Teleflex Reports Second Quarter Financial Results and Full Year 2024 Outlook
Teleflex (NYSE: TFX) released its Q2 2024 financial results with GAAP revenue at $749.7 million, a 0.9% YoY increase. Adjusted revenue, excluding Italian payback measures, rose 2.7% to $763.5 million, up 3.4% on a constant currency basis.
GAAP diluted EPS from continuing operations decreased to $1.69, down from $2.35 in the prior year. Adjusted diluted EPS remained steady at $3.42.
Teleflex has raised its 2024 GAAP revenue growth guidance to 3.40%-4.40% and adjusted constant currency revenue growth to 4.25%-5.25%. However, it lowered its GAAP EPS guidance to $6.43-$6.83 while increasing adjusted EPS guidance to $13.80-$14.20.
The company announced a $500 million share repurchase, including a $200 million accelerated buyback. Segment highlights include a 5.6% rise in OEM revenue and a 13.1% increase in Interventional revenue. Cash reserves stand at $238.6 million, up from $222.8 million at the end of 2023.
Teleflex (NYSE: TFX) ha pubblicato i risultati finanziari del secondo trimestre 2024, con ricavi GAAP pari a 749,7 milioni di dollari, un aumento dello 0,9% rispetto all'anno precedente. I ricavi rettificati, escludendo le misure di recupero italiane, sono aumentati del 2,7% a 763,5 milioni di dollari, con un incremento del 3,4% a valuta costante.
L'EPS diluito GAAP dalle operazioni continuative è diminuito a 1,69 dollari, rispetto ai 2,35 dollari dell'anno scorso. L'EPS diluito rettificato è rimasto stabile a 3,42 dollari.
Teleflex ha alzato le previsioni di crescita dei ricavi GAAP per il 2024 tra il 3,40% e il 4,40% e la crescita dei ricavi rettificati a valuta costante tra il 4,25% e il 5,25%. Tuttavia, ha abbassato le previsioni per l'EPS GAAP a 6,43-6,83 dollari, mentre ha aumentato le previsioni per l'EPS rettificato a 13,80-14,20 dollari.
L'azienda ha annunciato un riacquisto di azioni da 500 milioni di dollari, compreso un buyback accelerato di 200 milioni di dollari. Tra i punti salienti dei segmenti, si segnala un aumento del 5,6% dei ricavi OEM e un incremento del 13,1% dei ricavi interventistici. Le riserve di liquidità ammontano a 238,6 milioni di dollari, in aumento rispetto ai 222,8 milioni di dollari di fine 2023.
Teleflex (NYSE: TFX) publicó sus resultados financieros del segundo trimestre de 2024, con ingresos GAAP de 749.7 millones de dólares, un incremento del 0.9% interanual. Los ingresos ajustados, excluyendo las medidas de recuperación italianas, aumentaron un 2.7% a 763.5 millones de dólares, con un aumento del 3.4% en moneda constante.
El EPS diluido GAAP de las operaciones continuas disminuyó a 1.69 dólares, en comparación con 2.35 dólares del año anterior. El EPS diluido ajustado se mantuvo estable en 3.42 dólares.
Teleflex ha elevado su pronóstico de crecimiento de ingresos GAAP para 2024 entre 3.40% y 4.40% y el crecimiento de ingresos ajustados en moneda constante entre 4.25% y 5.25%. Sin embargo, redujo su orientación de EPS GAAP a 6.43-6.83 dólares mientras que aumentó su pronóstico de EPS ajustado a 13.80-14.20 dólares.
La empresa anunció un programa de recompra de acciones de 500 millones de dólares, que incluye un reenfoque acelerado de 200 millones de dólares. Entre los aspectos destacados del segmento, se incluye un aumento del 5.6% en los ingresos de OEM y un incremento del 13.1% en los ingresos intervencionistas. Las reservas de efectivo ascienden a 238.6 millones de dólares, en comparación con los 222.8 millones de dólares a finales de 2023.
Teleflex (NYSE: TFX)는 2024년 2분기 재무 결과를 발표했으며 GAAP 매출은 7억 4천 9백 70만 달러로 전년 대비 0.9% 증가했습니다. 이탈리아의 지급 조치를 제외한 조정 매출은 2.7% 상승하여 7억 6천 3백 50만 달러를 기록했으며, 일정한 통화 기준으로는 3.4% 증가했습니다.
지속적인 운영에서의 GAAP 희석 EPS는 2.35달러에서 1.69달러로 감소했습니다. 조정된 희석 EPS는 3.42달러로 안정세를 유지했습니다.
Teleflex는 2024년 GAAP 매출 성장 가이던스를 3.40%-4.40%로, 조정된 일정 통화 매출 성장 가이던스를 4.25%-5.25%로 상향 조정했습니다. 그러나 GAAP EPS 가이던스는 6.43-6.83달러로 하향 조정했으며, 조정 EPS 가이던스는 13.80-14.20달러로 상향했습니다.
이 회사는 5억 달러 규모의 자사주 매입을 발표했으며, 여기에는 2억 달러의 가속 매입도 포함됩니다. 세그먼트 하이라이트에는 OEM 매출이 5.6% 증가하고 중재 매출이 13.1% 증가한 것이 포함됩니다. 현금 준비금은 2억 3천 8백 60만 달러로, 2023년 말 2억 2천 2백 80만 달러에서 증가했습니다.
Teleflex (NYSE: TFX) a publié ses résultats financiers pour le deuxième trimestre 2024, avec un chiffre d'affaires GAAP de 749,7 millions de dollars, soit une augmentation de 0,9 % par rapport à l'année précédente. Le chiffre d'affaires ajusté, en excluant les mesures de remboursement italiennes, a augmenté de 2,7 % pour atteindre 763,5 millions de dollars, soit une hausse de 3,4 % à taux de change constant.
Le résultat net dilué GAAP des opérations continues a diminué à 1,69 dollar, contre 2,35 dollars l'an dernier. Le résultat net dilué ajusté est resté stable à 3,42 dollars.
Teleflex a relevé ses prévisions de croissance des revenus GAAP pour 2024 à 3,40 % - 4,40 % et la croissance des revenus ajustés à taux de change constant à 4,25 % - 5,25 %. Cependant, elle a abaissé ses prévisions d'EPS GAAP à 6,43 - 6,83 dollars tout en augmentant ses prévisions d'EPS ajusté à 13,80 - 14,20 dollars.
L'entreprise a annoncé un programme de rachat d'actions de 500 millions de dollars, y compris un rachat accéléré de 200 millions de dollars. Les points forts du segment incluent une augmentation de 5,6 % des revenus OEM et une augmentation de 13,1 % des revenus Interventionnels. Les réserves de trésorerie s'élèvent à 238,6 millions de dollars, en hausse par rapport à 222,8 millions de dollars à la fin de 2023.
Teleflex (NYSE: TFX) veröffentlichte seine finanziellen Ergebnisse für das zweite Quartal 2024 mit einem GAAP-Umsatz von 749,7 Millionen US-Dollar, was einem Anstieg von 0,9 % im Jahresvergleich entspricht. Der angepasste Umsatz, ohne die italienischen Rückzahlungsmaßnahmen, stieg um 2,7 % auf 763,5 Millionen US-Dollar, was einem Anstieg von 3,4 % bei konstanten Währungen entspricht.
Der GAAP-diluted EPS aus fortgeführten Betrieben sank auf 1,69 US-Dollar, nach 2,35 US-Dollar im Vorjahr. Der angepasste dilutierte EPS blieb stabil bei 3,42 US-Dollar.
Teleflex hat seine Umsatzwachstumsprognose für 2024 auf 3,40 % - 4,40 % angehoben und das angepasste Umsatzwachstum bei konstanten Wechselkursen auf 4,25 % - 5,25 % erhöht. Allerdings wurde die GAAP EPS-Prognose auf 6,43 - 6,83 US-Dollar gesenkt, während die angepasste EPS-Prognose auf 13,80 - 14,20 US-Dollar erhöht wurde.
Das Unternehmen kündigte ein Aktienrückkaufprogramm von 500 Millionen US-Dollar an, einschließlich eines beschleunigten Rückkaufs von 200 Millionen US-Dollar. Zu den Highlights des Segments gehören ein Anstieg des OEM-Umsatzes um 5,6 % und ein Anstieg des interventionellen Umsatzes um 13,1 %. Die Barmittelbelastung beträgt 238,6 Millionen US-Dollar, ein Anstieg von 222,8 Millionen US-Dollar zum Ende des Jahres 2023.
- Adjusted revenue up 2.7% YoY to $763.5 million
- Raised 2024 GAAP revenue growth guidance to 3.40%-4.40%
- Increased 2024 adjusted EPS guidance to $13.80-$14.20
- OEM revenue up 5.6% YoY
- Interventional revenue rose 13.1% YoY
- Cash reserves increased to $238.6 million
- GAAP diluted EPS from continuing operations decreased to $1.69 from $2.35 YoY
- Lowered 2024 GAAP EPS guidance to $6.43-$6.83
Insights
Teleflex's Q2 2024 results show modest growth and improved guidance, but with some mixed signals:
- Revenue growth: GAAP revenue up
0.9% to$749.7 million , adjusted revenue up2.7% to$763.5 million - Earnings: GAAP EPS down to
$1.69 from$2.35 , adjusted EPS up slightly to$3.42 from$3.41 - Guidance raised: Full year adjusted revenue growth guidance increased to
4.25-5.25% , adjusted EPS guidance raised to$13.80-$14.20 - Share repurchase:
$500 million authorization announced, including$200 million accelerated repurchase
The revenue growth and raised guidance are positive signs, but the decline in GAAP EPS is concerning. The large share repurchase signals confidence from management, but could also indicate a lack of attractive growth investments. Overall, this appears to be a steady but unexciting quarter for Teleflex.
Looking at Teleflex's product categories and geographic segments provides additional insights:
- Strong performers: Interventional (+
13.1% ), OEM (+5.6% ) and Surgical (+5.1% ) showed solid growth - Weaker areas: Anesthesia (+
1.6% ) and EMEA (-0.5% ) lagged behind - Geographic mix: Americas remains the largest segment at
56.9% of revenue, but with minimal growth (+0.5% ) - Emerging markets: Asia showed modest
0.4% growth, but4.0% on a constant currency basis
The diverse product portfolio is helping to balance out weaker areas. However, the heavy reliance on slow-growing Americas market and underperformance in EMEA could be concerns. The company may need to focus on accelerating growth in emerging markets and addressing challenges in slower-growing segments to maintain momentum.
Two legal and regulatory aspects of Teleflex's report warrant attention:
- Italian payback measure: A
$13.8 million reserve increase related to prior years due to an Italian court ruling. This highlights regulatory risks in international markets. - European MDR: Ongoing expenses related to the EU Medical Device Regulation, which requires re-registration of previously approved devices. This represents a significant regulatory burden for medical device companies operating in Europe.
These issues underscore the complex regulatory environment Teleflex operates in. The Italian payback situation demonstrates how retroactive policy changes can impact financials unexpectedly. Meanwhile, the MDR compliance costs are likely to continue for several years as deadlines approach in 2027 and 2028. Companies must carefully manage these regulatory risks and associated costs to maintain profitability in the medical device industry.
Announces
WAYNE, Pa., Aug. 01, 2024 (GLOBE NEWSWIRE) -- 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 , up0.9% 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, up2.7% compared to the prior year period, up3.4% 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% to4.40% - Raising adjusted constant currency revenue growth guidance range to
4.25% to5.25% , 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
(1) Refer to Notes on Non-GAAP Financial Measures for detail on Italian payback measure.
NET REVENUE BY SEGMENT
The 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 | |||||||
| EMEA | 147.1 | 147.8 | (0.5)% | 160.9 | 147.8 | ||
| Asia | 87.0 | 86.7 | 87.0 | 86.7 | |||
| OEM | 88.8 | 84.1 | 88.8 | 84.1 | |||
| Consolidated | |||||||
| 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 | (0.4)% | (0.5)% | |||||
| EMEA | 306.7 | 291.2 | 320.5 | 291.2 | |||
| Asia | 171.2 | 165.4 | 171.2 | 165.4 | |||
| OEM | 176.5 | 161.1 | 176.5 | 161.1 | |||
| Consolidated | |||||||
NET REVENUE BY GLOBAL PRODUCT CATEGORY
The 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 | |||||||
| Interventional | 141.2 | 124.8 | 141.2 | 124.8 | |||
| Anesthesia | 102.5 | 100.8 | 102.5 | 100.8 | |||
| Surgical | 111.3 | 106.0 | 111.3 | 106.0 | |||
| Interventional Urology | 83.1 | 77.8 | 83.1 | 77.8 | |||
| OEM | 88.8 | 84.1 | 88.8 | 84.1 | |||
| Other (1) | 41.7 | 76.0 | (45.1)% | 55.5 | 76.0 | (26.4)% | |
| Consolidated | |||||||
| 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 | |||||||
| Interventional | 275.8 | 241.7 | 275.8 | 241.7 | |||
| Anesthesia | 198.8 | 194.2 | 198.8 | 194.2 | |||
| Surgical | 216.8 | 205.0 | 216.8 | 205.0 | |||
| Interventional Urology | 162.8 | 153.2 | 162.8 | 153.2 | |||
| OEM | 176.5 | 161.1 | 176.5 | 161.1 | |||
| Other (1) | 94.3 | 147.6 | (36.2)% | 108.1 | 147.6 | (26.8)% | |
| Consolidated | |||||||
(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
The Company lowered its full year 2024 GAAP diluted earnings per share from continuing operations outlook from a range of
Forecasted 2024 Adjusted Constant Currency Revenue Growth Reconciliation
| Low | High | ||
| Forecasted 2024 GAAP revenue growth | |||
| 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 | |||
Forecasted 2024 Adjusted Diluted Earnings Per Share From Continuing Operations Reconciliation
| Low | High | ||||
| Forecasted GAAP diluted earnings per share from continuing operations | |||||
| Restructuring, restructuring related and impairment items, net of tax | |||||
| Acquisition, integration and divestiture related items, net of tax | |||||
| Pension termination and related charges, net of tax | |||||
| ERP Implementation, net of tax | |||||
| MDR, net of tax | |||||
| Italian payback measure, net of tax | |||||
| Intangible amortization expense, net of tax | |||||
| Tax adjustments | |||||
| Forecasted adjusted diluted earnings per share from continuing operations, net of tax | |||||
SHARE REPURCHASE PROGRAM
The Board of Directors has authorized a share repurchase program for up to
CONFERENCE CALL WEBCAST AND ADDITIONAL INFORMATION
A 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 NOTES
References in this release to the impact of foreign currency exchange rate fluctuations on adjusted diluted earnings per share include both the impact of translating foreign currencies into U.S. dollars and the impact of foreign currency exchange rate fluctuations on foreign currency denominated transactions.
In the discussion of segment results, "new products" refers to products for which we initiated commercial sales within the past 36 months and "existing products" refers to products we have sold commercially for more than 36 months.
Certain financial information is presented on a rounded basis, which may cause minor differences. Segment results and commentary exclude the impact of discontinued operations.
NOTES ON NON-GAAP FINANCIAL MEASURES
We report our financial results in accordance with accounting principles generally accepted in the United States, commonly referred to as “GAAP”. In this press release, we provide supplemental information, consisting of the following non-GAAP financial measures: 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
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 | $— | $— | (0.1)% | —% | ||||||||||||||
| EMEA | 147.1 | (13.8) | 160.9 | 147.8 | — | 147.8 | (0.5)% | (0.9)% | (9.4)% | |||||||||
| Asia | 87.0 | — | 87.0 | 86.7 | — | 86.7 | (3.6)% | —% | ||||||||||
| OEM | 88.8 | — | 88.8 | 84.1 | — | 84.1 | (0.2)% | —% | ||||||||||
| Consolidated | ( | $— | (0.6)% | (1.9)% | ||||||||||||||
| 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 | $— | $— | (0.4)% | —% | (0.5)% | ||||||||||||||
| EMEA | 306.7 | (13.8) | 320.5 | 291.2 | — | 291.2 | (4.7)% | ||||||||||||
| Asia | 171.2 | — | 171.2 | 165.4 | — | 165.4 | (3.9)% | —% | |||||||||||
| OEM | 176.5 | — | 176.5 | 161.1 | — | 161.1 | —% | ||||||||||||
| Consolidated | ( | $— | (0.3)% | (1.0)% | |||||||||||||||
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 | $— | $— | (0.6)% | —% | |||||||||||||||
| Interventional | 141.2 | — | 141.2 | 124.8 | — | 124.8 | (0.7)% | —% | |||||||||||
| Anesthesia | 102.5 | — | 102.5 | 100.8 | — | 100.8 | (0.7)% | —% | |||||||||||
| Surgical | 111.3 | — | 111.3 | 106.0 | — | 106.0 | (1.3)% | —% | |||||||||||
| Interventional Urology | 83.1 | — | 83.1 | 77.8 | — | 77.8 | (0.3)% | —% | |||||||||||
| OEM | 88.8 | — | 88.8 | 84.1 | — | 84.1 | (0.2)% | —% | |||||||||||
| Other (1) | 41.7 | (13.8) | 55.5 | 76.0 | — | 76.0 | (45.1)% | (0.4)% | (18.3)% | (26.4)% | |||||||||
| Consolidated | ( | $— | (0.6)% | (1.9)% | |||||||||||||||
| 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 | $— | $— | (0.3)% | —% | |||||||||||||||
| Interventional | 275.8 | — | 275.8 | 241.7 | — | 241.7 | (0.5)% | —% | |||||||||||
| Anesthesia | 198.8 | — | 198.8 | 194.2 | — | 194.2 | (0.3)% | —% | |||||||||||
| Surgical | 216.8 | — | 216.8 | 205.0 | — | 205.0 | (0.9)% | —% | |||||||||||
| Interventional Urology | 162.8 | — | 162.8 | 153.2 | — | 153.2 | (0.3)% | —% | |||||||||||
| OEM | 176.5 | — | 176.5 | 161.1 | — | 161.1 | —% | ||||||||||||
| Other (1) | 94.3 | (13.8) | 108.1 | 147.6 | — | 147.6 | (36.2)% | (0.1)% | (9.3)% | (26.8)% | |||||||||
| Consolidated | ( | $— | (0.3)% | (1.0)% | |||||||||||||||
(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 | |||||||||
| 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 tax rate | Diluted earnings per share from continuing operations | |
| GAAP Basis | ||||||||
| 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 | (33.8)% | ||||||||
| 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 | ||||||||
| 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 | ||||||||
| 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 | |
| (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 INCORPORATED
As 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 INFORMATION
This 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 INCORPORATED CONSOLIDATED 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 INCORPORATED CONSOLIDATED 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 INCORPORATED CONSOLIDATED 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 Keusch
Vice President, Investor Relations and Strategy Development
investors.teleflex.com
610-948-2836
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