Slide 1: Teleflex Incorporated Second Quarter 2016 Earnings Conference Call
1 Teleflex Incorporated Second Quarter 2016 Earnings Conference Call
Slide 2: Conference Call Logistics
2 Conference Call Logistics The release, accompanying slides, and replay webcast are available online at www.teleflex.com (click on “Investors”) Telephone replay available by dialing 855-859-2056 or for international calls, 404- 537-3406, pass code number 47983139
Slide 3: Introductions
3 Introductions Benson Smith Chairman and CEO Liam Kelly President and COO Thomas Powell Executive Vice President and CFO Jake Elguicze Treasurer and Vice President of Investor Relations
Slide 4: Forward Looking Statements
4 Forward Looking Statements This presentation and our discussion contain forward-looking information and statements including, but not limited to, forecasted 2016 GAAP and constant currency revenue growth; forecasted 2016 GAAP and adjusted gross and operating margins; forecasted 2016 GAAP and adjus
Slide 5: Executive Summary
5 Executive Summary Second quarter 2016 revenue of $473.6 million • Up 4.8% vs. prior year period on an as-reported basis • Up 5.0% vs. prior year period on a constant currency basis Second quarter 2016 Earnings Per Share • GAAP EPS of $1.25, up 34.4% vs. prior year period • Adjusted EPS of $1.89, u
Slide 6: Second Quarter Highlights
6 Second Quarter Highlights Second quarter 2016 constant currency revenue growth of 5.0% • Sales volume of existing products contributes ~3.5%, in part due to impact of one additional selling day in the quarter • Sales volume of new products contributes ~1.3% • Improved product pricing contributes ~
Slide 7: Segment Revenue Review
7 Segment Revenue Review Q2’16 Q2’15 Constant Currency Revenue Commentary Vascular N.A.: $88.2 million, up 8.8% Anesthesia N.A.: $49.2 million, up 8.2% Surgical N.A.: $43.1 million, up 6.8% EMEA: $131.7 million, up 1.3% Asia: $63.2 million, up 3.6% OEM: $40.3 million, up 5.9% All Other: $57.9 millio
Slide 8: Group Purchasing Organization and IDN Review
8 Group Purchasing Organization and IDN Review Track record of expansion of contractual agreements continues in Q2’16 Group Purchasing Organization Update • 1 new agreement • 3 renewed agreements IDN Update • 18 new agreements • 6 renewed agreements • 1 existing agreement not renewed
Slide 9: Restructuring Update
9 Restructuring Update 2016 Manufacturing Footprint Realignment Plan • Actions are expected to be substantially completed by the end of 2018 • Continue to expect to achieve annualized pre-tax savings of between $12 million to $16 million once the Plan is fully implemented 2015 Restructuring Programs
Slide 10: Second Quarter Financial Review
10 Second Quarter Financial Review Revenue of $473.6 million • Up 4.8% vs. prior year period on an as-reported basis • Up 5.0% vs. prior year period on a constant currency basis Gross Margin • GAAP gross margin of 54.1%, up 250bps vs. prior year period • Adjusted gross margin of 55.0%, up 270bps vs.
Slide 11: 2016 Financial Outlook Assumptions
11 2016 Financial Outlook Assumptions Reaffirming previously provided full year 2016 Revenue Guidance • As-reported revenue growth range of 3.0% - 4.0% • Constant currency revenue growth range of 5.0% - 6.0% 2016 Gross Margin Guidance • Raised GAAP gross margin range from 53.15% - 54.05% to 53.25% -
Slide 12: Any Questions?
12 Any Questions?
Slide 13: Thank You
13 Thank You
Slide 14: Appendices
14 Appendices
Slide 15: Non-GAAP Financial Measures
15 Non-GAAP Financial Measures The following appendices include, among other things, tables reconciling the following non-GAAP financial measures to the most comparable GAAP financial measure: • Constant currency revenue growth. This measure excludes the impact of translating the results of internat
Slide 16: Appendix A: Constant Currency Revenue Growth
16 APPENDIX A – RECONCILIATION OF CONSTANT CURRENCY REVENUE GROWTH DOLLARS IN MILLIONS June 26, 2016 June 28, 2015 Constant Currency Currency Total Vascular North America 88.2$ 81.2$ 8.8% (0.2%) 8.6% Anesthesia North America 49.2 45.6 8.2% (0.3%) 7.9% Surgical North America 43.1 40.5 6.8% (0.3%) 6.5
Slide 17: Appendix B: Revenue Growth
17 APPENDIX B – RECONCILIATION OF REVENUE GROWTH DOLLARS IN MILLIONS % Basis Points Three Months Ended June 28, 2015 Revenue As-Reported $452.0 Foreign Currency (1.1) -0.2% (25) Sales Volume Existing Products 15.6 3.5% 345 New Product Sales 6.0 1.3% 132 Pricing 0.7 0.2% 16 Acquisitions 0.3 0.1% 7 Th
Slide 18: Appendix C: Adjusted Gross Profit and Margin
18 APPENDIX C – RECONCILIATION OF ADJUSTED GROSS PROFIT AND MARGIN DOLLARS IN THOUSANDS June 26, 2016 June 28, 2015 Teleflex gross profit as-reported 256,399$ 233,237$ Teleflex gross margin as-reported 54.1% 51.6% Losses and other charges, net (A) 3,975 3,103 Adjusted Teleflex gross profit 260,374$
Slide 19: Appendix D: Adjusted Operating Profit and Margin
19 APPENDIX D – RECONCILIATION OF ADJUSTED OPERATING PROFIT AND MARGIN DOLLARS IN THOUSANDS (A) In 2016 losses and other charges, net related primarily to facility consolidations. In 2015, losses and other charges, net related primarily to reversals of charges related to contingent consideration lia
Slide 20: Appendix E: Adjusted EPS, Quarter Ended June 26, 2016
20 APPENDIX E – RECONCILIATION OF ADJUSTED EPS FROM CONTINUING OPERATIONS QUARTER ENDED – JUNE 26, 2016 DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA Cost of goods sold Selling, general and administrative expenses Research and development expenses Restructuring and other impairment charges (Gain) loss
Slide 21: Appendix F: Adjusted EPS, Quarter Ended June 28, 2015
21 APPENDIX F – RECONCILIATION OF ADJUSTED EPS FROM CONTINUING OPERATIONS QUARTER ENDED – JUNE 28, 2015 DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA Cost of goods sold Selling, general and administrative expenses Research and development expenses Restructuring and other impairment charges Interest exp
Slide 22: Appendix G: Adjusted Tax Rate
22 APPENDIX G – RECONCILIATION OF ADJUSTED TAX RATE DOLLARS IN THOUSANDS Three Months Ended June 26, 2016 Income from continuing operations before taxes Taxes on income from continuing operations Tax rate GAAP basis $67,402 $8,007 11.9% Restructuring and impairment charges (119) 102 Losses and other
Slide 23: Appendix H: 2016 Constant Currency Revenue Growth Guidance
23 APPENDIX H – RECONCILIATION OF 2016 CONSTANT CURRENCY REVENUE GROWTH GUIDANCE Low High Forecasted GAAP Revenue Growth 3.0% 4.0% Estimated Impact of Foreign Currency Fluctuations 2.0% 2.0% Forecasted Constant Currency Revenue Growth 5.0% 6.0%
Slide 24: Appendix I: 2016 Adjusted Gross Margin Guidance
24 APPENDIX I – RECONCILIATION OF 2016 ADJUSTED GROSS MARGIN GUIDANCE Note: In 2016, estimated losses and other charges, net relate primarily to facility consolidation expenses. Low High Forecasted GAAP Gross Margin 53.25% 54.15% Estimated losses and other charges, net 0.75% 0.85% Forecasted Adjuste
Slide 25: Appendix J: 2016 Adjusted Operating Margin Guidance
25 APPENDIX J – RECONCILIATION OF 2016 ADJUSTED OPERATING MARGIN GUIDANCE Note: In 2016, estimated losses and other charges, net relate primarily to facility consolidation expenses. Low High Forecasted GAAP Operating Margin 19.7% 20.0% Estimated losses and other charges, net 1.0% 1.1% Estimated inta
Slide 26: Appendix K: 2016 Adjusted Earnings Per Share Guidance
26 APPENDIX K – RECONCILIATION OF 2016 ADJUSTED EARNINGS PER SHARE GUIDANCE Low High Forecasted diluted earnings per share attributable to common shareholders $5.34 $5.41 Restructuring, impairment charges and special items, net of tax $0.83 $0.86 Intangible amortization expense, net of tax $0.95 $0.