Slide 1: Teleflex Incorporated Third Quarter 2016 Earnings Conference Call
1 Teleflex Incorporated Third 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 97714633
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 Third quarter 2016 revenue of $455.6 million • Up 2.7% vs. prior year period on an as-reported basis • Up 3.1% vs. prior year period on a constant currency basis Third quarter 2016 Earnings Per Share • GAAP EPS of $1.40, up 10.2% vs. prior year period • Adjusted EPS of $1.80, up
Slide 6: Third Quarter Highlights
6 Third Quarter Highlights Third quarter 2016 constant currency revenue growth of 3.1% • Sales volume of new products contributes ~1.3% • Sales volume of existing products contributes ~0.9% • Improved product pricing contributes ~0.7% • Previously completed M&A contributes ~0.2% Note: See appendices
Slide 7: Segment Revenue Review
7 Segment Revenue Review Q3’16 Q3’15 Constant Currency Revenue Commentary Vascular N.A.: $85.1 million, up 3.0% Anesthesia N.A.: $48.7 million, up 2.2% Surgical N.A.: $41.9 million, up 5.7% EMEA: $121.4 million, up 2.2% Asia: $64.0 million, up 2.1% OEM: $41.4 million, up 6.3% All Other: $53.1 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 Q3’16 Group Purchasing Organization Update • 5 new agreements • 5 renewed agreements IDN Update • 10 new agreements • 5 renewed agreements • 1 existing agreement not renewed
Slide 9: Product Updates: Percuvance Percutaneous Surgical System
9 Product Updates PRODUCT DESCRIPTION Percuvance® Percutaneous Surgical System Launched new second-generation 2.9mm Percuvance® System in August 2016 in the U.S. and received CE certification in December 2015. Second-generation device is more versatile, introduces electrosurgical and ligation capabi
Slide 10: Product Updates: ARROW JACC with Chlorag+ard
10 Product Updates PRODUCT DESCRIPTION ARROW® JACC with Chlorag+ard® Technology and TightTrack™ tunneler Received FDA 510(k) clearance to market its ARROW® JACC with Chlorag+ard® Technology and TightTrack™ tunneler. Long-term, tunneled, small french size antithrombogenic1 and antimicrobial2 central
Slide 11: Product Updates: ARROW Midline with Chlorag+ard
11 Product Updates PRODUCT DESCRIPTION ARROW® Midline with Chlorag+ard® Technology Received FDA 510(k) clearance to market its ARROW® Midline with Chlorag+ard® Technology. Antithrombogenic1 and antimicrobial2 peripheral venous catheter designed to minimize common midline catheter complications such
Slide 12: Product Updates: ARROW VPS Rhythm System
12 Product Updates PRODUCT DESCRIPTION ARROW® VPS Rhythm™ System Received CE certification from the British Standards Institution to commercialize the device in the European Union. The ARROW® VPS Rhythm™ System is a simple and flexible solution that helps take the guesswork out of central catheter p
Slide 13: Restructuring Update
13 Restructuring Update 2014 Manufacturing Footprint Realignment Plan In April 2014, our Board of Directors approved a restructuring plan involving the consolidation of operations and a related reduction in workforce at certain facilities, and the relocation of manufacturing operations from certain
Slide 14: Third Quarter Financial Review
14 Third Quarter Financial Review Revenue of $455.6 million • Up 2.7% vs. prior year period on an as-reported basis • Up 3.1% vs. prior year period on a constant currency basis Gross Margin • GAAP gross margin of 53.0%, up 160 bps vs. prior year period • Adjusted gross margin of 54.0%, up 200 bps vs
Slide 15: 2016 Financial Outlook Assumptions
15 2016 Financial Outlook Assumptions Updated previously provided full year 2016 Revenue Guidance • As-reported revenue growth range lowered from 3.0% - 4.0% to 2.4% to 2.8% • Constant currency revenue growth range lowered from 5.0% - 6.0% to 3.4% to 3.8% 2016 Gross Margin Guidance • Lowered GAAP gr
Slide 16: Any Questions?
16 Any Questions?
Slide 17: Thank You
17 Thank You
Slide 18: Appendices
18 Appendices
Slide 19: Non-GAAP Financial Measures
19 Non-GAAP Financial Measures The following appendices include, among other things, tables reconciling the following non-GAAP financial measures to the most comparable GAAP financial measure: • Constant currency revenue growth. This measure excludes the impact of translating the results of internat
Slide 20: Appendix A: Constant Currency Revenue Growth
20 APPENDIX A – RECONCILIATION OF CONSTANT CURRENCY REVENUE GROWTH DOLLARS IN MILLIONS September 25, 2016 September 27, 2015 Constant Currency Currency Total Vascular North America 85.1$ 82.6$ 3.0% 0.0% 3.0% Anesthesia North America 48.7 47.6 2.2% 0.0% 2.2% Surgical North America 41.9 39.6 5.7% (0.1
Slide 21: Appendix B: Revenue Growth
21 APPENDIX B – RECONCILIATION OF REVENUE GROWTH DOLLARS IN MILLIONS % Basis Points Three Months Ended September 27, 2015 Revenue As-Reported $443.7 Foreign Currency (1.6) -0.4% (36) Sales Volume Existing Products 4.2 0.9% 94 New Product Sales 5.8 1.3% 131 Pricing 2.9 0.7% 66 Acquisitions 0.6 0.1% 1
Slide 22: Appendix C: Adjusted Gross Profit and Margin
22 APPENDIX C – RECONCILIATION OF ADJUSTED GROSS PROFIT AND MARGIN DOLLARS IN THOUSANDS September 25, 2016 September 27, 2015 Teleflex gross profit as-reported 241,602$ 228,213$ Teleflex gross margin as-reported 53.0% 51.4% Losses and other charges, net (A) 4,247 2,327 Adjusted Teleflex gross profit
Slide 23: Appendix D: Adjusted Operating Profit and Margin
23 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, somewhat offset by the gain on sale of assets. In 2015, losses and other charges, net related primarily to facility cons
Slide 24: Appendix E: Adjusted EPS from Continuing Operations Q3 2016
24 APPENDIX E – RECONCILIATION OF ADJUSTED EPS FROM CONTINUING OPERATIONS QUARTER ENDED – SEPTEMBER 25, 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)
Slide 25: Appendix F: Adjusted EPS from Continuing Operations Q3 2015
25 APPENDIX F – RECONCILIATION OF ADJUSTED EPS FROM CONTINUING OPERATIONS QUARTER ENDED – SEPTEMBER 27, 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 (Gain)
Slide 26: Appendix G: Adjusted Tax Rate
26 APPENDIX G – RECONCILIATION OF ADJUSTED TAX RATE DOLLARS IN THOUSANDS Three Months Ended September 25, 2016 Income from continuing operations before taxes Taxes on income from continuing operations Tax rate GAAP basis $73,714 $7,514 10.2% Restructuring and impairment charges 3,027 955 Losses and
Slide 27: Appendix H: 2016 Constant Currency Revenue Growth Guidance
27 APPENDIX H – RECONCILIATION OF 2016 CONSTANT CURRENCY REVENUE GROWTH GUIDANCE Low High Forecasted GAAP Revenue Growth 2.4% 2.8% Estimated Impact of Foreign Currency Fluctuations 1.0% 1.0% Forecasted Constant Currency Revenue Growth 3.4% 3.8%
Slide 28: Appendix I: 2016 Adjusted Gross Margin Guidance
28 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 53.15% 54.10% Estimated losses and other charges, net 0.85% 0.90% Forecasted Adjuste
Slide 29: Appendix J: 2016 Adjusted Operating Margin Guidance
29 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 30: Appendix K: 2016 Adjusted Earnings Per Share Guidance
30 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 $0.84 $0.85 Intangible amortization expense, net of tax $0.98 $0.