Slide 1: Teleflex Incorporated Second Quarter 2020 Earnings Conference Call
Teleflex Incorporated Second Quarter 2020 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 is available by dialing (855) 859-2056 or for international calls, (404) 537-3406, pass code number 1778009 2
Slide 3: Today's Speakers
Today’s Speakers Liam Kelly Chairman, President and CEO Thomas Powell Executive VP and CFO Jake Elguicze Treasurer and VP, Investor Relations 3
Slide 4: Note on Forward-Looking Statements and Non-GAAP Financial Measures
Note on Forward-Looking Statements This presentation contains forward-looking statements, including, but not limited to, estimated pre-tax charges we expect to incur in connection with the workforce reduction plan we commenced in the second quarter of 2020 (the “2020 workforce reduction plan”) and o
Slide 5: Executive Overview
Executive Overview Liam Kelly Chairman, President and CEO 5
Slide 6: 2Q 2020 Highlights
2Q 2020 Highlights • Q2 revenue and adjusted earnings per share significantly better than internal expectations Q2 Summary • New workforce reduction plan announced to further improve long-term profitability Business Performance • Management estimates that COVID-19 had a net negative impact to revenu
Slide 7: 2Q 2020 Financial Results
2Q 2020 Financial Results Revenue Highlights • 2Q20 as reported revenue decreased 13.1% versus 2Q19 • 2Q20 constant currency revenue decreased 12.0% versus 2Q19 • Management estimates that COVID-19 had a net negative impact of approximately $130 million, or 20% Global Product Revenue Drivers1 • Vasc
Slide 8: COVID-19 Update
COVID-19 Update • Estimated 2Q COVID-19 net revenue headwind of ~ $130 million, or ~20% • Vascular Access: + ~ $8 million • Interventional Access: - ~ $25 million • Anesthesia: - ~ $18 million • Surgical: - ~ $28 million • Interventional Urology: - ~ $58 million • OEM: - ~ $15 million • Other: + ~ $
Slide 9: 2Q20 Segment Revenue Review
2Q20 Segment Revenue Review As- Constant Estimated Dollars Q2’20 Q2’19 Reported Currency Currency COVID-19 in Millions Revenue Revenue Revenue Impact Growth Impact Growth Americas $312.5 $373.8 (16.4%) (0.4%) (16.0%) (~24%) EMEA $131.6 $147.1 (10.5%) (2.5%) (8.0%) (~9%) Asia $67.1 $75.2 (10.8%) (3.0
Slide 10: 2Q20 Global Product Category Revenue Review
2Q20 Global Product Category Revenue Review As- Constant Estimated Dollars Q2’20 Q2’19 Reported Currency Currency COVID-19 in Millions Revenue Revenue Revenue Impact Growth Impact Growth Vascular Access $164.9 $153.6 7.4% (1.4%) 8.8% ~5% Interventional $82.6 $104.8 (21.2%) (0.9%) (20.3%) (~24%) Anes
Slide 11: Clinical and Commercial Updates: UroLift System
Clinical and Commercial Updates Int. Urology: UroLift® System KEY TAKEAWAYS • Two studies presented at AUA 2020 Virtual Science Event o 1) Results from a meta-analysis of patients’ sexual function following treatment with the UroLift System versus medical therapy 1 o 2) Analysis compared patient out
Slide 12: Clinical and Commercial Updates: UroLift ATC System
Clinical and Commercial Updates Int. Urology: UroLift® System KEY TAKEAWAYS • FDA 510(k) clearance for UroLift® ATC™ System o An enhanced delivery device that facilitates advanced tissue control for challenging anatomies such as an obstructive median lobe and large lateral lobes before implant deplo
Slide 13: Clinical and Commercial Updates: CTO-PCI IDE Study
Clinical and Commercial Updates Interventional: CTO-PCI IDE Study KEY TAKEAWAYS • CTO-PCI IDE Study o Prospective, single-arm IDE study targeting 150 patients across ~15 US sites, to evaluate the performance of Teleflex coronary guidewires and specialty catheters in Chronic Total Occlusion (CTO) per
Slide 14: Financial Overview
Financial Overview Thomas Powell Executive VP and CFO 14
Slide 15: 2Q20 Financial Review
2Q20 Financial Review Global revenue of $567.0 million • Decreased 13.1% vs. prior year period on an as-reported basis • Decreased 12.0% vs. prior year period on a constant currency basis Gross margin • GAAP gross margin of 49.1%, down 490 bps vs. prior year period • Adjusted gross margin of 53.9%,
Slide 16: 2020 Workforce Reduction Plan Announced
2020 Workforce Reduction Plan Announced • During the second quarter of 2020, we committed to a workforce reduction designed to improve profitability and reduce cost primarily by streamlining certain sales and marketing functions in our EMEA segment and certain manufacturing operations in our OEM seg
Slide 17: Key Takeaways
Key Takeaways • Teleflex delivered solid performance in the second quarter of 2020 on an underlying basis • Remain committed to managing business resources prudently during the COVID-19 global pandemic • Poised to accelerate growth as interventional urology, interventional access, and surgical proce
Slide 18: Question and Answer Section
Question and Answer Section 18
Slide 19: Thank You
THANK YOU Veleflex
Slide 20: Appendices
Appendices Veleflex
Slide 21: 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 applicable non-GAAP financial measures to the most comparable GAAP financial measure: • Constant currency revenue growth. Thi
Slide 22: Non-GAAP Adjustments
Non-GAAP Adjustments The following is an explanation of certain of the adjustments that are applied with respect to one or more of the non-GAAP financial measures that appear in the presentation to which these appendices are attached: Restructuring, restructuring related and impairment items - Restr
Slide 23: Appendix A – Reconciliation of Adjusted Gross and Operating Margin, Income Tax and EPS
Appendix A – Reconciliation of Adjusted Gross and Operating Margin, Income Tax and EPS (Dollars in millions, except per share data) Three M onths Ended June 28, 2020 Quarter Ended - June 30, 2019 Incom e Incom e Gross Operating Incom e Tax Diluted Earnings Gross Operating Incom e Tax Diluted Earning
Slide 24: Appendix B – Reconciliation of Adjusted EPS, Three Months Ended June 28, 2020
Appendix B – Reconciliation of Adjusted EPS from Continuing Operations Three Months Ended June 28, 2020 (Dollars in Millions, except per share data) Diluted earnings per Cost of goods sold, Selling, general and Research and Incom e (loss) from Restructuring and share from excluding intangible adm in
Slide 25: Appendix C – Reconciliation of Adjusted EPS, Three Months Ended June 30, 2019
Appendix C – Reconciliation of Adjusted EPS from Continuing Operations Three Months Ended June 30, 2019 (Dollars in Millions, except per share data) Cost of goods sold, Selling, general and Research and Incom e (loss) from Diluted earnings per Restructuring and excluding intangible adm inistrative d
Slide 26: Appendix D – Reconciliation of Adjusted EPS, YTD June 28, 2020
Appendix D – Reconciliation of Adjusted EPS from Continuing Operations YTD Period Ended June 28, 2020 (Dollars in Millions, except per share data) Diluted earnings per Cost of goods sold, Selling, general and Research and Incom e (loss) from Restructuring and share from excluding intangible adm inis
Slide 27: Appendix E – Reconciliation of Adjusted EPS, YTD June 30, 2019
Appendix E – Reconciliation of Adjusted EPS from Continuing Operations YTD Period Ended– June 30, 2019 (Dollars in Millions, except per share data) Diluted earnings per Cost of goods sold, Selling, general and Research and (Gain) loss on sale Incom e (loss) from Restructuring and share from excludin
Slide 28: Appendix A, B, C, D, E tickmarks
Appendix A, B, C, D, E tickmarks (A) Restructuring, restructuring related and impairment items – For the three months ended June 28, 2020, pre-tax restructuring charges were $19.0 million, pre-tax restructuring related charges were $6.4 million; there were no pre-tax impairment charges. For the thre
Slide 29: Appendix F – 2020 Financial Outlook Assumptions
Appendix F – 2020 Financial Outlook Assumptions • Foreign Exchange: Euro to U.S. Dollar exchange rate assumed to be approximately 1.10 for full year 2020 (1.11 as of the 1Q 2020 earnings) • Share count: Adjusted weighted average shares expected to be approximately 47.3 million for full year 2020 (47
Slide 30: Appendix G – Restructuring and Similar Cost Savings Initiatives Summary
Appendix G – Restructuring and Similar Cost Savings Initiatives Summary During the second quarter of 2020, we committed to workforce reduction designed to improve profitability and reduce cost primarily by streamlining certain sales and marketing functions in our EMEA segment and certain manufacturi
Slide 31: Appendix G Footnotes
Appendix G Footnotes (1) Includes estimated charges associated with the 2020 Workforce reduction plan of $10 million to $13 million. (2) Represents charges that are directly related to restructuring programs and principally constitute costs to transfer manufacturing operations to existing lower-cost
Slide 32: Appendix H – June 2020 Year-to-Date GPO and IDN Review
Appendix H – June 2020 Year-to-Date GPO and IDN Review Group Purchasing Organization Update 1Q20 2Q20 Renewed agreements 2 8 New agreements 1 0 Existing agreements lost 0 0 IDN Update 1Q20 2Q20 Renewed agreements 6 2 New agreements 7 6 Existing agreements lost 1 0 32