Teleflex Incorporated (NYSE: TFX) (the “Company”) today announced
financial results for the second quarter ended June 30, 2024.
Second quarter financial
summary
- GAAP revenue of $749.7 million,
up 0.9% compared to the prior year period
- Adjusted revenue of
$763.5 million, excluding the impact from increases in our
reserves related to the Italian payback measure pertaining to prior
years, up 2.7% compared to the prior year period, up 3.4% on a
constant currency basis.1
- GAAP diluted EPS from continuing
operations of $1.69, compared to $2.35 in the prior year
period
- Adjusted diluted EPS from continuing
operations of $3.42, compared to $3.41 in the prior year
period
2024 guidance summary
- Raising GAAP revenue growth guidance
range to 3.40% to 4.40%
- Raising adjusted constant currency
revenue growth guidance range to 4.25% to 5.25%, which excludes the
impact from increases in our reserves related to the Italian
payback measure pertaining to prior years1
- Lowering GAAP EPS from continuing
operations guidance range to $6.43 to $6.83
- Raising adjusted diluted EPS from
continuing operations guidance range to $13.80 to $14.20
Share repurchase program
- Announced share
repurchase authorization for up to $500 million of common stock,
including the commencement of an accelerated share repurchase
program for $200 million
"The second quarter was consistent with our
strategic focus on durable revenue growth." said Liam Kelly,
Teleflex's Chairman, President and Chief Executive Officer.
"Revenue momentum for Barrigel remained strong, and we continued to
be on track with our integration of Palette Life Sciences AB. Our
first half results reflect the benefits of our diversified product
portfolio and corporate strategy for growth. As a sign of
confidence, our Board of Directors has authorized a share
repurchase program for up to $500 million of our common stock,
inclusive of a $200 million accelerated share repurchase. The
Teleflex Board of Directors and Management remain confident in the
company’s long-term growth profile and ability to create
significant shareholder value. Our strong balance sheet allows us
to opportunistically repurchase shares as part of a broader capital
allocation strategy while not compromising the company’s capacity
to invest in the growth of our business, including the execution of
value creating M&A opportunities.”
(1) Refer to Notes on Non-GAAP Financial Measures
for detail on Italian payback measure.
NET REVENUE BY SEGMENTThe
following table provides information regarding net revenues in each
of the Company's reportable operating segments for the three and
six months ended June 30, 2024 and the comparable prior year
periods on a GAAP, adjusted and adjusted constant currency
basis.
|
|
Three Months Ended |
| |
As reported |
|
Adjusted |
|
|
June 30, 2024 |
July 2, 2023 |
Reported Revenue Growth |
|
June 30, 2024 |
July 2, 2023 |
Adjusted Constant Currency Revenue Growth |
|
Americas |
$426.8 |
$424.7 |
0.5% |
|
$426.8 |
$424.7 |
0.6% |
|
EMEA |
147.1 |
147.8 |
(0.5)% |
|
160.9 |
147.8 |
9.8% |
|
Asia |
87.0 |
86.7 |
0.4% |
|
87.0 |
86.7 |
4.0% |
|
OEM |
88.8 |
84.1 |
5.6% |
|
88.8 |
84.1 |
5.8% |
|
Consolidated |
$749.7 |
$743.3 |
0.9% |
|
$763.5 |
$743.3 |
3.4% |
|
|
Six Months Ended |
| |
As reported |
|
Adjusted |
|
|
June 30, 2024 |
July 2, 2023 |
Reported Revenue Growth |
|
June 30, 2024 |
July 2, 2023 |
Adjusted Constant Currency Revenue Growth |
|
Americas |
$833.1 |
$836.5 |
(0.4)% |
|
$833.1 |
$836.5 |
(0.5)% |
|
EMEA |
306.7 |
291.2 |
5.3% |
|
320.5 |
291.2 |
9.7% |
|
Asia |
171.2 |
165.4 |
3.5% |
|
171.2 |
165.4 |
7.4% |
|
OEM |
176.5 |
161.1 |
9.6% |
|
176.5 |
161.1 |
9.5% |
|
Consolidated |
$1,487.5 |
$1,454.2 |
2.3% |
|
$1,501.3 |
$1,454.2 |
3.6% |
|
|
|
|
|
|
|
|
|
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 six months ended June 30, 2024 and the
comparable prior year periods on a GAAP, adjusted and adjusted
constant currency basis.
|
|
Three Months Ended |
| |
As reported |
|
Adjusted |
|
|
June 30, 2024 |
July 2, 2023 |
Reported Revenue Growth |
|
June 30, 2024 |
July 2, 2023 |
Adjusted Constant Currency Revenue Growth |
|
Vascular Access |
$181.1 |
$173.8 |
4.2% |
|
$181.1 |
$173.8 |
4.8% |
|
Interventional |
141.2 |
124.8 |
13.1% |
|
141.2 |
124.8 |
13.8% |
|
Anesthesia |
102.5 |
100.8 |
1.6% |
|
102.5 |
100.8 |
2.3% |
|
Surgical |
111.3 |
106.0 |
5.1% |
|
111.3 |
106.0 |
6.4% |
|
Interventional Urology |
83.1 |
77.8 |
6.8% |
|
83.1 |
77.8 |
7.1% |
|
OEM |
88.8 |
84.1 |
5.6% |
|
88.8 |
84.1 |
5.8% |
|
Other (1) |
41.7 |
76.0 |
(45.1)% |
|
55.5 |
76.0 |
(26.4)% |
|
Consolidated |
$749.7 |
$743.3 |
0.9% |
|
$763.5 |
$743.3 |
3.4% |
|
|
Six Months Ended |
| |
As reported |
|
Adjusted |
|
|
June 30, 2024 |
July 2, 2023 |
Reported Revenue Growth |
|
June 30, 2024 |
July 2, 2023 |
Adjusted Constant Currency Revenue Growth |
|
Vascular Access |
$362.5 |
$351.4 |
3.1% |
|
$362.5 |
$351.4 |
3.4% |
|
Interventional |
275.8 |
241.7 |
14.1% |
|
275.8 |
241.7 |
14.6% |
|
Anesthesia |
198.8 |
194.2 |
2.4% |
|
198.8 |
194.2 |
2.7% |
|
Surgical |
216.8 |
205.0 |
5.8% |
|
216.8 |
205.0 |
6.7% |
|
Interventional Urology |
162.8 |
153.2 |
6.3% |
|
162.8 |
153.2 |
6.6% |
|
OEM |
176.5 |
161.1 |
9.6% |
|
176.5 |
161.1 |
9.5% |
|
Other (1) |
94.3 |
147.6 |
(36.2)% |
|
108.1 |
147.6 |
(26.8)% |
|
Consolidated |
$1,487.5 |
$1,454.2 |
2.3% |
|
$1,501.3 |
$1,454.2 |
3.6% |
(1) In 2024, amounts reflect the impact from
increases in our reserves related to the Italian payback measure
pertaining to prior years.
OTHER FINANCIAL HIGHLIGHTS
-
Depreciation expense, amortization of intangible assets and
deferred financing charges for the six months ended June 30,
2024 totaled $135.9 million compared to $122.0 million for the
prior year period.
- Cash and cash equivalents at
June 30, 2024 were $238.6 million compared to
$222.8 million at December 31, 2023.
- Net accounts receivable at
June 30, 2024 were $448.9 million compared to
$443.5 million at December 31, 2023.
- Inventories at June 30, 2024 were
$636.9 million compared to $626.2 million at December 31,
2023.
2024 OUTLOOK The
Company increased its full year 2024 revenue growth outlook on a
GAAP basis from a range of 3.35% to 4.35% to a range of 3.40% to
4.40%, reflecting the impact from increases in our reserves for the
three and six months ended June 30, 2024 related to the
Italian payback measure pertaining to prior years and our estimate
of an approximately 0.40% negative impact of foreign exchange rate
fluctuations. On an adjusted constant currency basis, which
excludes the impact from the Italian payback measure pertaining to
prior years, the Company raised its full year 2024 revenue growth
outlook from a range of 3.75% to 4.75% to a range of 4.25% to 5.25%
year-over-year.
The Company lowered its full year 2024 GAAP diluted
earnings per share from continuing operations outlook from a range
of $6.87 to $7.22 to a range of $6.43 to $6.83, representing a
year-over-year change of (14.9)% to (9.7)%. The Company raised its
full year 2024 adjusted diluted earnings per share from continuing
operations guidance from a range of $13.60 to $13.95 to a range of
$13.80 to $14.20, representing growth of 2.1% to 5.0%
year-over-year.
Forecasted 2024
Adjusted Constant Currency Revenue Growth
Reconciliation
|
|
Low |
|
High |
|
Forecasted 2024 GAAP revenue growth |
3.40% |
|
4.40% |
|
Estimated impact of foreign currency exchange rate
fluctuations |
(0.40)% |
|
(0.40)% |
|
Italian payback measure |
(0.45)% |
|
(0.45)% |
|
Forecasted 2024 adjusted constant currency revenue growth |
4.25% |
|
5.25% |
|
|
|
|
|
Forecasted 2024
Adjusted Diluted Earnings Per Share From Continuing
Operations Reconciliation
|
|
Low |
|
High |
| Forecasted GAAP diluted
earnings per share from continuing operations |
$6.43 |
|
$6.83 |
| Restructuring, restructuring
related and impairment items, net of tax |
$0.59 |
|
$0.59 |
| Acquisition, integration and
divestiture related items, net of tax |
$0.35 |
|
$0.35 |
| Pension termination and
related charges, net of tax |
$1.77 |
|
$1.77 |
| ERP Implementation, net of
tax |
$0.33 |
|
$0.33 |
| MDR, net of tax |
$0.19 |
|
$0.19 |
| Italian payback measure, net
of tax |
$0.29 |
|
$0.29 |
| Intangible amortization
expense, net of tax |
$3.81 |
|
$3.81 |
| Tax adjustments |
$0.04 |
|
$0.04 |
| Forecasted adjusted diluted
earnings per share from continuing operations, net of tax |
$13.80 |
|
$14.20 |
| |
|
|
|
SHARE REPURCHASE PROGRAMThe Board
of Directors has authorized a share repurchase program for up to
$500 million of the Company’s common stock. The timing, price and
actual number of shares of Common Stock that may be repurchased
under the share repurchase authorization will depend on a variety
of factors including price, market conditions and corporate and
regulatory requirements. The repurchases may occur in open market
transactions, transactions structured through investment banking
institutions, in privately negotiated transactions, by direct
purchases of common stock or a combination of the foregoing, and
the timing and amount of stock repurchased will depend on market
and business conditions, applicable legal and credit requirements
and other corporate considerations. The share repurchase program
does not require the Company to repurchase shares of its Common
Stock and it may be discontinued, suspended or amended at any time,
without prior notice. The Company intends to commence an
accelerated share repurchase of $200 million of common stock under
the share repurchase program, effective August 2, 2024.
CONFERENCE CALL WEBCAST AND ADDITIONAL
INFORMATIONA webcast of Teleflex's second quarter 2024
investor conference call can be accessed live from a link on the
Company's website at teleflex.com. The call will begin at 8:00 am
ET on August 1, 2024.
An audio replay of the investor call will be
available beginning at 11:00 am ET on August 1, 2024, either
on the Teleflex website or by telephone. The call can be accessed
by dialing 1 800 770 2030 (U.S. and Canada) or 1 609 800 9909 (all
other locations). The confirmation code is 69028.
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: adjusted revenue, adjusted 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 adjusted
constant currency net revenues and adjusted net revenues to
historical GAAP net revenues and historical adjusted diluted
earnings per share from continuing operations to historical GAAP
diluted earnings per share from continuing operations are set forth
below.
Adjusted revenue: This non-GAAP
measure is based upon net revenues, adjusted to exclude the impact
in the three and six months ended June 30, 2024 of an increase in
our reserves, and corresponding reduction to revenue within our
EMEA segment, for prior years. The reserve relates to the Italian
payback measure, a law that requires suppliers of medical devices
to the Italian National Healthcare System to make payments to the
Italian government if medical device expenditures in a given year
exceed regional expenditure ceilings established for that year. As
a result of a recent ruling from the Italian courts, we recognized
a $15.8 million increase in our reserves during the three and six
months ended June 30, 2024, of which $13.8 million related to prior
years. The prior year amounts do not represent normal adjustments
to revenue, are not expected to recur in future periods and are not
recurring in nature, making it difficult to contribute to a
meaningful evaluation of our operating performance. Accordingly,
management has excluded the $13.8 million prior year amount as it
is not indicative of our underlying core performance or business
trends.
Adjusted constant currency revenue
growth: This non-GAAP measure is based upon net revenues,
adjusted to exclude, depending on the period presented, the items
described in Adjusted revenue and 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; 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.
Italian payback measure - These adjustments
represent the exclusion of the impact from increases in our
reserves related to the Italian payback measure pertaining to prior
years as described in Adjusted revenue.
Pension termination and related charges - These
adjustments represent charges associated with the planned
termination of the Teleflex Incorporated Retirement Income Plan, a
frozen U.S. defined benefit pension plan, and related direct
incremental expenses including certain charges stemming from the
liquidation of surplus plan assets. These charges and costs do not
represent normal and recurring operating expenses, will be
inconsistent in amounts and frequency, and are not expected to
recur once the plan termination process has been completed.
Accordingly, management has excluded these amounts to facilitate an
evaluation of our current operating performance and a comparison to
our past operating performance.
European medical device regulation - The European
Union (“EU”) has adopted the EU Medical Device Regulation (“MDR”),
which replaces the existing Medical Devices Directive (“MDD”) and
imposes more stringent requirements for the marketing and sale of
medical devices in the EU, including requirements affecting
clinical evaluations, quality systems and post-market surveillance.
The MDR requirements became effective in May 2021, although certain
devices that previously satisfied MDD requirements can continue to
be marketed in the EU until December 2027 for highest-risk devices
and December 2028 for lower-risk devices, subject to certain
limitations. Significantly, the MDR will require the
re-registration of previously approved medical devices. As a
result, Teleflex will incur expenditures in connection with the new
registration of medical devices that previously had been registered
under the MDD. Therefore, these expenditures are not considered to
be ordinary course expenditures in connection with regulatory
matters (in contrast, no adjustment has been made to exclude
expenditures related to the registration of medical devices that
were not registered previously under the MDD).
Intangible amortization expense - Certain
intangible assets, including customer relationships, intellectual
property, distribution rights, trade names and non-competition
agreements, initially are recorded at historical cost and then
amortized over their respective estimated useful lives. The amount
of such amortization can vary from period to period as a result of,
among other things, business or asset acquisitions or
dispositions.
ERP implementation - These adjustments represent
direct and incremental costs incurred in connection with our
implementation of a new global enterprise resource planning ("ERP")
solution and related IT transition costs. An implementation of this
scale is a significant undertaking and will require substantial
time and attention of management and key employees. The associated
costs do not represent normal and recurring operating expenses and
will be inconsistent in amounts and frequency making it difficult
to contribute to a meaningful evaluation of our operating
performance.
Tax adjustments - These adjustments represent the
impact of the expiration of applicable statutes of limitations for
prior year returns, the resolution of audits, the filing of amended
returns with respect to prior tax years and/or tax law or certain
other discrete changes affecting our deferred tax liability.
Reconciliation of Net Revenue (Dollars in
millions)
Net revenue by segment
| |
Three Months Ended |
|
% Increase / (Decrease) |
| |
June 30, 2024 |
|
July 2, 2023 |
|
|
|
Reported revenue |
Adjustment |
Adjusted Revenue |
|
Reported revenue |
Adjustment |
Adjusted Revenue |
|
Reported Revenue Growth |
Currency Impact |
Adjustment impact |
Adjusted Constant Currency Revenue Growth |
| Americas |
$426.8 |
$— |
$426.8 |
|
$424.7 |
$— |
$424.7 |
|
0.5% |
(0.1)% |
—% |
0.6% |
| EMEA |
147.1 |
(13.8) |
160.9 |
|
147.8 |
— |
147.8 |
|
(0.5)% |
(0.9)% |
(9.4)% |
9.8% |
| Asia |
87.0 |
— |
87.0 |
|
86.7 |
— |
86.7 |
|
0.4% |
(3.6)% |
—% |
4.0% |
| OEM |
88.8 |
— |
88.8 |
|
84.1 |
— |
84.1 |
|
5.6% |
(0.2)% |
—% |
5.8% |
| Consolidated |
$749.7 |
($13.8) |
$763.5 |
|
$743.3 |
$— |
$743.3 |
|
0.9% |
(0.6)% |
(1.9)% |
3.4% |
| |
Six Months Ended |
|
% Increase / (Decrease) |
| |
June 30, 2024 |
|
July 2, 2023 |
|
|
|
Reported revenue |
Adjustment |
Adjusted Revenue |
|
Reported revenue |
Adjustment |
Adjusted Revenue |
|
Reported Revenue Growth |
Currency Impact |
Adjustment impact |
Adjusted Constant Currency Revenue Growth |
| Americas |
$833.1 |
$— |
$833.1 |
|
$836.5 |
$— |
$836.5 |
|
(0.4)% |
0.1% |
—% |
(0.5)% |
| EMEA |
306.7 |
(13.8) |
320.5 |
|
291.2 |
— |
291.2 |
|
5.3% |
0.3% |
(4.7)% |
9.7% |
| Asia |
171.2 |
— |
171.2 |
|
165.4 |
— |
165.4 |
|
3.5% |
(3.9)% |
—% |
7.4% |
| OEM |
176.5 |
— |
176.5 |
|
161.1 |
— |
161.1 |
|
9.6% |
0.1% |
—% |
9.5% |
| Consolidated |
$1,487.5 |
($13.8) |
$1,501.3 |
|
$1,454.2 |
$— |
$1,454.2 |
|
2.3% |
(0.3)% |
(1.0)% |
3.6% |
Net revenue by global product category
| |
Three Months Ended |
|
% Increase / (Decrease) |
| |
June 30, 2024 |
|
July 2, 2023 |
|
|
|
Reported revenue |
Adjustment |
Adjusted Revenue |
|
Reported revenue |
Adjustment |
Adjusted Revenue |
|
Reported Revenue Growth |
Currency Impact |
Adjustment impact |
Adjusted Constant Currency Revenue Growth |
| Vascular Access |
$181.1 |
$— |
$181.1 |
|
$173.8 |
$— |
$173.8 |
|
4.2% |
(0.6)% |
—% |
4.8% |
| Interventional |
141.2 |
— |
141.2 |
|
124.8 |
— |
124.8 |
|
13.1% |
(0.7)% |
—% |
13.8% |
| Anesthesia |
102.5 |
— |
102.5 |
|
100.8 |
— |
100.8 |
|
1.6% |
(0.7)% |
—% |
2.3% |
| Surgical |
111.3 |
— |
111.3 |
|
106.0 |
— |
106.0 |
|
5.1% |
(1.3)% |
—% |
6.4% |
| Interventional Urology |
83.1 |
— |
83.1 |
|
77.8 |
— |
77.8 |
|
6.8% |
(0.3)% |
—% |
7.1% |
| OEM |
88.8 |
— |
88.8 |
|
84.1 |
— |
84.1 |
|
5.6% |
(0.2)% |
—% |
5.8% |
| Other (1) |
41.7 |
(13.8) |
55.5 |
|
76.0 |
— |
76.0 |
|
(45.1)% |
(0.4)% |
(18.3)% |
(26.4)% |
| Consolidated |
$749.7 |
($13.8) |
$763.5 |
|
$743.3 |
$— |
$743.3 |
|
0.9% |
(0.6)% |
(1.9)% |
3.4% |
| |
Six Months Ended |
|
% Increase / (Decrease) |
| |
June 30, 2024 |
|
July 2, 2023 |
|
|
|
Reported revenue |
Adjustment |
Adjusted Revenue |
|
Reported revenue |
Adjustment |
Adjusted Revenue |
|
Reported Revenue Growth |
Currency Impact |
Adjustment impact |
Adjusted Constant Currency Revenue Growth |
| Vascular Access |
$362.5 |
$— |
$362.5 |
|
$351.4 |
$— |
$351.4 |
|
3.1% |
(0.3)% |
—% |
3.4% |
| Interventional |
275.8 |
— |
275.8 |
|
241.7 |
— |
241.7 |
|
14.1% |
(0.5)% |
—% |
14.6% |
| Anesthesia |
198.8 |
— |
198.8 |
|
194.2 |
— |
194.2 |
|
2.4% |
(0.3)% |
—% |
2.7% |
| Surgical |
216.8 |
— |
216.8 |
|
205.0 |
— |
205.0 |
|
5.8% |
(0.9)% |
—% |
6.7% |
| Interventional Urology |
162.8 |
— |
162.8 |
|
153.2 |
— |
153.2 |
|
6.3% |
(0.3)% |
—% |
6.6% |
| OEM |
176.5 |
— |
176.5 |
|
161.1 |
— |
161.1 |
|
9.6% |
0.1% |
—% |
9.5% |
| Other (1) |
94.3 |
(13.8) |
108.1 |
|
147.6 |
— |
147.6 |
|
(36.2)% |
(0.1)% |
(9.3)% |
(26.8)% |
| Consolidated |
$1,487.5 |
($13.8) |
$1,501.3 |
|
$1,454.2 |
$— |
$1,454.2 |
|
2.3% |
(0.3)% |
(1.0)% |
3.6% |
(1) In 2024, amounts reflect the impact from increases in our
reserves related to the Italian payback measure pertaining to prior
years.
Reconciliation of Consolidated Statement of Income Items
(Dollars in millions, except per share data)
| Three
Months Ended June 30, 2024 |
|
|
Revenue |
Gross margin |
SG&A (1) |
R&D (1) |
Operating margin (2) |
Income before income taxes |
Income tax expense |
Effective income tax rate |
Diluted earnings per share from continuing
operations |
|
GAAP Basis |
$749.7 |
55.6% |
33.4% |
5.5% |
15.6% |
$97.5 |
$17.3 |
17.8% |
$1.69 |
|
Adjustments |
|
|
|
|
|
|
|
|
|
|
Restructuring, restructuring related and impairment items (A) |
— |
0.5 |
(0.1) |
— |
1.6 |
12.2 |
2.1 |
|
0.21 |
|
Acquisition, integration and divestiture related items (B) |
— |
— |
(0.7) |
— |
0.7 |
5.6 |
— |
|
0.12 |
|
Italian payback measure (C) |
13.8 |
0.7 |
(0.6) |
— |
1.4 |
13.8 |
— |
|
0.29 |
|
ERP implementation |
— |
— |
(0.4) |
— |
0.4 |
3.0 |
0.4 |
|
0.06 |
|
MDR |
— |
— |
— |
(0.5) |
0.4 |
3.1 |
— |
|
0.07 |
|
Intangible amortization expense |
— |
4.0 |
(2.6) |
— |
6.6 |
49.6 |
5.0 |
|
0.94 |
|
Tax adjustments |
— |
— |
— |
— |
— |
— |
(2.1) |
|
0.04 |
|
Adjustments total |
13.8 |
5.2 |
(4.4) |
(0.5) |
11.1 |
87.3 |
5.4 |
|
1.73 |
|
Adjusted basis |
$763.5 |
60.8% |
29.0% |
5.0% |
26.7% |
$184.8 |
$22.7 |
12.3% |
$3.42 |
| Three
Months Ended July 2, 2023 |
|
|
Gross margin |
SG&A (1) |
R&D (1) |
Operating margin (2) |
Income before income taxes |
Income tax expense |
Effective income taxrate |
Diluted earnings per share from continuing
operations |
|
GAAP Basis |
54.9% |
30.0% |
5.3% |
19.3% |
$127.0 |
$15.5 |
12.2% |
$2.35 |
|
Adjustments |
|
|
|
|
|
|
|
|
|
Restructuring, restructuring related and impairment items (A) |
1.0 |
— |
(0.2) |
1.5 |
10.8 |
1.7 |
|
0.19 |
|
Acquisition, integration and divestiture related items (B) |
— |
1.0 |
— |
(1.0) |
(7.5) |
— |
|
(0.16) |
|
ERP implementation |
— |
(0.2) |
— |
0.2 |
1.3 |
0.3 |
|
0.02 |
|
MDR |
— |
— |
(1.0) |
1.0 |
7.6 |
— |
|
0.16 |
|
Intangible amortization expense |
3.1 |
(2.5) |
— |
5.6 |
42.0 |
2.1 |
|
0.85 |
|
Tax adjustments |
— |
— |
— |
— |
— |
— |
|
— |
|
Adjustments total |
4.1 |
(1.7) |
(1.2) |
7.3 |
54.2 |
4.1 |
|
1.06 |
|
Adjusted basis |
59.0% |
28.3% |
4.1% |
26.6% |
$181.2 |
$19.6 |
10.8% |
$3.41 |
|
Notes: |
(1) Selling, general and administrative expenses and research and
development expenses are shown as a percentage of as reported and
adjusted revenues. (2) Operating margin defined as Income
from continuing operations before interest, loss on extinguishment
of debt and taxes as a percentage of as reported and adjusted
revenues. |
| |
|
| Totals may not sum due to rounding. |
| Six
Months Ended June 30, 2024 |
|
|
Revenue |
Gross margin |
SG&A (1) |
R&D (1) |
Operating margin (2) |
Income before income taxes |
Income tax expense |
Effective income tax rate |
Diluted earnings per share from continuing
operations |
|
GAAP Basis |
$1,487.5 |
56.0% |
42.5% |
5.3% |
7.5% |
$71.7 |
$(24.2) |
(33.8)% |
$2.02 |
|
Adjustments |
|
|
|
|
|
|
|
|
|
|
Restructuring, restructuring related and impairment items (A) |
— |
0.4 |
(0.1) |
— |
1.2 |
18.0 |
3.1 |
|
0.32 |
|
Acquisition, integration and divestiture related items (B) |
— |
0.1 |
(0.5) |
— |
0.6 |
9.0 |
0.4 |
|
0.18 |
|
Italian payback measure (C) |
13.8 |
0.3 |
(0.4) |
— |
0.9 |
13.8 |
— |
|
0.29 |
|
ERP implementation |
— |
— |
(0.2) |
— |
0.2 |
3.1 |
0.4 |
|
0.06 |
|
MDR |
— |
— |
— |
(0.5) |
0.4 |
6.3 |
— |
|
0.13 |
|
Pension termination costs |
— |
— |
(9.3) |
— |
9.3 |
138.6 |
58.2 |
|
1.70 |
|
Intangible amortization expense |
— |
4.1 |
(2.6) |
— |
6.6 |
99.8 |
10.1 |
|
1.89 |
|
Tax adjustments |
— |
— |
— |
— |
— |
— |
(2.1) |
|
0.04 |
|
Adjustments total |
13.8 |
4.9 |
(13.1) |
(0.5) |
19.2 |
288.6 |
70.1 |
|
4.61 |
|
Adjusted basis |
$1,501.3 |
60.9% |
29.4% |
4.8% |
26.7% |
$360.3 |
$45.9 |
12.7% |
$6.63 |
| Six Months
Ended July 2, 2023 |
|
|
Grossmargin |
SG&A (1) |
R&D (1) |
Operating margin (2) |
Income before income taxes |
Income tax expense |
Effective income tax rate |
Dilutedearnings per share from continuing
operations |
|
GAAP Basis |
55.0% |
31.4% |
5.6% |
17.8% |
$224.4 |
$35.7 |
15.9% |
$3.99 |
|
Adjustments |
|
|
|
|
|
|
|
|
|
Restructuring, restructuring related and impairment items (A) |
1.1 |
— |
(0.2) |
1.6 |
22.8 |
3.5 |
|
0.41 |
|
Acquisition, integration and divestiture related items (B) |
— |
0.3 |
— |
(0.3) |
(4.4) |
0.1 |
|
(0.10) |
|
ERP implementation |
— |
(0.2) |
— |
0.2 |
2.5 |
0.6 |
|
0.04 |
|
MDR |
— |
— |
(1.2) |
1.2 |
17.9 |
— |
|
0.38 |
|
Intangible amortization expense |
3.1 |
(2.6) |
— |
5.7 |
83.6 |
4.1 |
|
1.68 |
|
Tax adjustments |
— |
— |
— |
— |
— |
(4.8) |
|
0.10 |
|
Adjustments total |
4.2 |
(2.5) |
(1.4) |
8.4 |
122.4 |
3.5 |
|
2.51 |
|
Adjusted basis |
59.2% |
28.9% |
4.2% |
26.2% |
$346.8 |
$39.2 |
11.3% |
$6.50 |
|
Notes: |
(1) Selling, general and administrative expenses and research and
development expenses are shown as a percentage of as reported and
adjusted revenues.(2) Operating margin defined as Income from
continuing operations before interest, loss on extinguishment of
debt and taxes as a percentage of as reported and adjusted
revenues. |
|
|
|
|
Totals may not sum due to rounding. |
|
|
Tickmarks to Reconciliation Tables
|
(A) |
|
Restructuring, restructuring related and impairment items
– For the three months ended June 30, 2024, pre-tax
restructuring charges were $7.9 million and restructuring related
charges were $4.4 million. For the three months ended July 2, 2023,
pre-tax restructuring charges were $1.5 million and restructuring
related charges were $9.3 million. For the six months ended June
30, 2024, pre-tax restructuring charges were $8.4 million;
restructuring related charges were $7.5 million; and impairment
charges were $2.1 million. For the six months ended July 2, 2023,
pre-tax restructuring charges were $3.7 million and restructuring
related charges were $19.1 million. |
| |
|
|
| (B) |
|
Acquisition, integration
and divestiture related items – For the three and six
months ended June 30, 2024 and July 2, 2023, these
charges related to changes in the estimated fair value of our
contingent consideration liabilities and the acquisition of Palette
Life Sciences AB. |
| |
|
|
| (C) |
|
Italian payback measure
– Adjustment reflects the impact of an increase in
reserves for prior years related to the Italian payback measure and
its impact on the adjusted basis for each Non-GAAP financial
measure presented within the table. |
| |
|
|
ABOUT TELEFLEX INCORPORATEDAs a global provider
of medical technologies, Teleflex is driven by our purpose to
improve the health and quality of people’s lives. Through our
vision to become the most trusted partner in healthcare, we offer a
diverse portfolio with solutions in the therapy areas of
anesthesia, emergency medicine, interventional cardiology and
radiology, surgical, vascular access, and urology. We believe that
the potential of great people, purpose driven innovation, and
world-class products can shape the future direction of
healthcare.
Teleflex is the home of Arrow™, Barrigel™, Deknatel™, LMA™,
Pilling™, QuikClot™ Rüsch™, UroLift™ and Weck™ – trusted brands
united by a common sense of purpose.
At Teleflex, we are empowering the future of healthcare. For
more information, please visit teleflex.com.
CAUTION CONCERNING FORWARD-LOOKING
INFORMATIONThis press release contains forward-looking
statements, including, but not limited to, the implementation and
execution of our share repurchase program, including our planned
accelerated share repurchase; statements related to our long-term
growth profile and ability to create significant shareholder value;
our ability to opportunistically repurchase shares as part of a
broader capital allocation strategy while not compromising the
company’s capacity to invest in the growth of our business,
including the execution of value creating M&A opportunities;
forecasted 2024 GAAP and constant currency revenue growth and GAAP
and adjusted diluted earnings per share; and our estimates
regarding the projected impact of foreign currency exchange rate
fluctuations on our 2024 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
conflicts in the Ukraine and the Middle East; 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 |
|
Six Months Ended |
| |
June 30, 2024 |
|
July 2, 2023 |
|
June 30, 2024 |
|
July 2, 2023 |
| |
(Dollars and shares in thousands, except per
share) |
|
Net revenues |
$ |
749,691 |
|
|
$ |
743,259 |
|
|
$ |
1,487,540 |
|
|
$ |
1,454,191 |
|
| Cost of goods sold |
|
333,233 |
|
|
|
335,436 |
|
|
|
654,948 |
|
|
|
654,988 |
|
|
Gross profit |
|
416,458 |
|
|
|
407,823 |
|
|
|
832,592 |
|
|
|
799,203 |
|
| Selling, general and
administrative expenses |
|
250,631 |
|
|
|
223,306 |
|
|
|
493,461 |
|
|
|
456,022 |
|
| Research and development
expenses |
|
41,094 |
|
|
|
39,448 |
|
|
|
78,393 |
|
|
|
80,917 |
|
| Pension settlement charge |
|
— |
|
|
|
— |
|
|
|
138,139 |
|
|
|
— |
|
| Restructuring and impairment
charges |
|
7,855 |
|
|
|
1,508 |
|
|
|
10,514 |
|
|
|
3,729 |
|
|
Income from continuing operations before interest and taxes |
|
116,878 |
|
|
|
143,561 |
|
|
|
112,085 |
|
|
|
258,535 |
|
| Interest expense |
|
21,168 |
|
|
|
17,762 |
|
|
|
43,851 |
|
|
|
36,099 |
|
| Interest income |
|
(1,787 |
) |
|
|
(1,156 |
) |
|
|
(3,453 |
) |
|
|
(1,999 |
) |
|
Income from continuing operations before taxes |
|
97,497 |
|
|
|
126,955 |
|
|
|
71,687 |
|
|
|
224,435 |
|
| Taxes (benefit) on income from
continuing operations |
|
17,332 |
|
|
|
15,532 |
|
|
|
(24,219 |
) |
|
|
35,716 |
|
|
Income from continuing operations |
|
80,165 |
|
|
|
111,423 |
|
|
|
95,906 |
|
|
|
188,719 |
|
| Operating loss from
discontinued operations |
|
(164 |
) |
|
|
(114 |
) |
|
|
(751 |
) |
|
|
(825 |
) |
| Tax benefit on operating loss
from discontinued operations |
|
(37 |
) |
|
|
(26 |
) |
|
|
(172 |
) |
|
|
(189 |
) |
|
Loss from discontinued operations |
|
(127 |
) |
|
|
(88 |
) |
|
|
(579 |
) |
|
|
(636 |
) |
|
Net income |
$ |
80,038 |
|
|
$ |
111,335 |
|
|
$ |
95,327 |
|
|
$ |
188,083 |
|
| Earnings per share: |
|
|
|
|
|
|
|
|
Basic: |
|
|
|
|
|
|
|
|
Income from continuing operations |
$ |
1.70 |
|
|
$ |
2.37 |
|
|
$ |
2.03 |
|
|
$ |
4.02 |
|
|
Loss from discontinued operations |
|
— |
|
|
|
— |
|
|
|
(0.01 |
) |
|
|
(0.02 |
) |
| Net income |
$ |
1.70 |
|
|
$ |
2.37 |
|
|
$ |
2.02 |
|
|
$ |
4.00 |
|
|
Diluted: |
|
|
|
|
|
|
|
|
Income from continuing operations |
$ |
1.69 |
|
|
$ |
2.35 |
|
|
$ |
2.02 |
|
|
$ |
3.99 |
|
|
Loss from discontinued operations |
|
— |
|
|
|
— |
|
|
|
(0.01 |
) |
|
|
(0.01 |
) |
| Net income |
$ |
1.69 |
|
|
$ |
2.35 |
|
|
$ |
2.01 |
|
|
$ |
3.98 |
|
| Weighted average common shares
outstanding |
|
|
|
|
|
|
|
|
Basic |
|
47,151 |
|
|
|
46,981 |
|
|
|
47,130 |
|
|
|
46,965 |
|
|
Diluted |
|
47,361 |
|
|
|
47,329 |
|
|
|
47,378 |
|
|
|
47,307 |
|
| |
|
TELEFLEX INCORPORATEDCONSOLIDATED BALANCE
SHEETS(Unaudited) |
| |
| |
June 30, 2024 |
|
December 31, 2023 |
| |
(Dollars in thousands) |
| ASSETS |
|
|
|
| Current assets |
|
|
|
|
Cash and cash equivalents |
$ |
238,567 |
|
$ |
222,848 |
|
Accounts receivable, net |
|
448,897 |
|
|
443,467 |
|
Inventories |
|
636,908 |
|
|
626,216 |
|
Prepaid expenses and other current assets |
|
94,826 |
|
|
107,471 |
|
Prepaid taxes |
|
18,890 |
|
|
7,404 |
|
Total current assets |
|
1,438,088 |
|
|
1,407,406 |
| Property, plant and equipment,
net |
|
491,996 |
|
|
479,913 |
| Operating lease assets |
|
112,010 |
|
|
123,521 |
| Goodwill |
|
2,892,629 |
|
|
2,914,055 |
| Intangible assets, net |
|
2,379,916 |
|
|
2,501,960 |
| Deferred tax assets |
|
6,424 |
|
|
6,748 |
| Other assets |
|
120,577 |
|
|
98,943 |
|
Total assets |
$ |
7,441,640 |
|
$ |
7,532,546 |
| LIABILITIES AND
EQUITY |
|
|
|
| Current liabilities |
|
|
|
|
Current borrowings |
$ |
93,750 |
|
$ |
87,500 |
|
Accounts payable |
|
113,450 |
|
|
132,247 |
|
Accrued expenses |
|
153,403 |
|
|
146,880 |
|
Payroll and benefit-related liabilities |
|
113,112 |
|
|
146,535 |
|
Accrued interest |
|
5,771 |
|
|
5,583 |
|
Income taxes payable |
|
19,731 |
|
|
41,453 |
|
Other current liabilities |
|
57,534 |
|
|
46,547 |
|
Total current liabilities |
|
556,751 |
|
|
606,745 |
| Long-term borrowings |
|
1,624,222 |
|
|
1,727,572 |
| Deferred tax liabilities |
|
453,028 |
|
|
456,080 |
| Pension and postretirement
benefit liabilities |
|
23,026 |
|
|
23,989 |
| Noncurrent liability for
uncertain tax positions |
|
3,271 |
|
|
3,370 |
| Noncurrent operating lease
liabilities |
|
102,572 |
|
|
111,300 |
| Other liabilities |
|
120,051 |
|
|
162,502 |
|
Total liabilities |
|
2,882,921 |
|
|
3,091,558 |
| Commitments and
contingencies |
|
|
|
|
Total shareholders' equity |
|
4,558,719 |
|
|
4,440,988 |
|
Total liabilities and shareholders' equity |
$ |
7,441,640 |
|
$ |
7,532,546 |
| |
|
TELEFLEX INCORPORATEDCONSOLIDATED
STATEMENTS OF CASH FLOWS(Unaudited) |
| |
| |
Six Months Ended |
| |
June 30, 2024 |
|
July 2, 2023 |
| |
(Dollars in thousands) |
| Cash flows from operating
activities of continuing operations: |
|
|
|
|
Net income |
$ |
95,327 |
|
|
$ |
188,083 |
|
|
Adjustments to reconcile net income to net cash provided by
operating activities: |
|
|
|
|
Loss from discontinued operations |
|
579 |
|
|
|
636 |
|
|
Depreciation expense |
|
34,487 |
|
|
|
36,723 |
|
|
Intangible asset amortization expense |
|
99,686 |
|
|
|
83,600 |
|
|
Deferred financing costs and debt discount amortization
expense |
|
1,716 |
|
|
|
1,700 |
|
|
Pension settlement charge |
|
138,139 |
|
|
|
— |
|
|
Fair value step up of acquired inventory sold |
|
1,722 |
|
|
|
— |
|
|
Changes in contingent consideration |
|
5,852 |
|
|
|
(6,776 |
) |
|
Assets impairment charge |
|
2,110 |
|
|
|
— |
|
|
Stock-based compensation |
|
15,739 |
|
|
|
14,020 |
|
|
Deferred income taxes, net |
|
(62,953 |
) |
|
|
460 |
|
|
Interest benefit on swaps designated as net investment hedges |
|
(8,000 |
) |
|
|
(10,288 |
) |
|
Other |
|
2,168 |
|
|
|
2,824 |
|
|
Changes in assets and liabilities, net of effects of acquisitions
and disposals: |
|
|
|
|
Accounts receivable |
|
(11,238 |
) |
|
|
(16,587 |
) |
|
Inventories |
|
(23,775 |
) |
|
|
(45,630 |
) |
|
Prepaid expenses and other assets |
|
11,443 |
|
|
|
12,120 |
|
|
Accounts payable, accrued expenses and other liabilities |
|
(34,157 |
) |
|
|
(53,766 |
) |
|
Income taxes receivable and payable, net |
|
(64,313 |
) |
|
|
(36,501 |
) |
|
Net cash provided by operating activities from
continuing operations |
|
204,532 |
|
|
|
170,618 |
|
| Cash flows from investing
activities of continuing operations: |
|
|
|
|
Expenditures for property, plant and equipment |
|
(73,232 |
) |
|
|
(39,374 |
) |
|
Payments for businesses and intangibles acquired, net of cash
acquired |
|
(70 |
) |
|
|
(129 |
) |
|
Net proceeds on swaps designated as net investment hedges |
|
18,262 |
|
|
|
10,275 |
|
|
Proceeds from sales of investments |
|
7,300 |
|
|
|
— |
|
|
Purchase of investments |
|
(7,300 |
) |
|
|
— |
|
|
Net cash used in investing activities from continuing
operations |
|
(55,040 |
) |
|
|
(29,228 |
) |
| Cash flows from financing
activities of continuing operations: |
|
|
|
|
Reduction in borrowings |
|
(98,250 |
) |
|
|
(154,500 |
) |
|
Net proceeds from share based compensation plans and related tax
impacts |
|
2,398 |
|
|
|
572 |
|
|
Payments for contingent consideration |
|
(122 |
) |
|
|
(121 |
) |
|
Dividends paid |
|
(32,018 |
) |
|
|
(31,941 |
) |
|
Net cash used in financing activities from continuing
operations |
|
(127,992 |
) |
|
|
(185,990 |
) |
| Cash flows from discontinued
operations: |
|
|
|
|
Net cash used in operating activities |
|
(2,239 |
) |
|
|
(454 |
) |
|
Net cash used in discontinued operations |
|
(2,239 |
) |
|
|
(454 |
) |
| Effect of exchange rate
changes on cash and cash equivalents |
|
(3,542 |
) |
|
|
3,836 |
|
| Net increase (decrease) in
cash and cash equivalents |
|
15,719 |
|
|
|
(41,218 |
) |
| Cash and cash equivalents at
the beginning of the period |
|
222,848 |
|
|
|
292,034 |
|
| Cash and cash equivalents at
the end of the period |
$ |
238,567 |
|
|
$ |
250,816 |
|
| |
|
|
|
|
|
|
|
Contacts:Teleflex Incorporated:Lawrence
KeuschVice President, Investor Relations and Strategy
Development
investors.teleflex.com 610-948-2836
Teleflex (NYSE:TFX)
Historical Stock Chart
From Oct 2024 to Nov 2024
Teleflex (NYSE:TFX)
Historical Stock Chart
From Nov 2023 to Nov 2024
