News Details

Third Quarter Revenues of $457.2 million, up 10.5% over prior year period; up 10.2% on Constant Currency Basis

Third Quarter GAAP Diluted EPS of $1.18, up 12.4% over the prior year period; Adjusted Diluted EPS of $1.57 up 18.0%

2014 Guidance Range for Constant Currency Revenue Growth Increased from 7% to 9% to 7.5% to 9%

2014 Guidance Range for Adjusted Diluted EPS Increased from $5.45 to $5.60 to $5.60 to $5.70

WAYNE, Pa.--(BUSINESS WIRE)--Oct. 29, 2014-- Teleflex Incorporated (NYSE: TFX) (the “Company”) today announced financial results for the third quarter ended September 28, 2014.

Third quarter 2014 net revenues were $457.2 million, an increase of 10.5% over the prior year period. Excluding the impact of foreign currency fluctuations, third quarter 2014 net revenues increased 10.2% over the prior year period.

Third quarter 2014 GAAP diluted earnings per share from continuing operations were $1.18, as compared to $1.05 in the prior year period, an increase of 12.4%. Third quarter 2014 adjusted diluted earnings per share from continuing operations were $1.57, as compared to $1.33 in the prior year period, an increase of 18.0%.

“Building upon our performance in the first half of the year, Teleflex once again delivered double-digit constant currency revenue and adjusted earnings per share growth,” said Benson Smith, Chairman, President and Chief Executive Officer. “In addition, during the third quarter, the Company continued to expand operating margin and made progress in the initial phases of our facility restructuring initiatives.”

Added Mr. Smith, “Based on the Company’s performance during the first nine months of 2014, and our outlook for the fourth quarter, we are increasing our full year constant currency revenue growth guidance range from 7% to 9% to 7.5% to 9%, and increasing our full year adjusted diluted earnings per share guidance range from $5.45 to $5.60 to $5.60 to $5.70.”

THIRD QUARTER NET REVENUE BY SEGMENT

Vascular North America third quarter 2014 net revenues were $63.8 million, an increase of 15.9% compared to the prior year period. Excluding the impact of foreign currency fluctuations, third quarter 2014 net revenues increased 16.1% compared to the prior year period. The increase in constant currency revenue was largely due to product sales resulting from our acquisition of Vidacare, higher sales volume of existing products and new product sales.

Anesthesia/Respiratory North America third quarter 2014 net revenues were $54.7 million, an increase of 1.6% compared to the prior year period. Excluding the impact of foreign currency fluctuations, third quarter 2014 net revenues increased 1.8% compared to the prior year period. The increase in constant currency revenue was largely due to new product sales and price increases, somewhat offset by lower sales volume of existing products.

Surgical North America third quarter 2014 net revenues were $36.1 million, an increase of 5.8% compared to the prior year period. Excluding the impact of foreign currency fluctuations, third quarter 2014 net revenues increased 6.2% compared to the prior year period. The increase in constant currency revenue was largely due to higher sales volume of existing products and price increases.

EMEA third quarter 2014 net revenues were $141.2 million, an increase of 6.7% compared to the prior year period. Excluding the impact of foreign currency fluctuations, third quarter 2014 net revenues increased 5.6% compared to the prior year period. The increase in constant currency revenue was largely due to Vidacare product sales, higher sales volume of existing products, new product sales and price increases.

Asia third quarter 2014 net revenues were $62.0 million, an increase of 12.3% compared to the prior year period. Excluding the impact of foreign currency fluctuations, third quarter 2014 net revenues increased 11.8% compared to the prior year period. The increase in constant currency revenue was largely due to product sales resulting from the acquisitions of Mayo Healthcare and Vidacare, price increases and new product sales, somewhat offset by lower sales volume of existing products.

OEM and Development Services (“OEM”) third quarter 2014 net revenues were $39.2 million, an increase of 16.0% compared to the prior year period. Excluding the impact of foreign currency fluctuations, third quarter 2014 net revenues increased 15.9% compared to the prior year period. The increase in constant currency revenue was largely due to higher sales volume of existing products and new product sales, somewhat offset by lower average selling prices.

OTHER FINANCIAL HIGHLIGHTS AND KEY PERFORMANCE METRICS

Depreciation expense and amortization of intangible assets and deferred financing costs for first nine months of 2014 were $96.3 million compared to $79.0 million for the prior year period.

Cash and cash equivalents at September 28, 2014 were $286.4 million compared to $432.0 million at December 31, 2013. The decline in cash and cash equivalents is primarily due to a $235 million repayment of a portion of the outstanding principal amount of borrowings under the revolving credit facility.

Net accounts receivable at September 28, 2014 were $287.2 million compared to $295.3 million at December 31, 2013.

Net inventories at September 28, 2014 were $353.2 million compared to $333.6 million at December 31, 2013.

Net debt obligations at September 28, 2014 were $818.3 million compared to $902.7 million at December 31, 2013.

2014 OUTLOOK

The Company increased its full year 2014 constant currency revenue growth guidance from a range of 7% to 9% to a range of 7.5% to 9%, and increased its full year 2014 adjusted diluted earnings per share guidance from a range of $5.45 to $5.60 to a range of $5.60 to $5.70.

1= The reduction in restructuring, impairment charges and special items, net of tax reflects a shift in the estimated timing of certain restructuring costs from 2014 to 2015.

CONFERENCE CALL WEBCAST AND ADDITIONAL INFORMATION

As previously announced, Teleflex will comment on its financial results on a conference call to be held today at 8:00 a.m. (ET). The call will be available live and archived on the company’s website at www.teleflex.com and the accompanying presentation will be posted prior to the call. An audio replay will be available until November 5, 2014 at 11:59pm (ET), by calling 888-286-8010 (U.S./Canada) or 617-801-6888 (International), Passcode: 14097601.

ADDITIONAL NOTES

Constant currency revenue and growth exclude the impact of translating the results of international subsidiaries at different currency exchange rates from period to period.

Certain financial information is presented on a rounded basis, which may cause minor differences.

Segment results and commentary exclude the impact of discontinued operations, items included in restructuring and impairment charges, and losses and other charges set forth in the condensed consolidated statements of income and in the Reconciliation of Consolidated Statement of Income Items set forth below.

NOTES ON NON-GAAP FINANCIAL MEASURES

This press release includes certain non-GAAP financial measures, which include:

Adjusted diluted earnings per share. This measure excludes, depending on the period presented (i) the effect of charges associated with our restructuring programs, as well as goodwill and other asset impairment charges; (ii) losses, other charges and charge reversals, including acquisition and integration costs, charges related to facility consolidations, reversal of liabilities related to certain contingent consideration arrangements, the establishment of a litigation reserve and a litigation verdict against the Company with respect to a non-operating joint venture and reversal of a reserve related to a previously announced stock keeping unit benefit program; (iii) amortization of the debt discount on the Company’s convertible notes; (iv) intangible amortization expense; (v) loss on extinguishment of debt; and (vi) tax benefits resulting from the resolution of, or expiration of the statute of limitations with respect to, prior years’ tax matters. In addition, the calculation of diluted shares within adjusted earnings per share gives effect to the anti-dilutive impact of the Company’s convertible note hedge agreements, which reduce the potential economic dilution that otherwise would occur upon conversion of the Company’s senior subordinated convertible notes (under GAAP, the anti-dilutive impact of the convertible note hedge agreements is not reflected in diluted shares).

Constant currency revenue. This measure excludes the impact of translating the results of international subsidiaries at different currency exchange rates from period to period.

Management believes these measures are useful to investors because they eliminate items that do not reflect Teleflex’s day-to-day operations. In addition, management believes that the calculation of non-GAAP diluted shares is useful to investors because it provides insight into the offsetting economic effect of the convertible note hedge against conversions of the convertible notes. Management uses these financial measures for internal managerial purposes, when publicly providing guidance on possible future results, and to assist in our evaluation of period-to-period comparisons. These financial measures are presented in addition to results presented in accordance with generally accepted accounting principles (“GAAP”) and should not be relied upon as a substitute for GAAP financial measures. Tables reconciling historical non-GAAP measures to the most directly comparable historical GAAP measures are set forth below. Tables reconciling forecasted non-GAAP measures to the most directly comparable forecasted GAAP measures are set forth above.

(A) In 2014, losses, other charges and charge reversals include approximately ($1.5) million, net of tax, or ($0.03) per share, related to the reversal of contingent consideration liabilities; and approximately $1.5 million, net of tax, or $0.03 per share, related to acquisition and integration costs, and charges related to facility consolidations. In 2013, losses and other charges include approximately ($4.4) million, net of tax, or ($0.10) per share, related to the reversal of contingent consideration liabilities; approximately $2.1 million, net of tax, or $0.05 per share, related to acquisition and integration costs.

(B) The tax adjustment represents a net benefit resulting from the resolution of, or the expiration of statute of limitations with respect to various prior years’ U.S. federal, state and foreign tax matters.

(C) Adjusted diluted shares are calculated by giving effect to the anti-dilutive impact of the Company’s convertible note hedge agreements, which reduce the potential economic dilution that otherwise would occur upon conversion of our senior subordinated convertible notes. Under GAAP, the anti-dilutive impact of the convertible note hedge agreements is not reflected in diluted shares.

(A) In 2014, losses, other charges and charge reversals include approximately ($8.1) million, net of tax, or ($0.18) per share, related to the reversal of contingent consideration liabilities; and approximately $7.0 million, net of tax, or $0.16 per share, related to acquisition and integration costs, and charges related to facility consolidations. In 2013, losses and other charges include approximately ($12.4) million, net of tax, or ($0.29) per share, related to the reversal of contingent consideration liabilities; approximately $0.8 million, net of tax, or $0.02 per share, related to a litigation verdict against the Company with respect to a non-operating joint venture; $5.0 million, net of tax, or $0.12 per share, related to acquisition and integration costs; and ($0.4) million, net of tax, or ($0.01) per share, related to reversal of a reserve with respect to a previously announced stock keeping unit (“SKU”) rationalization charge.

(B) The tax adjustment represents a net benefit resulting from the resolution of, or the expiration of statute of limitations with respect to various prior years’ U.S. federal, state and foreign tax matters.

(C) Adjusted diluted shares are calculated by giving effect to the anti-dilutive impact of the Company’s convertible note hedge agreements, which reduce the potential economic dilution that otherwise would occur upon conversion of our senior subordinated convertible notes. Under GAAP, the anti-dilutive impact of the convertible note hedge agreements is not reflected in diluted shares.

ABOUT TELEFLEX INCORPORATED

Teleflex is a leading global provider of specialty medical devices for a range of procedures in critical care and surgery. Our mission is to provide solutions that enable healthcare providers to improve outcomes and enhance patient and provider safety. Headquartered in Wayne, PA, Teleflex employs approximately 11,500 people worldwide and serves healthcare providers in more than 150 countries. For additional information about Teleflex please refer to www.teleflex.com.

CAUTION CONCERNING FORWARD-LOOKING INFORMATION

This press release contains forward-looking statements, including, but not limited to, forecasted 2014 GAAP and constant currency revenue growth and GAAP and adjusted diluted earnings per share. Actual results could differ materially from those in the forward-looking statements due to, among other things, conditions in the end markets we serve, customer reaction to new products and programs, our ability to achieve sales growth, price increases or cost reductions; changes in the reimbursement practices of third party payors; our ability to realize efficiencies and to execute on our strategic initiatives; changes in material costs and surcharges; market acceptance and unanticipated difficulties in connection with the introduction of new products and product line extensions; product recalls; unanticipated difficulties in connection with the consolidation of manufacturing and administrative functions, including as a result of difficulties with various employees, labor representatives or regulators; the loss of skilled employees in connection with such initiatives; unanticipated difficulties, expenditures and delays in complying with government regulations applicable to our businesses; the impact of government healthcare reform legislation; our ability to meet our debt obligations; changes in general and international economic conditions; and other factors described or incorporated in our filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the year ended December 31, 2013.

Source: Teleflex Incorporated

Teleflex Incorporated
Jake Elguicze
Treasurer and Vice President of Investor Relations
610-948-2836