Slide 1: Teleflex Incorporated Third Quarter 2017 Earnings Conference Call
Teleflex Incorporated Third Quarter 2017 Earnings Conference Call 1
Slide 2: Conference Call Logistics
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 3479079 2
Slide 3: Introductions
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 3
Slide 4: Note on Forward-Looking Statements and Non-GAAP Financial Measures
Note on Forward-Looking Statements This presentation and our discussion contain forward-looking information and statements including, but not limited to, forecasted 2017 GAAP and constant currency revenue growth, GAAP and adjusted gross and operating margins and GAAP and adjusted earnings per share
Slide 5: Executive Summary
Executive Summary Third quarter 2017 revenue of $534.7 million • Up 17.4% vs. prior year period on an as-reported basis • Up 15.4% vs. prior year period on a constant currency basis Third quarter 2017 Earnings Per Share • GAAP EPS of $1.70, up 21.4% vs. prior year period • Adjusted EPS of $2.12, up
Slide 6: Third Quarter Highlights
Third Quarter Highlights Q3 2017 Constant Currency Revenue Growth Volume 2.4% New product introductions 2.1% Price 0.5% M&A excluding Vascular Solutions 0.9% Vascular Solutions 9.5% Constant currency revenue growth 15.4% 6 Note: See appendices for reconciliations of non-GAAP information
Slide 7: Segment Revenue Review
Segment Revenue Review Q3’17 Q3’16 12% 19% 17% 19% 9% 8% 9% 9% 14% 9% 13% 11% 25% 26% Vascular North America Surgical North America Vascular North America Surgical North America Anesthesia North America EMEA Anesthesia North America EMEA Asia OEM Asia OEM All Other All Other Constant Currency Revenu
Slide 8: Acquisition Update
Acquisition Update Completed Acquisition of NeoTract on October 2, 2017 Highly strategic and complementary acquisition that significantly advances Teleflex’s offering of urological solutions − Single-product company with growth profile better than Vidacare − Expands Teleflex’s product portfolio into
Slide 9: Acquisition Update
Acquisition Update Transaction completed in September 2017 Acquired certain assets from Tianjin Medis Medical Co. LTD, a contract manufacturer based in Tianjin, China Consists of substantially all of the assets used by Tianjin to manufacture a line of the Teleflex’s laryngeal masks 9
Slide 10: Restructuring Update
Restructuring Update With respect to our restructuring plans and programs, the table below summarizes (1) the estimated total cost and estimated annual pre-tax savings and synergies once the programs are completed; (2) the costs incurred and estimated pre-tax savings realized through December 31, 20
Slide 11: Third Quarter Financial Review
Third Quarter Financial Review Revenue of $534.7 million • Up 17.4% vs. prior year period on an as-reported basis • Up 15.4% vs. prior year period on a constant currency basis Gross Margin • GAAP gross margin of 55.2%, up 220 bps vs. prior year period • Adjusted gross margin of 55.7%, up 170 bps vs.
Slide 12: 2017 Financial Outlook Assumptions
2017 Financial Outlook Assumptions 2017 Revenue Guidance • Raised as-reported revenue growth range from 11.5% - 13.0% to 15.0% - 15.5% • Raised constant currency revenue growth range from 12.5% - 14.0% to 14.25% - 14.75% 2017 Gross Margin Guidance • Raised the low-end of the GAAP gross margin range
Slide 13: Any Questions?
Any Questions? Veleflex:
Slide 14: Thank You
Thank You Veleflex:
Slide 15: Appendices
—=———— Appendices Veleflex:
Slide 16: Non-GAAP Financial Measures
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 internation
Slide 17: Appendix A – Reconciliation of Constant Currency Revenue Growth
APPENDIX A – RECONCILIATION OF CONSTANT CURRENCY REVENUE GROWTH DOLLARS IN MILLIONS Three Months Ended % Increase / (Decrease) October 1, 2017 September 25, 2016 Constant Currency Currency Total Vascular North America $ 91.0 $ 85.1 6.7% 0.2% 6.9% Anesthesia North America 50.8 48.7 4.3% 0.1% 4.4% Sur
Slide 18: Appendix B – Revenue Growth
APPENDIX B – RECONCILIATION OF REVENUE GROWTH DOLLARS IN MILLIONS Year-over-year grow th % Basis Points Three Months Ended Septem ber 25, 2016 Revenue As-Reported $455.6 Foreign Currency 7.7 2.0% 200 Volume 11.0 2.4% 240 Acquisitions 1 48.2 10.4% 1,040 New Product Sales 9.6 2.1% 210 Pricing 2.5 0.5%
Slide 19: Appendix C – Adjusted Gross Profit and Margin
APPENDIX C – RECONCILIATION OF ADJUSTED GROSS PROFIT AND MARGIN DOLLARS IN THOUSANDS Three Months Ended October 1, 2017 September 25, 2016 Teleflex gross profit as-reported $ 295,227 $ 241,602 Teleflex gross margin as-reported 55.2% 53.0% Restructuring, restructuring related and impairment items (A)
Slide 20: Appendix D – Reconciliation of Adjusted Operating Profit and Margin
APPENDIX D – RECONCILIATION OF ADJUSTED OPERATING PROFIT AND MARGIN DOLLARS IN THOUSANDS Three Months Ended October 1, 2017 Septem ber 25, 2016 Teleflex incom e from continuing operations before interest and taxes $ 110,354 $ 86,487 Teleflex incom e from continuing operations before interest and tax
Slide 21: Appendix E – Adjusted EPS from Continuing Operations, Q3 2017
APPENDIX E – RECONCILIATION OF ADJUSTED EPS FROM CONTINUING OPERATIONS QUARTER ENDED – OCTOBER 1, 2017 DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA Selling, general Restructuring Net incom e (loss) Diluted earnings Shares used in Cost of Research and (Gain) loss on and and other Interest Incom e attri
Slide 22: Appendix F – Adjusted EPS from Continuing Operations, Q3 2016
APPENDIX F – RECONCILIATION OF ADJUSTED EPS FROM CONTINUING OPERATIONS QUARTER ENDED – SEPTEMBER 25, 2016 DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA Net incom e (loss) Diluted earnings Shares used in Cost of Selling, general Research and Restructuring and (Gain) loss on sale Interest Incom e attribu
Slide 23: Appendices E and F – Tickmarks
APPENDICES E AND F – TICKMARKS (A) Restructuring, restructuring related and impairment items - Restructuring programs involve discrete initiatives designed to, among other things, consolidate or relocate manufacturing, administrative and other facilities, improve operating efficiencies and integrate
Slide 24: Appendix G – Reconciliation of Adjusted Tax Rate
APPENDIX G – RECONCILIATION OF ADJUSTED TAX RATE DOLLARS IN THOUSANDS Three Months Ended October 1, 2017 Incom e from Taxes on continuing incom e from operations continuing before taxes operations Tax rate GAAP basis $89,376 $9,978 11.2% Restructuring, restructuring related and impairment items 2,99
Slide 25: H – 2017 Constant Currency Revenue Growth Guidance
APPENDIX H – RECONCILIATION OF 2017 CONSTANT CURRENCY REVENUE GROWTH GUIDANCE Low High Forecasted GAAP Revenue Grow th 15.00% 15.50% Estimated Impact of Foreign Currency Exchange Rate Fluctuations -0.75% -0.75% Forecasted Constant Currency Revenue Grow th 14.25% 14.75% 25
Slide 26: I – 2017 Adjusted Gross Margin Guidance
APPENDIX I – RECONCILIATION OF 2017 ADJUSTED GROSS MARGIN GUIDANCE Low High Forecasted GAAP Gross Margin 54.60% 54.80% Restructuring, restructuring related and impairment items (A) 0.60% 0.65% Acquisition, integration and divestiture related items (B) 0.50% 0.55% Forecasted Adjusted Gross Margin 55.
Slide 27: J – 2017 Adjusted Operating Margin Guidance
APPENDIX J – RECONCILIATION OF 2017 ADJUSTED OPERATING MARGIN GUIDANCE Low High Forecasted GAAP Operating Margin 17.40% 17.55% Estimated restructuring, restructuring related and impairment items (A) 1.68% 1.70% Estimated acquisition, integration and divestiture related items (B) 1.96% 1.97% Estimate
Slide 28: K – 2017 Adjusted Earnings Per Share Guidance
APPENDIX K – RECONCILIATION OF 2017 ADJUSTED EARNINGS PER SHARE GUIDANCE Low High Forecasted diluted earnings per share attributable to common shareholders $5.61 $5.66 Restructuring, restructuring related and impairment items, net of tax (A) $0.50 $0.52 Acquisition, integration and divestiture items
Slide 29: K – Tickmarks
APPENDIX K – TICKMARKS (A) Restructuring programs involve discrete initiatives designed to, among other things, consolidate or relocate manufacturing, administrative and other facilities, improve operating efficiencies and integrate acquired businesses. Our restructuring charges consist of terminati
Slide 30: L – Group Purchasing Organization and IDN Review
APPENDIX L – GROUP PURCHASING ORGANIZATION AND IDN REVIEW Track record of expansion of contractual agreements continues in Q3’17 Group Purchasing Organization Update • 5 renewed agreements IDN Update • 11 renewed agreements • 1 existing agreements not renewed 30