Slide 1: Teleflex Incorporated Second Quarter 2018 Earnings Conference Call
Teleflex Incorporated Second Quarter 2018 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 4890067 2
Slide 3: Today's Speakers
Today’s Speakers Liam Kelly President and CEO Thomas Powell Executive Vice President and CFO Jake Elguicze Treasurer and Vice President, Investor Relations 3
Slide 4: Note on Forward-Looking Statements
Note on Forward-Looking Statements This presentation and our discussion contain forward-looking information and statements including, but not limited to, forecasted organic constant currency revenue growth for the second half of 2018 and the items that are expected to contribute to that growth; fore
Slide 5: 2Q18 Highlights
2Q18 Highlights Revenue Highlights • As-reported revenue increased 15.4% versus 2Q17 • Constant currency revenue increased 12.4% versus 2Q17 • Excluding the benefit of one additional shipping day, 2Q18 organic constant currency revenue growth lower than previously expected primarily due to the timin
Slide 6: 2Q Constant Currency Revenue Growth
2Q Constant Currency Revenue Growth Q2 2018 Constant Currency Revenue Growth New Product Introductions 1.7% Shipping Day Impact 1.0% Volume (excluding surgical product line exit and shipping day impact) 0.8% Price 0.7% Surgical Product Line Exit (0.6%) M&A NeoTract 8.8% Constant Currency Revenue Gro
Slide 7: Segment Revenue Review
Segment Revenue Review Total Constant Dollars Q2’18 Q2’17 Currency Sales Currency in Millions Revenue Revenue Impact Growth Growth Vascular NA $80.1 $78.8 1.6% 0.2% 1.4% Interventional NA $65.0 $58.3 11.3% 0.0% 11.3% Anesthesia NA $50.5 $49.1 2.9% 0.2% 2.7% Surgical NA $40.7 $44.7 (9.0%) 0.2% (9.2%)
Slide 8: Product and Clinical Updates
Product and Clinical Updates Prostatic Urethral Lift Included in American Urological Association (AUA) Guidelines KEY TAKEAWAYS • AUA recommended use of Prostatic Urethral Lift (PUL) as a standard of care treatment for lower urinary tract symptoms due to benign prostatic hyperplasia (BPH) • AUA reco
Slide 9: Product and Clinical Updates
Product and Clinical Updates UroLift® Clinical and Economic Publications KEY TAKEAWAYS • Independent analysis in U.K. highlights cost effectiveness of UroLift System over Transurethral Resection of the Prostate (TURP); estimated savings of ~£27 million per year over 5 years for each annual cohort of
Slide 10: 1H18 vs. 2H18 Organic Constant Currency Revenue Growth Drivers
1H18 vs. 2H18 Organic Constant Currency Revenue Growth Drivers 1H 2018 Organic Constant Currency Revenue Growth 2.7% NeoTract ~ 1.5% Vascular Solutions ~ 1.0% Shipping Day Impact ~ 1.0% Surgical Product Line Exit ~ 0.4% All Other ~ 1.2% 2H 2018 Organic Constant Currency Revenue Growth 1 7.8% 1: Refl
Slide 11: Second Quarter Financial Review
Second Quarter Financial Review Revenue of $609.9 million • Up 15.4% vs. prior year period on an as-reported basis • Up 12.4% vs. prior year period on a constant currency basis Gross Margin • GAAP gross margin of 56.5%, up 160 bps vs. prior year period • Adjusted gross margin of 57.1%, up 120 bps vs
Slide 12: 2018 Financial Outlook
2018 Financial Outlook 2018 Revenue Guidance • Lowered as-reported revenue growth guidance from a range of between 15% and 16% to a range of between 14% and 15% • Reaffirmed constant currency revenue growth guidance range of between 12% and 13% • Reaffirmed organic constant currency revenue growth g
Slide 13: Question and Answer Section
Question and Answer Section 13
Slide 14: Thank You
THANK YOU 14 Veleflex:
Slide 15: Appendices
Appendices Veleflex:
Slide 16: Non-GAAP Financial Measures
Non-GAAP Financial Measures The presentation to which these appendices are attached and 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 e
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) Total Currency Constant Currency July 1, 2018 July 2, 2017 Revenue Growth Impact Revenue Growth Vascular North America $ 80.1 $ 78.8 1.6% 0.2% 1.4% Interventional North Amer
Slide 18: Appendix B – Reconciliation of Constant Currency Revenue Growth
Appendix B – Reconciliation of Constant Currency Revenue Growth Dollars in Millions Six Months Ended % Increase / (Decrease) Total Currency Constant Currency July 1, 2018 July 2, 2017 Revenue Growth Impact Revenue Growth Vascular North America $ 163.1 $ 157.8 3.4% 0.3% 3.1% Interventional North Amer
Slide 19: Appendix C – Revenue Growth
Appendix C – Revenue Growth Dollars in Millions Year-Over-Year Growth % Basis Points Three Months Ended July 2, 2017 Revenue As-Reported $ 528.6 Foreign currency $ 14.0 3.0% 300 Volume (excluding Surgical product line exit and the impact of shipping days) $ 4.2 0.8% 80 Shipping day impact $ 5.4 1.0%
Slide 20: Appendix D – Revenue Growth
Appendix D – Revenue Growth Dollars in Millions Year-Over-Year Growth % Basis Points Six Months Ended July 2, 2017 Revenue As-Reported $ 1,016.5 Foreign currency $ 38.5 4.3% 430 Volume (excluding Surgical product line exit and the impact of shipping days) $ 12.6 1.2% 120 Shipping day impact $ (1.3)
Slide 21: Appendix E – Reconciliation of Adjusted Gross Profit and Margin
Appendix E – Reconciliation of Adjusted Gross Profit and Margin Dollars in Thousands Three Months Ended July 1,2018 July 2, 2017 Teleflex gross profit as-reported $ 344,778 $ 290,284 Teleflex gross margin as-reported 56.5% 54.9% Restructuring, restructuring related and impairment items (A) 3,556 2,4
Slide 22: Appendix F – Reconciliation of Adjusted Gross Profit and Margin
Appendix F – Reconciliation of Adjusted Gross Profit and Margin Dollars in Thousands Six Months Ended July 1, 2018 July 2, 2017 Teleflex gross profit as-reported $ 676,048 $ 545,844 Teleflex gross margin as-reported 56.5% 53.7% Restructuring, restructuring related and impairment items (A) 5,515 6,11
Slide 23: Appendix G – Reconciliation of Adjusted Operating Profit and Margin
Appendix G – Reconciliation of Adjusted Operating Profit and Margin Dollars in Thousands Three Months Ended July 1, 2018 July 2, 2017 Teleflex incom e from continuing operations before interest, loss on extinguishm ent of debt and taxes $ 33,490 $ 110,202 Teleflex incom e from continuing operations
Slide 24: Appendix H – Reconciliation of Adjusted Operating Profit and Margin
Appendix H – Reconciliation of Adjusted Operating Profit and Margin Dollars in Thousands Six Months Ended July 1, 2018 July 2, 2017 Teleflex incom e from continuing operations before interest, loss on extinguishm ent of debt and taxes $ 120,333 $ 171,021 Teleflex incom e from continuing operations b
Slide 25: Appendix I – Reconciliation of Adjusted EPS from Continuing Operations
Appendix I – Reconciliation of Adjusted EPS from Continuing Operations Three Months Ended– July 1, 2018 Dollars in Millions, except per share data Selling, general Restructuring Shares used in Cost of Research and Loss on Incom e (loss) and and Interest Incom e Earnings per calculation of GAAP goods
Slide 26: Appendix J – Reconciliation of Adjusted EPS from Continuing Operations
Appendix J – Reconciliation of Adjusted EPS from Continuing Operations Three Months Ended – July 2, 2017 Dollars in Millions, except per share data Selling, general Restructuring Shares used in Cost of Research and Loss on Incom e (loss) and and Interest Incom e Diluted earnings calculation of GAAP
Slide 27: Appendices I and J – tickmarks
Appendices I and J – 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, outsource distribution operations, improve o
Slide 28: Appendix K – Reconciliation of Adjusted EPS from Continuing Operations
Appendix K – Reconciliation of Adjusted EPS from Continuing Operations Six Months Ended – July 1, 2018 Dollars in Millions, except per share data Selling, general Restructuring Shares used in Cost of Research and Loss on Incom e (loss) and and Interest Incom e Earnings per calculation of GAAP goods
Slide 29: Appendix L – Reconciliation of Adjusted EPS from Continuing Operations
Appendix L – Reconciliation of Adjusted EPS from Continuing Operations Six Months Ended – July 2, 2017 Dollars in Millions, except per share data Selling, general Restructuring Shares used in Cost of Research and Loss on Incom e (loss) and and Interest Incom e Diluted earnings calculation of GAAP go
Slide 30: Appendices K and L – tickmarks
Appendices K and L – 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, outsource distribution operations, improve o
Slide 31: Appendix M – Reconciliation of Adjusted Tax Rate
Appendix M – Reconciliation of Adjusted Tax Rate Dollars in Thousands Three Months Ended July 1, 2018 Incom e from Taxes on continuing incom e from operations continuing before taxes operations Tax rate (A) Other items - These are discrete items that occur sporadically and can affect period-to-perio
Slide 32: Appendix N – Reconciliation of Adjusted Tax Rate
Appendix N – Reconciliation of Adjusted Tax Rate Dollars in Thousands Six Months Ended July 1, 2018 Incom e from Taxes on continuing incom e from operations continuing before taxes operations Tax rate (A) Other items - These are discrete items that occur sporadically and can affect period-to-period
Slide 33: Appendix O – Reconciliation of 2018 Constant Currency and Organic Guidance
Appendix O – Reconciliation of 2018 Constant Currency and Organic Constant Currency Revenue Growth Guidance 2018 Guidance Low High Forecasted GAAP Revenue Growth 14.0% 15.0% Forecasted impact of foreign currency exchange rate fluctuations 2.0% 2.0% Forecasted Constant Currency Revenue Growth 12.0% 1
Slide 34: Appendix P – Reconciliation of 2018 Adjusted Gross Margin Guidance
Appendix P – Reconciliation of 2018 Adjusted Gross Margin Guidance 2018 Guidance Low High Forecasted GAAP Gross Margin 56.85% 57.50% Estimated restructuring, restructuring related and impairment items (A) 0.60% 0.55% Estimated acquisition, integration and divestiture related items (B) 0.05% 0.00% Es
Slide 35: Appendix Q – Reconciliation of 2018 Adjusted Operating Margin Guidance
Appendix Q – Reconciliation of 2018 Adjusted Operating Margin Guidance 2018 Guidance Low High Forecasted GAAP Operating Margin 14.85% 15.45% Estimated restructuring, restructuring related and impairment items (A) 3.20% 3.15% Estimated acquisition, integration and divestiture related items (B) 1.95%
Slide 36: Appendix R – Reconciliation of 2018 Adjusted Earnings Per Share Guidance
Appendix R – Reconciliation of 2018 Adjusted Earnings Per Share Guidance 2018 Guidance Low High Forecasted GAAP Diluted Earnings Per Share $4.60 $4.70 Estimated Restructuring, restructuring related and impairment items (A) $1.57 $1.60 Estimated Acquisition, integration and divestiture related items
Slide 37: Appendix S – 2018 Financial Outlook Assumptions
Appendix S – 2018 Financial Outlook Assumptions Euro to U.S. Dollar exchange rate assumed to be approximately 1.20 for full year 2018 Adjusted weighted average shares expected to be approximately 46.9 million for full year 2018 2018 Calendar of shipping days: Q1’18 vs. Q1’17: 1 less day Q2’18 vs. Q2
Slide 38: Appendix T – Teleflex Restructuring Plan Summary
Appendix T – Teleflex Restructuring Plan Summary In addition to the 2018 Footprint realignment plan, we have ongoing restructuring programs related to (i) the integration of Vascular Solutions into Teleflex; (ii) the centralization of certain administrative functions in our EMEA segment; (iii) the c
Slide 39: Appendix U – GPO and IDN Review
Appendix U – GPO and IDN Review Group Purchasing Organization Update • 5 renewed agreements • 3 new agreements • 0 existing agreements lost IDN Update • 4 renewed agreements • 4 new agreements • 0 existing agreements lost 39