Teleflex Incorporated (NYSE: TFX) (the “Company”) today announced
financial results for the fourth quarter ended December 31,
2022.
Fourth quarter financial
summary
- Revenues of $758.0 million, down 0.5% compared to the
prior year period, up 3.7% on a constant currency basis
- GAAP diluted EPS from continuing operations of $1.65, compared
to $2.69 in the prior year period
- Adjusted diluted EPS from continuing operations of $3.52,
compared to $3.60 in the prior year period
Full year 2022
financial summary
- Revenues of $2,791.0 million, down 0.7% year-over-year; up
2.9% on a constant currency basis
- GAAP diluted EPS from continuing operations of $7.67, compared
to $10.23 in the prior year
- Adjusted diluted EPS from continuing operations of $13.06,
compared to $13.33 in the prior year
2023 guidance summary
- GAAP revenue growth guidance of 4.25% to 5.75%
- Constant currency revenue growth guidance of 4.75% to
6.25%
- GAAP EPS from continuing operations guidance of $8.26 to
$8.86
- Adjusted diluted EPS from continuing operations guidance of
$13.00 to $13.60
"Our business showed continued resilience in the fourth quarter
with a sequential improvement in constant currency revenue growth
and margin expansion," said Liam Kelly, Teleflex's Chairman,
President and Chief Executive Officer. "In the quarter, we
maintained healthy margins, and advanced our capital allocation
strategy with the completion of the acquisition of Standard
Bariatrics. As we look into 2023, we remain committed to our
corporate strategy for durable growth."
NET REVENUE BY SEGMENTThe following table
provides information regarding net revenues in each of the
Company's reportable operating segments for the three and twelve
months ended December 31, 2022 and December 31, 2021 on
both a GAAP and constant currency basis.
|
Three Months Ended |
|
% Increase / (Decrease) |
|
December 31, 2022 |
December 31, 2021 |
|
Reported Revenue Growth |
|
Currency Impact |
|
Constant Currency Revenue Growth |
Americas |
$458.0 |
$451.7 |
|
1.4% |
|
(0.3)% |
|
1.7% |
EMEA |
147.8 |
164.5 |
|
(10.2)% |
|
(11.6)% |
|
1.4% |
Asia |
78.5 |
78.5 |
|
—% |
|
(13.3)% |
|
13.3% |
OEM |
73.7 |
67.2 |
|
9.7% |
|
(2.3)% |
|
12.0% |
Consolidated |
$758.0 |
$761.9 |
|
(0.5)% |
|
(4.2)% |
|
3.7% |
|
Year Ended |
|
% Increase / (Decrease) |
|
December 31, 2022 |
December 31, 2021 |
|
Reported Revenue Growth |
|
Currency Impact |
|
Constant Currency Revenue Growth |
Americas |
$1,653.7 |
$1,659.3 |
|
(0.3)% |
|
(0.2)% |
|
(0.1)% |
EMEA |
558.4 |
606.8 |
|
(8.0)% |
|
(10.8)% |
|
2.8% |
Asia |
306.3 |
297.8 |
|
2.9% |
|
(8.9)% |
|
11.8% |
OEM |
272.6 |
245.7 |
|
11.0% |
|
(2.4)% |
|
13.4% |
Consolidated |
$2,791.0 |
$2,809.6 |
|
(0.7)% |
|
(3.6)% |
|
2.9% |
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 twelve
months ended December 31, 2022 and December 31, 2021 on
both a GAAP and constant currency basis.
|
Three Months Ended |
|
% Increase / (Decrease) |
|
December 31, 2022 |
December 31, 2021 |
|
Reported Revenue Growth |
|
Currency Impact |
|
Constant Currency Revenue Growth |
Vascular Access |
$186.4 |
$193.0 |
|
(3.4)% |
|
(3.9)% |
|
0.5% |
Interventional |
125.1 |
114.9 |
|
8.8% |
|
(4.6)% |
|
13.4% |
Anesthesia |
99.6 |
102.8 |
|
(3.1)% |
|
(5.1)% |
|
2.0% |
Surgical |
110.4 |
106.4 |
|
3.9% |
|
(6.5)% |
|
10.4% |
Interventional Urology |
89.2 |
92.9 |
|
(4.1)% |
|
(0.5)% |
|
(3.6)% |
OEM |
73.7 |
67.2 |
|
9.7% |
|
(2.3)% |
|
12.0% |
Other |
73.6 |
84.7 |
|
(13.1)% |
|
(6.0)% |
|
(7.1)% |
Consolidated |
$758.0 |
$761.9 |
|
(0.5)% |
|
(4.2)% |
|
3.7% |
|
Year Ended |
|
% Increase / (Decrease) |
|
December 31, 2022 |
December 31, 2021 |
|
Reported Revenue Growth |
|
Currency Impact |
|
Constant Currency Revenue Growth |
Vascular Access |
$683.6 |
$700.2 |
|
(2.4)% |
|
(3.3)% |
|
0.9% |
Interventional |
445.0 |
427.5 |
|
4.1% |
|
(3.5)% |
|
7.6% |
Anesthesia |
388.9 |
380.1 |
|
2.3% |
|
(4.5)% |
|
6.8% |
Surgical |
392.9 |
377.8 |
|
4.0% |
|
(5.1)% |
|
9.1% |
Interventional Urology |
322.8 |
341.7 |
|
(5.5)% |
|
(0.3)% |
|
(5.2)% |
OEM |
272.6 |
245.7 |
|
11.0% |
|
(2.4)% |
|
13.4% |
Other |
285.2 |
336.6 |
|
(15.3)% |
|
(5.4)% |
|
(9.9)% |
Consolidated |
$2,791.0 |
$2,809.6 |
|
(0.7)% |
|
(3.6)% |
|
2.9% |
OTHER FINANCIAL HIGHLIGHTS
- Depreciation expense, amortization of
intangible assets and deferred financing charges for the twelve
months ended December 31, 2022 totaled $234.6 million compared
to $241.9 million for the prior year period.
- Cash and cash equivalents at December 31, 2022 were $292.0
million compared to $445.1 million at December 31, 2021.
- Net accounts receivable at December 31, 2022 were
408.8 million compared to $383.6 million at December 31,
2021.
- Inventories at December 31, 2022 were $578.5 million
compared to $477.6 million at December 31, 2021.
2023 OUTLOOK On a GAAP basis,
full year 2023 revenue growth outlook is expected to be 4.25% to
5.75%, reflecting our estimate of an approximately 0.50% negative
impact of foreign exchange rate fluctuations. On a constant
currency basis, the Company expects full year 2023 revenue growth
of 4.75% to 6.25% year-over-year.
The Company expects full year 2023 GAAP diluted earnings per
share from continuing operations of $8.26 to $8.86. The Company
expects 2023 adjusted diluted earnings per share from continuing
operations of $13.00 to $13.60, representing growth of (0.5)% to
4.1% year-over-year.
Forecasted 2023
Constant Currency Revenue Growth
Reconciliation
|
Low |
|
High |
Forecasted 2023 GAAP revenue growth |
4.25% |
|
5.75% |
Estimated impact of foreign currency exchange rate
fluctuations |
(0.50)% |
|
(0.50)% |
Forecasted 2023 constant currency revenue growth |
4.75% |
|
6.25% |
Forecasted 2023
Adjusted Diluted Earnings Per Share From Continuing
Operations Reconciliation
|
Low |
|
High |
Forecasted GAAP diluted earnings per share from continuing
operations |
$8.26 |
|
$8.86 |
Restructuring, restructuring related and impairment items, net of
tax |
$0.55 |
|
$0.55 |
Acquisition, integration and divestiture related items, net of
tax |
$0.18 |
|
$0.18 |
Other items, net of tax |
$0.05 |
|
$0.05 |
MDR |
$0.65 |
|
$0.65 |
Intangible amortization expense, net of tax |
$3.31 |
|
$3.31 |
Forecasted adjusted diluted earnings per share from continuing
operations |
$13.00 |
|
$13.60 |
|
|
|
|
CONFERENCE CALL WEBCAST AND ADDITIONAL
INFORMATIONA webcast of Teleflex's fourth 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 February 23, 2023.
An audio replay of the investor call will be available beginning
at 11:00 am ET on February 23, 2023, either on the Teleflex
website or by telephone. The call can be accessed by dialing 1 866
813 9403 (U.S.) or +44 204 525 0658 (all other locations). The
confirmation code is 903856.
ADDITIONAL NOTESReferences in this release to
the impact of foreign currency exchange rate fluctuations on
adjusted diluted earnings per share include both the impact of
translating foreign currencies into U.S. dollars and the impact of
foreign currency exchange rate fluctuations on foreign currency
denominated transactions.
In the discussion of segment results, "new products" refers to
products for which we initiated commercial sales within the past 36
months and "existing products" refers to products we have sold
commercially for more than 36 months.
Certain financial information is presented on a rounded basis,
which may cause minor differences. Segment results and commentary
exclude the impact of discontinued operations.
NOTES ON NON-GAAP FINANCIAL MEASURESWe report
our financial results in accordance with accounting principles
generally accepted in the United States, commonly referred to as
“GAAP.” In this press release, we provide supplemental information,
consisting of the following non-GAAP financial measures: constant
currency revenue growth and adjusted diluted earnings per share.
These non-GAAP measures are described in more detail below.
Management uses these financial measures to assess Teleflex’s
financial performance, make operating decisions, allocate financial
resources, provide guidance on possible future results, and assist
in its evaluation of period-to-period and peer comparisons. The
non-GAAP measures may be useful to investors because they provide
insight into management’s assessment of our business, and provide
supplemental information pertinent to a comparison of
period-to-period results of our ongoing operations. The non-GAAP
financial measures are presented in addition to results presented
in accordance with GAAP and should not be relied upon as a
substitute for GAAP financial measures. Moreover, our non-GAAP
financial measures may not be comparable to similarly titled
measures used by other companies.
Tables reconciling changes in historical constant currency net
revenues to historical GAAP net revenues are set forth above under
“Net Revenue by Segment" and "Net Revenue by Global Product
Category". Tables reconciling historical adjusted diluted earnings
per share from continuing operations to historical GAAP diluted
earnings per share from continuing operations are set forth
below.
Constant currency revenue growth: This non-GAAP
measure is based upon net revenues, adjusted to eliminate the
impact of translating the results of international subsidiaries at
different currency exchange rates from period to period. The impact
of changes in foreign currency may vary significantly from period
to period, and such changes generally are outside of the control of
our management. We believe that this measure facilitates a
comparison of our operating performance exclusive of currency
exchange rate fluctuations that do not reflect our underlying
performance or business trends.
Adjusted diluted earnings per share: This
non-GAAP measure is based upon diluted earnings per share from
continuing operations, the most directly comparable GAAP measure,
adjusted to exclude, depending on the period presented, the items
described below. Management does not believe that any of the
excluded items are indicative of our underlying core performance or
business trends.
Restructuring, restructuring related and impairment items -
Restructuring programs involve discrete initiatives designed to,
among other things, consolidate or relocate manufacturing,
administrative and other facilities, outsource distribution
operations, improve operating efficiencies and integrate acquired
businesses. Depending on the specific restructuring program
involved, our restructuring charges may include employee
termination, contract termination, facility closure, employee
relocation, equipment relocation, outplacement and other exit costs
associated with the restructuring program. Restructuring
related charges are directly related to our restructuring programs
and consist of facility consolidation costs, including accelerated
depreciation expense related to facility closures, costs to
transfer manufacturing operations between locations, and retention
bonuses offered to certain employees as an incentive for them to
remain with our company after completion of the restructuring
program. Impairment charges occur if, due to events or changes in
circumstances, we determine that the carrying value of an asset
exceeds its fair value. Impairment charges do not directly affect
our liquidity, but could have a material adverse effect on our
reported financial results.
Acquisition, integration and divestiture related items -
Acquisition and integration expenses are incremental charges, other
than restructuring or restructuring related expenses, that are
directly related to specific business or asset acquisition
transactions. These charges may include, among other things,
professional, consulting and other fees; systems integration costs;
legal entity restructuring expense; inventory step-up amortization
(amortization, through cost of goods sold, of the increase in fair
value of inventory resulting from a fair value calculation as of
the acquisition date); fair value adjustments to contingent
consideration liabilities; and bridge loan facility and backstop
financing fees in connection with loan facilities that ultimately
were not utilized. Divestiture related activities involve specific
business or asset sales. Depending primarily on the terms of
a divestiture transaction, the carrying value of the divested
business or assets on our financial statements and other costs we
incur as a direct result of the divestiture transaction, we may
recognize a gain or loss in connection with the divestiture related
activities.
Other - These are discrete items that occur sporadically and can
affect period-to-period comparisons. See footnote C to the
reconciliation tables set forth below for additional details.
European medical device regulation - The European Union (“EU”)
has adopted the EU Medical Device Regulation (“MDR”), which
replaces the existing Medical Devices Directive (“MDD”) and imposes
more stringent requirements for the marketing and sale of medical
devices in the EU, including requirements affecting clinical
evaluations, quality systems and post-market surveillance.
The MDR requirements became effective in May 2021, although certain
devices that previously satisfied MDD requirements can continue to
be marketed in the EU until May 2024, subject to certain
limitations. 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 December 31, 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 |
55.7% |
30.8% |
5.6% |
17.0% |
$109.4 |
$31.3 |
28.6% |
$1.65 |
Adjustments |
|
|
|
|
|
|
|
|
Restructuring, restructuring related and impairment items (A) |
1.2 |
— |
— |
3.5 |
26.9 |
(6.3) |
|
0.70 |
Acquisition, integration and divestiture related items (B) |
— |
(0.4) |
— |
0.4 |
2.7 |
0.1 |
|
0.06 |
Other items (C) |
— |
(0.1) |
— |
0.1 |
1.1 |
0.3 |
|
0.02 |
MDR |
— |
— |
(1.3) |
1.4 |
10.3 |
— |
|
0.22 |
Intangible amortization expense |
3.1 |
(2.4) |
— |
5.5 |
42.2 |
2.3 |
|
0.84 |
Tax adjustments |
— |
— |
— |
— |
— |
(1.4) |
|
0.03 |
Adjustments total |
4.3 |
(2.9) |
(1.3) |
10.9 |
83.2 |
(5.0) |
|
1.87 |
Adjusted basis |
60.0% |
27.9% |
4.3% |
27.9% |
$192.6 |
$26.3 |
13.6% |
$3.52 |
Three
Months Ended December 31, 2021 |
|
Grossmargin |
Selling, general and administrative expenses
(1) |
Research and development expenses
(1) |
Operating margin (2) |
Income before income taxes |
Income tax expense |
Effective income tax rate |
Diluted earnings per share from continuing
operations |
GAAP Basis |
55.1% |
29.9% |
4.7% |
20.4% |
$143.3 |
$15.8 |
11.0% |
$2.69 |
Adjustments |
|
|
|
|
|
|
|
|
Restructuring, restructuring related and impairment items (A) |
1.1 |
(0.2) |
— |
1.4 |
10.5 |
(0.1) |
|
0.22 |
Acquisition, integration and divestiture related items (B) |
— |
0.3 |
— |
(0.4) |
(2.7) |
— |
|
(0.06) |
Other items (C) |
(0.3) |
— |
— |
(0.3) |
(2.2) |
(0.6) |
|
(0.03) |
MDR |
— |
— |
(1.1) |
1.1 |
8.7 |
— |
|
0.18 |
Intangible amortization expense |
2.9 |
(2.4) |
— |
5.4 |
40.8 |
4.6 |
|
0.76 |
Tax adjustments |
— |
— |
— |
— |
— |
7.7 |
|
(0.16) |
Adjustments total |
3.7 |
(2.3) |
(1.1) |
7.2 |
55.1 |
11.6 |
|
0.91 |
Adjusted basis |
58.8% |
27.6% |
3.6% |
27.6% |
$198.4 |
$27.4 |
13.8% |
$3.60 |
Year Ended
December 31, 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 |
54.9% |
30.9% |
5.5% |
17.9% |
$445.9 |
$83.0 |
18.6% |
$7.67 |
Adjustments |
|
|
|
|
|
|
|
|
Restructuring, restructuring related and impairment items (A) |
1.1 |
— |
— |
1.9 |
52.2 |
(4.0) |
|
1.19 |
Acquisition, integration and divestiture related items (B) |
— |
(0.2) |
— |
(0.1) |
(1.8) |
(1.3) |
|
(0.01) |
Other items (C) |
— |
— |
— |
— |
1.1 |
0.3 |
|
0.02 |
MDR |
— |
— |
(1.4) |
1.4 |
39.7 |
— |
|
0.84 |
Intangible amortization expense |
3.2 |
(2.6) |
— |
5.9 |
164.1 |
6.8 |
|
3.32 |
Tax adjustments |
— |
— |
— |
— |
— |
(1.4) |
|
0.03 |
Adjustments total |
4.3 |
(2.8) |
(1.4) |
9.1 |
255.3 |
0.4 |
|
5.39 |
Adjusted basis |
59.2% |
28.1% |
4.1% |
27.0% |
$701.2 |
$83.4 |
11.9% |
$13.06 |
Year Ended
December 31, 2021 |
|
Gross margin |
Selling, general and administrative expenses
(1) |
Research and development expenses
(1) |
Operating margin (2) |
Income before income taxes |
Income tax expense |
Effective income tax rate |
Diluted earnings per share from continuing
operations |
GAAP Basis |
55.2% |
30.6% |
4.7% |
22.4% |
$559.5 |
$74.3 |
13.3% |
$10.23 |
Adjustments |
|
|
|
|
|
|
|
|
Restructuring, restructuring related and impairment items (A) |
1.0 |
(0.1) |
— |
1.9 |
52.9 |
4.3 |
|
1.03 |
Acquisition, integration and divestiture related items (B) |
0.1 |
(0.4) |
— |
(2.7) |
(75.7) |
(14.6) |
|
(1.29) |
Other items (C) |
(0.1) |
0.2 |
— |
(0.3) |
4.5 |
2.2 |
|
0.04 |
MDR |
— |
— |
(0.9) |
0.8 |
22.9 |
— |
|
0.48 |
Intangible amortization expense |
3.2 |
(2.7) |
— |
5.9 |
165.6 |
25.5 |
|
2.96 |
Tax adjustments |
— |
— |
— |
— |
— |
5.8 |
|
(0.12) |
Adjustments total |
4.2 |
(3.0) |
(0.9) |
5.6 |
170.2 |
23.2 |
|
3.10 |
Adjusted basis |
59.4% |
27.6% |
3.8% |
28.0% |
$729.7 |
$97.5 |
13.4% |
$13.33 |
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 December 31, 2022, pre-tax
restructuring charges were $17.3 million and restructuring related
charges were $9.5 million. For the three months ended December 31,
2021, pre-tax restructuring charges were $1.3 million; and pre-tax
restructuring related charges were $9.2 million. For the year ended
December 31, 2022, pre-tax restructuring charges were $18.8
million, restructuring related charges were $31.9 million, and
impairment charges were $1.5 million. For the year ended December
31, 2021, pre-tax restructuring charges were $15 million; pre-tax
restructuring related charges were $31.2 million; and pre-tax
impairment charges were $6.7 million.
(B) Acquisition,
integration and divestiture related items – For the three
months ended December 31, 2022, these charges related to the
acquisition of Standard Bariatrics, Inc. For the three months ended
December 31, 2021, these charges primarily related to the reversal
of contingent consideration liabilities, charges related to our
divestiture of certain respiratory assets, and charges related to a
legal entity restructuring. For the year ended December 31, 2022,
these charges related to the acquisition of Standard Bariatrics,
Inc. and the gain related to a sale of a building. For the year
ended December 31, 2021, these items primarily related to a net
gain on our divestiture of certain respiratory assets, charges
related to contingent consideration liabilities, charges incurred
in connection with the Z-Medica, LLC acquisition, and a related
legal entity restructuring.
(C) Other –
For the three and twelve months ended December 31, 2022, other
items related to charges incurred in connection with a debt
extinguishment. For the three months ended December 31, 2021,
other items related to the reversal of a contingent liability
related to a foreign tax matter. For the year ended
December 31, 2021, other items were related to charges
incurred in connection with a debt extinguishment; the reversal of
contingent liabilities related to tariffs and another foreign tax
matter; and a benefit from a prior year tax matter.
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 unitedby 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, delays or cancellations in
shipments; demand for and market acceptance of new and existing
products; our inability to provide products to our customers, which
may be due to, among other things, events that impact key
distributors, suppliers and third-party vendors that sterilize our
products; our inability to integrate acquired businesses into our
operations, realize planned synergies and operate such businesses
profitably in accordance with our expectations; the inability of
acquired businesses to generate revenues in accordance with our
expectations; our inability to effectively execute our
restructuring plans and programs; our inability to realize
anticipated savings from restructuring plans and programs; the
impact of healthcare reform legislation and proposals to amend,
replace or repeal the legislation; changes in Medicare, Medicaid
and third party coverage and reimbursements; the impact of enacted
tax legislation and related regulations; competitive market
conditions and resulting effects on revenues and pricing; increases
in raw material costs that cannot be recovered in product pricing;
global economic factors, including currency exchange rates,
interest rates, trade disputes, sovereign debt issues and
international conflicts and hostilities, such as the ongoing
geopolitical conflict between Russia and Ukraine; public health
epidemics, including the novel coronavirus (referred to as
COVID-19); difficulties in entering new markets; general economic
conditions; and other factors described or incorporated in our
filings with the Securities and Exchange Commission, including our
most recently filed Annual Report on Form 10-K. We expressly
disclaim any obligation to update forward-looking statements,
except as otherwise specifically stated by us or as required by law
or regulation.
TELEFLEX
INCORPORATEDCONSOLIDATED STATEMENTS OF
INCOME(Unaudited)
|
Three Months Ended |
|
Twelve Months Ended |
|
December 31, 2022 |
|
December 31, 2021 |
|
December 31, 2022 |
|
December 31, 2021 |
|
(Dollars and shares in thousands, except per
share) |
Net revenues |
$ |
757,996 |
|
|
$ |
761,914 |
|
|
$ |
2,791,041 |
|
|
$ |
2,809,563 |
|
Cost of goods sold |
|
335,930 |
|
|
|
342,182 |
|
|
|
1,259,954 |
|
|
|
1,259,961 |
|
Gross profit |
|
422,066 |
|
|
|
419,732 |
|
|
|
1,531,087 |
|
|
|
1,549,602 |
|
Selling, general and administrative expenses |
|
233,375 |
|
|
|
227,584 |
|
|
|
863,748 |
|
|
|
860,085 |
|
Research and development expenses |
|
42,755 |
|
|
|
35,795 |
|
|
|
153,819 |
|
|
|
130,841 |
|
Restructuring and impairment
charges |
|
17,349 |
|
|
|
1,287 |
|
|
|
20,299 |
|
|
|
21,738 |
|
Gain on sale of assets and
business |
|
— |
|
|
|
|
|
(6,504 |
) |
|
|
(91,157 |
) |
Income from continuing operations before interest, loss on
extinguishment of debt and taxes |
|
128,587 |
|
|
|
155,066 |
|
|
|
499,725 |
|
|
|
628,095 |
|
Interest expense |
|
19,052 |
|
|
|
12,011 |
|
|
|
54,264 |
|
|
|
56,969 |
|
Interest income |
|
(335 |
) |
|
|
(222 |
) |
|
|
(912 |
) |
|
|
(1,328 |
) |
Loss on extinguishment of
debt |
|
454 |
|
|
|
— |
|
|
|
454 |
|
|
|
12,986 |
|
Income from continuing operations before taxes |
|
109,416 |
|
|
|
143,277 |
|
|
|
445,919 |
|
|
|
559,468 |
|
Taxes on income from
continuing operations |
|
31,303 |
|
|
|
15,814 |
|
|
|
83,003 |
|
|
|
74,349 |
|
Income from continuing operations |
|
78,113 |
|
|
|
127,463 |
|
|
|
362,916 |
|
|
|
485,119 |
|
Operating income (loss) from
discontinued operations |
|
589 |
|
|
|
801 |
|
|
|
260 |
|
|
|
331 |
|
Taxes (benefit) on operating
loss from discontinued operations |
|
113 |
|
|
|
185 |
|
|
|
37 |
|
|
|
76 |
|
Income (loss) from discontinued operations |
|
476 |
|
|
|
616 |
|
|
|
223 |
|
|
|
255 |
|
Net income |
$ |
78,589 |
|
|
$ |
128,079 |
|
|
$ |
363,139 |
|
|
$ |
485,374 |
|
Earnings per share: |
|
|
|
|
|
|
|
Basic: |
|
|
|
|
|
|
|
Income from continuing operations |
$ |
1.67 |
|
|
$ |
2.72 |
|
|
$ |
7.74 |
|
|
$ |
10.37 |
|
Income (loss) from discontinued operations |
|
0.01 |
|
|
|
0.01 |
|
|
|
— |
|
|
|
0.01 |
|
Net income |
$ |
1.68 |
|
|
$ |
2.73 |
|
|
$ |
7.74 |
|
|
$ |
10.38 |
|
Diluted: |
|
|
|
|
|
|
|
Income from continuing operations |
$ |
1.65 |
|
|
$ |
2.69 |
|
|
$ |
7.67 |
|
|
$ |
10.23 |
|
Income (loss) from discontinued operations |
|
0.01 |
|
|
|
0.01 |
|
|
|
0.01 |
|
|
|
— |
|
Net income |
$ |
1.66 |
|
|
$ |
2.70 |
|
|
$ |
7.68 |
|
|
$ |
10.23 |
|
Weighted average shares
outstanding: |
|
|
|
|
|
|
|
Basic |
|
46,908 |
|
|
|
46,849 |
|
|
|
46,898 |
|
|
|
46,774 |
|
Diluted |
|
47,226 |
|
|
|
47,417 |
|
|
|
47,309 |
|
|
|
47,427 |
|
TELEFLEX
INCORPORATEDCONSOLIDATED BALANCE
SHEETS(Unaudited)
|
December 31, 2022 |
|
December 31, 2021 |
|
(Dollars in thousands) |
ASSETS |
|
|
|
Current assets |
|
|
|
Cash and cash equivalents |
$ |
292,034 |
|
|
$ |
445,084 |
|
Accounts receivable, net |
|
408,834 |
|
|
|
383,569 |
|
Inventories |
|
578,507 |
|
|
|
477,643 |
|
Prepaid expenses and other current assets |
|
125,084 |
|
|
|
117,277 |
|
Prepaid taxes |
|
6,524 |
|
|
|
5,545 |
|
Total current assets |
|
1,410,983 |
|
|
|
1,429,118 |
|
Property, plant and equipment, net |
|
447,205 |
|
|
|
443,758 |
|
Operating lease assets |
|
131,211 |
|
|
|
129,653 |
|
Goodwill |
|
2,536,730 |
|
|
|
2,504,202 |
|
Intangibles assets, net |
|
2,306,165 |
|
|
|
2,289,067 |
|
Deferred tax assets |
|
6,402 |
|
|
|
6,820 |
|
Other assets |
|
89,367 |
|
|
|
69,104 |
|
Total assets |
$ |
6,928,063 |
|
|
$ |
6,871,722 |
|
LIABILITIES AND
EQUITY |
|
|
|
Current liabilities |
|
|
|
Current borrowings |
$ |
87,500 |
|
|
$ |
110,000 |
|
Accounts payable |
|
126,807 |
|
|
|
118,236 |
|
Accrued expenses |
|
140,644 |
|
|
|
163,441 |
|
Payroll and benefit-related liabilities |
|
133,092 |
|
|
|
143,657 |
|
Accrued interest |
|
5,332 |
|
|
|
5,209 |
|
Income taxes payable |
|
24,736 |
|
|
|
83,943 |
|
Other current liabilities |
|
63,381 |
|
|
|
55,633 |
|
Total current liabilities |
|
581,492 |
|
|
|
680,119 |
|
Long-term borrowings |
|
1,624,023 |
|
|
|
1,740,102 |
|
Deferred tax liabilities |
|
388,886 |
|
|
|
370,124 |
|
Pension and postretirement benefit liabilities |
|
31,394 |
|
|
|
45,185 |
|
Noncurrent liability for uncertain tax positions |
|
5,805 |
|
|
|
8,646 |
|
Noncurrent operating lease
liabilities |
|
120,437 |
|
|
|
116,033 |
|
Other liabilities |
|
154,058 |
|
|
|
156,765 |
|
Total liabilities |
|
2,906,095 |
|
|
|
3,116,974 |
|
Commitments and
contingencies |
|
|
|
Shareholders’ equity |
|
|
|
Common shares, $1 par value Issued: 2022 — 47,957 shares; 2021
— 47,929 shares |
|
47,957 |
|
|
|
47,929 |
|
Additional paid-in capital |
|
715,118 |
|
|
|
693,090 |
|
Retained earnings |
|
3,817,304 |
|
|
|
3,517,954 |
|
Accumulated other comprehensive loss |
|
(403,522 |
) |
|
|
(346,959 |
) |
|
|
4,176,857 |
|
|
|
3,912,014 |
|
Less: Treasury stock, at cost |
|
154,889 |
|
|
|
157,266 |
|
Total shareholders' equity |
|
4,021,968 |
|
|
|
3,754,748 |
|
Total liabilities and shareholders' equity |
$ |
6,928,063 |
|
|
$ |
6,871,722 |
|
TELEFLEX
INCORPORATEDCONSOLIDATED STATEMENTS OF CASH
FLOWS(Unaudited)
|
Year Ended |
|
December 31, 2022 |
|
December 31, 2021 |
|
(Dollars in thousands) |
Cash flows from operating
activities of continuing operations: |
|
|
|
Net income |
$ |
363,139 |
|
|
$ |
485,374 |
|
Adjustments to reconcile net income to net cash provided by
operating activities: |
|
|
|
(Income) loss from discontinued operations |
|
(223 |
) |
|
|
(255 |
) |
Depreciation expense |
|
66,502 |
|
|
|
71,758 |
|
Intangible asset amortization expense |
|
164,088 |
|
|
|
165,604 |
|
Deferred financing costs and debt discount amortization
expense |
|
4,053 |
|
|
|
4,493 |
|
Loss on extinguishment of debt |
|
454 |
|
|
|
12,986 |
|
Fair value step up of acquired inventory sold |
|
— |
|
|
|
3,993 |
|
Changes in contingent consideration |
|
2,350 |
|
|
|
8,475 |
|
Assets impairment charges |
|
1,497 |
|
|
|
6,739 |
|
Stock-based compensation |
|
27,224 |
|
|
|
22,937 |
|
Gain on sale of assets and business |
|
(6,504 |
) |
|
|
(91,157 |
) |
Deferred income taxes, net |
|
(13,008 |
) |
|
|
(110,239 |
) |
Payments for contingent consideration |
|
(3,016 |
) |
|
|
(230 |
) |
Interest benefit on swaps designated as net investment hedges |
|
(20,880 |
) |
|
|
(19,296 |
) |
Other |
|
(2,906 |
) |
|
|
(36,388 |
) |
Changes in operating assets and liabilities, net of effects of
acquisitions and disposals: |
|
|
|
Accounts receivable |
|
(38,459 |
) |
|
|
(600 |
) |
Inventories |
|
(110,686 |
) |
|
|
(11,138 |
) |
Prepaid expenses and other current assets |
|
13,420 |
|
|
|
(28,410 |
) |
Accounts payable, accrued expenses and other liabilities |
|
(24,786 |
) |
|
|
94,020 |
|
Income taxes |
|
(79,453 |
) |
|
|
73,473 |
|
Net cash provided by operating activities from continuing
operations |
|
342,806 |
|
|
|
652,139 |
|
Cash flows from investing
activities of continuing operations: |
|
|
|
Expenditures for property, plant and equipment |
|
(79,190 |
) |
|
|
(71,618 |
) |
Payments for businesses and intangibles acquired, net of cash
acquired |
|
(198,429 |
) |
|
|
(4,590 |
) |
Proceeds from sales of business and assets |
|
12,434 |
|
|
|
224,909 |
|
Net interest proceeds on swaps designated as net investment
hedges |
|
20,775 |
|
|
|
19,154 |
|
Proceeds from sales of investments |
|
7,300 |
|
|
|
7,300 |
|
Purchase of investments |
|
(22,300 |
) |
|
|
(18,418 |
) |
Net cash (used in) provided by investing activities from continuing
operations |
|
(259,410 |
) |
|
|
156,737 |
|
Cash flows from financing
activities of continuing operations: |
|
|
|
Proceeds from new borrowings |
|
744,250 |
|
|
|
400,000 |
|
Reduction in borrowings |
|
(884,500 |
) |
|
|
(1,034,500 |
) |
Debt extinguishment, issuance and amendment fees |
|
(5,200 |
) |
|
|
(9,774 |
) |
Net proceeds from share based compensation plans and the related
tax impacts |
|
(4,308 |
) |
|
|
12,451 |
|
Payments for contingent consideration |
|
(3,959 |
) |
|
|
(31,448 |
) |
Dividends paid |
|
(63,789 |
) |
|
|
(63,648 |
) |
Proceeds from sale of treasury stock |
|
— |
|
|
|
11,097 |
|
Net cash (used in) provided by financing activities from continuing
operations |
|
(217,506 |
) |
|
|
(715,822 |
) |
Cash flows from discontinued
operations: |
|
|
|
Net cash used in operating activities |
|
(665 |
) |
|
|
(720 |
) |
Net cash provided by investing activities |
|
1,469 |
|
|
|
— |
|
Net cash provided by (used in) discontinued operations |
|
804 |
|
|
|
(720 |
) |
Effect of exchange rate changes on cash and cash equivalents |
|
(19,744 |
) |
|
|
(23,130 |
) |
Net (decrease) increase in cash and cash equivalents |
|
(153,050 |
) |
|
|
69,204 |
|
Cash and cash equivalents at the beginning of the year |
|
445,084 |
|
|
|
375,880 |
|
Cash and cash equivalents at the end of the year |
$ |
292,034 |
|
|
$ |
445,084 |
|
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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