2) |
|
(4.5) |
|
(1.4) |
|
|
(0.07) |
|
MDR |
— |
|
— |
|
(1.5) |
|
1.4 |
|
29.4 |
|
— |
|
|
0.62 |
|
Intangible amortization expense |
3.3 |
|
(2.7) |
|
— |
|
6.0 |
|
122.0 |
|
4.6 |
|
|
2.48 |
|
Tax adjustments |
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
|
— |
|
Adjustments total |
4.4 |
|
(2.8) |
|
(1.5) |
|
8.4 |
|
172.2 |
|
5.5 |
|
|
3.52 |
|
Adjusted basis |
58.9% |
|
28.2% |
|
4.0% |
|
26.7% |
|
$508.7 |
|
$57.2 |
|
11.2% |
|
$9.54 |
|
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. |
|
|
Nine
Months Ended September 26, 2021 |
|
Grossmargin |
|
Selling,general
andadministrativeexpenses(1) |
|
Research
anddevelopmentexpenses(1) |
|
Operatingmargin(2) |
|
Income beforeincome taxes |
|
Income taxexpense |
|
Effectiveincome taxrate |
|
Dilutedearnings pershare
fromcontinuingoperations |
GAAP Basis |
55.2% |
|
30.9% |
|
4.6% |
|
23.1% |
|
$416.2 |
|
$58.5 |
|
14.1% |
|
$7.54 |
|
Adjustments |
|
|
|
|
|
|
|
|
Restructuring, restructuring related and impairment items (A) |
1.0 |
|
0.1 |
|
— |
|
2.1 |
|
42.4 |
|
4.4 |
|
|
0.80 |
|
Acquisition, integration and divestiture related items (B) |
0.1 |
|
0.7 |
|
— |
|
(3.6) |
|
(73.0) |
|
(14.6) |
|
|
(1.23) |
|
Other items (C) |
— |
|
(0.3) |
|
— |
|
(0.3) |
|
6.6 |
|
2.8 |
|
|
0.08 |
|
MDR |
— |
|
— |
|
0.7 |
|
0.7 |
|
14.3 |
|
— |
|
|
0.30 |
|
Intangible amortization expense |
3.2 |
|
2.8 |
|
— |
|
6.1 |
|
124.8 |
|
20.8 |
|
|
2.19 |
|
Tax adjustments |
— |
|
— |
|
— |
|
— |
|
— |
|
(1.9) |
|
|
0.04 |
|
Adjustments total |
4.4 |
|
3.3 |
|
0.7 |
|
5.0 |
|
115.1 |
|
11.5 |
|
|
2.18 |
|
Adjusted basis |
59.6% |
|
27.6% |
|
3.9% |
|
28.1% |
|
$531.3 |
|
$70.0 |
|
13.2% |
|
$9.73 |
|
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 September 25, 2022, pre-tax restructuring charges were
$0.6 million and restructuring related charges were $6.9 million.
For the three months ended September 26, 2021, pre-tax
restructuring charges were $1.0 million; and pre-tax restructuring
related charges were $7.4 million. For the nine months ended
September 25, 2022, pre-tax restructuring charges were $1.5
million, restructuring related charges were $22.4 million, and
impairment charges were $1.5 million. For the nine months ended
September 26, 2021, pre-tax restructuring charges were $13.7
million; pre-tax restructuring related charges were $22.0 million;
and pre-tax impairment charges were $6.7 million.
(B) Acquisition,
integration and divestiture related items – For the three
months ended September 25, 2022, these charges related to the
acquisition of Standard Bariatrics, Inc. and the gain related to a
sale of a building. For the three months ended September 26, 2021,
these charges primarily related to contingent consideration
liabilities and charges primarily related to our divestiture of
certain respiratory assets. For the nine months ended
September 25, 2022, these charges related to the acquisition of
Standard Bariatrics, Inc., the divestiture of respiratory assets,
and the gain related to a sale of a building. For the nine months
ended September 26, 2021, these charges primarily related to our
divestiture of certain respiratory assets, contingent consideration
liabilities, and an inventory step up for the Z-Medica, LLC
acquisition.
(C) Other –
For the three months ended September 26, 2021, other items were
associated with expenses for tax matters and a benefit from the
reversal of a contingent liability related to tariffs. For the nine
months ended September 26, 2021, other items were associated with
debt extinguishment and a benefit from the reversal of a contingent
liability related to tariffs and expenses associated with tax
matters.
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, statements regarding our
expectation that our acquisition of Standard Bariatrics will be
accretive to our revenues and margins over time; forecasted 2022
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 2022
financial results; and our estimates with regard to the projected
impacts of the divestiture of a significant portion of our
respiratory business on our financial results. Actual
results could differ materially from those in the forward-looking
statements due to, among other things, the adverse economic
conditions associated with the COVID-19 global health pandemic and
the associated financial crisis, stay-at-home and other orders,
which may significantly reduce customer spending and which may have
a negative impact on the Company’s business, 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 international conflicts and hostilities, such as the
ongoing geopolitical conflict between Russia and Ukraine; 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(Unaudited) |
|
|
Three Months Ended |
|
Nine Months Ended |
|
September 25, 2022 |
|
September 26, 2021 |
|
September 25, 2022 |
|
September 26, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars and shares in thousands, except per
share) |
Net revenues |
$ |
686,788 |
|
|
$ |
700,251 |
|
|
$ |
2,033,045 |
|
|
$ |
2,047,649 |
|
Cost of goods sold |
|
312,833 |
|
|
|
312,464 |
|
|
|
924,024 |
|
|
|
917,779 |
|
Gross profit |
|
373,955 |
|
|
|
387,787 |
|
|
|
1,109,021 |
|
|
|
1,129,870 |
|
Selling, general and
administrative expenses |
|
209,616 |
|
|
|
205,194 |
|
|
|
630,373 |
|
|
|
632,501 |
|
Research and development
expenses |
|
37,770 |
|
|
|
31,816 |
|
|
|
111,064 |
|
|
|
95,046 |
|
Restructuring and impairment
charges |
|
628 |
|
|
|
959 |
|
|
|
2,950 |
|
|
|
20,451 |
|
Gains on sale of asset and
business |
|
(6,504 |
) |
|
|
(91,157 |
) |
|
|
(6,504 |
) |
|
|
(91,157 |
) |
Income from continuing operations before interest and taxes |
|
132,445 |
|
|
|
240,975 |
|
|
|
371,138 |
|
|
|
473,029 |
|
Interest expense |
|
13,375 |
|
|
|
11,989 |
|
|
|
35,212 |
|
|
|
44,958 |
|
Interest income |
|
(126 |
) |
|
|
(215 |
) |
|
|
(577 |
) |
|
|
(1,106 |
) |
Loss on extinguishment of
debt |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
12,986 |
|
Income from continuing operations before taxes |
|
119,196 |
|
|
|
229,201 |
|
|
|
336,503 |
|
|
|
416,191 |
|
Taxes on income from
continuing operations |
|
17,315 |
|
|
|
29,695 |
|
|
|
51,700 |
|
|
|
58,535 |
|
Income from continuing operations |
|
101,881 |
|
|
|
199,506 |
|
|
|
284,803 |
|
|
|
357,656 |
|
Operating income (loss) from
discontinued operations |
|
19 |
|
|
|
(423 |
) |
|
|
(329 |
) |
|
|
(470 |
) |
Tax expense (benefit) on
operating loss from discontinued operations |
|
5 |
|
|
|
(98 |
) |
|
|
(76 |
) |
|
|
(109 |
) |
Income (loss) from discontinued operations |
|
14 |
|
|
|
(325 |
) |
|
|
(253 |
) |
|
|
(361 |
) |
Net income |
$ |
101,895 |
|
|
$ |
199,181 |
|
|
$ |
284,550 |
|
|
$ |
357,295 |
|
Earnings per share: |
|
|
|
|
|
|
|
Basic: |
|
|
|
|
|
|
|
Income from continuing operations |
$ |
2.17 |
|
|
$ |
4.26 |
|
|
$ |
6.07 |
|
|
$ |
7.66 |
|
Loss from discontinued operations |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(0.02 |
) |
Net income |
$ |
2.17 |
|
|
$ |
4.26 |
|
|
$ |
6.07 |
|
|
$ |
7.64 |
|
Diluted: |
|
|
|
|
|
|
|
Income from continuing operations |
$ |
2.16 |
|
|
$ |
4.20 |
|
|
$ |
6.02 |
|
|
$ |
7.54 |
|
Loss from discontinued operations |
|
— |
|
|
|
— |
|
|
|
(0.01 |
) |
|
|
(0.01 |
) |
Net income |
$ |
2.16 |
|
|
$ |
4.20 |
|
|
$ |
6.01 |
|
|
$ |
7.53 |
|
Weighted average common shares
outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
46,906 |
|
|
|
46,810 |
|
|
|
46,894 |
|
|
|
46,749 |
|
Diluted |
|
47,263 |
|
|
|
47,452 |
|
|
|
47,337 |
|
|
|
47,431 |
|
TELEFLEX INCORPORATEDCONSOLIDATED BALANCE
SHEETS(Unaudited) |
|
|
September 25, 2022 |
|
December 31, 2021 |
|
|
|
|
|
|
|
(Dollars in thousands) |
ASSETS |
|
|
|
Current assets |
|
|
|
Cash and cash equivalents |
$ |
397,259 |
|
$ |
445,084 |
Accounts receivable, net |
|
391,251 |
|
|
383,569 |
Inventories |
|
530,088 |
|
|
477,643 |
Prepaid expenses and other current assets |
|
113,916 |
|
|
117,277 |
Prepaid taxes |
|
26,868 |
|
|
5,545 |
Total current assets |
|
1,459,382 |
|
|
1,429,118 |
Property, plant and equipment,
net |
|
422,355 |
|
|
443,758 |
Operating lease assets |
|
112,047 |
|
|
129,653 |
Goodwill |
|
2,415,297 |
|
|
2,504,202 |
Intangible assets, net |
|
2,176,259 |
|
|
2,289,067 |
Deferred tax assets |
|
5,762 |
|
|
6,820 |
Other assets |
|
166,985 |
|
|
69,104 |
Total assets |
$ |
6,758,087 |
|
$ |
6,871,722 |
LIABILITIES AND
EQUITY |
|
|
|
Current liabilities |
|
|
|
Current borrowings |
$ |
114,375 |
|
$ |
110,000 |
Accounts payable |
|
121,508 |
|
|
118,236 |
Accrued expenses |
|
140,862 |
|
|
163,441 |
Payroll and benefit-related liabilities |
|
121,596 |
|
|
143,657 |
Accrued interest |
|
15,875 |
|
|
5,209 |
Income taxes payable |
|
41,320 |
|
|
83,943 |
Other current liabilities |
|
55,407 |
|
|
55,633 |
Total current liabilities |
|
610,943 |
|
|
680,119 |
Long-term borrowings |
|
1,593,504 |
|
|
1,740,102 |
Deferred tax liabilities |
|
387,333 |
|
|
370,124 |
Pension and postretirement
benefit liabilities |
|
40,345 |
|
|
45,185 |
Noncurrent liability for
uncertain tax positions |
|
9,007 |
|
|
8,646 |
Noncurrent operating lease
liabilities |
|
99,606 |
|
|
116,033 |
Other liabilities |
|
122,188 |
|
|
156,765 |
Total liabilities |
|
2,862,926 |
|
|
3,116,974 |
Commitments and
contingencies |
|
|
|
Total shareholders'
equity |
|
3,895,161 |
|
|
3,754,748 |
Total liabilities and shareholders' equity |
$ |
6,758,087 |
|
$ |
6,871,722 |
TELEFLEX INCORPORATEDCONSOLIDATED STATEMENTS OF
CASH FLOWS(Unaudited) |
|
Nine Months Ended |
|
September 25, 2022 |
|
September 26, 2021 |
|
|
|
|
|
|
|
|
|
(Dollars in thousands) |
Cash flows from operating
activities of continuing operations: |
|
|
|
Net income |
$ |
284,550 |
|
|
$ |
357,295 |
|
Adjustments to reconcile net income to net cash provided by
operating activities: |
|
|
|
Loss from discontinued operations |
|
253 |
|
|
|
361 |
|
Depreciation expense |
|
49,076 |
|
|
|
53,846 |
|
Intangible asset amortization expense |
|
121,904 |
|
|
|
124,832 |
|
Deferred financing costs and debt discount amortization
expense |
|
3,150 |
|
|
|
3,438 |
|
Loss on extinguishment of debt |
|
— |
|
|
|
12,986 |
|
Fair value step up of acquired inventory sold |
|
— |
|
|
|
3,993 |
|
Changes in contingent consideration |
|
237 |
|
|
|
12,728 |
|
Assets impairment charges |
|
1,497 |
|
|
|
6,739 |
|
Stock-based compensation |
|
19,804 |
|
|
|
17,065 |
|
Gain on sale of business |
|
(6,504 |
) |
|
|
(91,157 |
) |
Deferred income taxes, net |
|
63 |
|
|
|
(67 |
) |
Payments for contingent consideration |
|
(2,983 |
) |
|
|
(170 |
) |
Interest benefit on swaps designated as net investment hedges |
|
(15,677 |
) |
|
|
(13,882 |
) |
Other |
|
(3,953 |
) |
|
|
(26,113 |
) |
Changes in assets and liabilities, net of effects of acquisitions
and disposals: |
|
|
|
Accounts receivable |
|
(36,402 |
) |
|
|
(13,829 |
) |
Inventories |
|
(85,293 |
) |
|
|
(10,951 |
) |
Prepaid expenses and other assets |
|
21,298 |
|
|
|
(31,223 |
) |
Accounts payable, accrued expenses and other liabilities |
|
(26,726 |
) |
|
|
84,179 |
|
Income taxes receivable and payable, net |
|
(79,879 |
) |
|
|
(39,610 |
) |
Net cash provided by operating activities from
continuing operations |
|
244,415 |
|
|
|
450,460 |
|
Cash flows from investing
activities of continuing operations: |
|
|
|
Expenditures for property, plant and equipment |
|
(52,648 |
) |
|
|
(52,090 |
) |
Proceeds from sale of business and assets |
|
12,434 |
|
|
|
225,900 |
|
Payments for businesses and intangibles acquired, net of cash
acquired |
|
(27,308 |
) |
|
|
(4,254 |
) |
Net interest proceeds on swaps designated as net investment
hedges |
|
10,314 |
|
|
|
9,288 |
|
Proceeds from sales of investments |
|
7,300 |
|
|
|
7,300 |
|
Purchase of investments |
|
(7,300 |
) |
|
|
(18,418 |
) |
Net cash (used in) provided by investing activities
from continuing operations |
|
(57,208 |
) |
|
|
167,726 |
|
Cash flows from financing
activities of continuing operations: |
|
|
|
Proceeds from new borrowings |
|
— |
|
|
|
400,000 |
|
Reduction in borrowings |
|
(144,250 |
) |
|
|
(834,000 |
) |
Debt extinguishment, issuance and amendment fees |
|
— |
|
|
|
(9,774 |
) |
Net (payments) proceeds from share based compensation plans and
related tax impacts |
|
(4,398 |
) |
|
|
11,366 |
|
Payments for contingent consideration |
|
(3,885 |
) |
|
|
(31,388 |
) |
Dividends paid |
|
(47,840 |
) |
|
|
(47,716 |
) |
Proceeds from sale of treasury stock |
|
— |
|
|
|
11,097 |
|
Net cash used in financing activities from continuing
operations |
|
(200,373 |
) |
|
|
(500,415 |
) |
Cash flows from discontinued
operations: |
|
|
|
Net cash used in operating activities |
|
(482 |
) |
|
|
(519 |
) |
Net cash used in discontinued operations |
|
(482 |
) |
|
|
(519 |
) |
Effect of exchange rate
changes on cash and cash equivalents |
|
(34,177 |
) |
|
|
(11,965 |
) |
Net (decrease) increase in
cash and cash equivalents |
|
(47,825 |
) |
|
|
105,287 |
|
Cash and cash equivalents at
the beginning of the period |
|
445,084 |
|
|
|
375,880 |
|
Cash and cash equivalents at
the end of the period |
$ |
397,259 |
|
|
$ |
481,167 |
|
|
|
|
|
|
|
|
|
Contacts:Teleflex Incorporated:Lawrence
KeuschVice President, Investor Relations and Strategy
Development
John Hsu, CFAVice President, Investor Relations
investors.teleflex.com 610-948-2836
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