Full Press Release Details
Mexico to Czech RepublicAnnounced the closure of a distribution center in France 12 Full Year Strategic Highlights Completed mix of market-share enhancing and technology acquisitionsLMA International N.V. and affiliatesSemprus BioSciencesHotspur TechnologiesAxiom Technology Partners, LLCEZ - BlockerDivested OEM Orthopedics businessRemainder of OEM division will focus on expanding its leadership positions in custom extrusion, catheters, medical devices, sutures, and performance fibers 13 Full Year Strategic Highlights Delivered on commitments to investorsAchieved 6.8% constant currency revenue growth versus initial outlook of 4% to 6%Delivered adjusted EPS at upper-end of initially provided guidance range despite headwinds 14 15 FOURTH QUARTER 2012 FINANCIAL REVIEW 15 Fourth Quarter - Financial Results Revenue of $419.0 millionUp 4.0% as-reported; up 5.1% constant currencyGross margin of 47.5%Up 50 bps vs. prior yearResearch development spending up 26% from prior yearAdjusted operating margin of 15.6%Down 130 bps vs. prior yearAdjusted EPS of $1.14, up 9% vs. prior year 16 17 FOURTH QUARTER PRODUCT GEOGRAPHIC REVENUE REVIEW 17 Product Revenue Review Critical Care Surgical Care Cardiac Care OEM 0.68 0.18 0.05 0.09 Q4'12 Q4'11 Constant Currency Revenue Commentary Critical Care Surgical Care Cardiac Care OEM 0.67 0.18 0.05 0.1 Critical Care: $286.1 million, up 8.1% Surgical Care: $76.3 million, up 4.8%Anesthesia - up 35.7%Urology - up 2.2%Vascular access - up 1.0%Respiratory - down 4.7% Cardiac Care: $20.9 million, down 3.3% OEM: $35.7 million, down 7.4% Note: Increases and decreases in revenue referred to above are as compared to results for the fourth quarter of 2011. 18 Segment Revenue Review Americas EMEA Asia OEM 0.48 0.31 0.12 0.09 Q4'12 Q4'11 Constant Currency Revenue Commentary Americas EMEA Asia OEM 0.46 0.33 0.11 0.1 Americas: $200.1 million, up 8.1% EMEA: $132.7 million, up 2.3% Asia: $50.5 million, up 12.4% OEM: $35.7 million, down 7.4% Note: Increases and decreases in revenue referred to above are as compared to results for the fourth quarter of 2011. 19 20 2013 FINANCIAL OUTLOOK 20 2013 Financial Outlook Foreign exchange expected to negatively impact revenue by ~ 1% 21 2013 Financial Outlook Gross margin of between 50% to 51%Including impact of medical device tax, adjusted operating margin expected to be between 16.0% to 17.0%Medical device tax negatively impacts adjusted operating margin by ~ 1% Adjusted earnings per share expected to be between $4.70 to $4.90 22 23 QUESTION ANSWER 23 24 APPENDICES 24 Appendix A - Reconciliation of Product Constant Currency Revenue Growth Dollars in Millions 25 Appendix B - Reconciliation of Segment Constant Currency Revenue Growth Dollars in Millions 26 Appendix C - Reconciliation of Critical Care Product Constant Currency Revenue Growth Dollars in Millions 27 Appendix D - Fourth Quarter Income Statement from Continuing Operations Dollars in millions, except per share 28 Appendix E - Reconciliation of Product Constant Currency Revenue Growth Dollars in Millions 29 Appendix F - Reconciliation of Segment Constant Currency Revenue Growth Dollars in Millions 30 Appendix G - Reconciliation of Critical Care Product Constant Currency Revenue Growth Dollars in Millions 31 Appendix H - Year-to-Date Income Statement from Continuing Operations Dollars in millions, except per share 32 Appendix I - EPS Reconciliation from Continuing Operations 33 Appendix J - EPS Reconciliation from Continuing Operations 34 Appendix K - EPS Reconciliation from Continuing Operations 35 Appendix L - EPS Reconciliation from Continuing Operations 36 Appendix M - Reconciliation of 2013 Outlook Earnings per Share Guidance Low High Diluted earnings per share attributable to common shareholders $3.20 $3.40 Restructuring and impairment charges, net of tax $0.51 $0.51 Intangible amortization expense, net of tax $0.82 $0.82 Amortization of debt discount on convertible notes, net of tax $0.17 $0.17 Adjusted diluted earnings per share $4.70 $4.90 37 38 Appendix N - Reconciliation of Teleflex Selling, General and Administrative Expenses 39 Appendix O - Reconciliation of Teleflex Gross Profit
Adjusted operating income and margin exclude costs associated acquisitions, restructuring and impairment charges and (gain) loss on sale of businesses and assets. Reconciliation of these non-GAAP measures to the most comparable GAAP measures is contained within this presentation. The following slides reflect continuing operations. 4 5 FOURTH QUARTER AND FULL YEAR 2012 HIGHLIGHTS 5 Fourth Quarter Financial Highlights Revenue of $419.0 million, up 5.1% constant currencyGross margin of 47.5%, up 50 bps vs. prior yearAdjusted operating margins of 15.6%, down 130 bps vs. prior year Adjusted EPS of $1.14, up 9% vs. prior year 6 Completed acquisition of LMA International N.V. and affiliatesTransaction closed on October 23, 2012Q4 revenue and adjusted earnings per share contribution of $24.4 million and $0.09Integration activities running slightly ahead of schedule Fourth Quarter Strategic Highlights 7 Profitability improvement initiatives continuingAnnounced the transfer of the manufacturing of certain products from the United States, and Mexico, to the Czech RepublicAnnounced the closure of a distribution center in FranceCentralized North American Distribution Center fully functional; beginning the process to eliminate old distribution centers in the United States Fourth Quarter Strategic Highlights 8 Fourth Quarter Strategic Highlights Marketplace continues to accept pricing initiativesUp 126 bps versus prior yearSixth consecutive quarter of positive year-over-year pricingInvestment in research and development paying benefitsResearch Development spending of 3.9% of revenueNewly introduced products contribute 74 bps of revenue growthGained marketing clearances for new vascular access, anesthesia and surgical products 9 Full Year Financial Highlights Revenue of $1.55 billion, up 6.8% constant currencyGross margin of 48.2%, up 80 bps vs. prior yearAdjusted operating margins of 16.2%, down 10 bps vs. prior year Adjusted EPS of $4.40, up 15% vs. prior year 10 Full Year Strategic Highlights Price initiatives drove 124 bps of top-line growth in 2012Latin America up 366 bpsAsia Pacific up 276 bpsNorth America up 141 bpsEurope up 34 bpsInvested in product areas to drive future revenue growth and profitabilityResearch development spending up 16%Newly introduced products contribute 117 bps of revenue growth 11 Full Year Strategic Highlights Solidified foundation for future growth through GPO IDN agreements24 new agreements (9 GPO; 15 IDN)25 agreement renewals (17 GPO; 8 IDN)Began the process of facility rationalizationNorth American Distribution Center consolidationMount Holly, NJ manufacturing facility closureManufacturing transfer of certain products from the U.S.
Consistent with past practice, adjusted earnings per share has not been adjusted to exclude the benefit resulting from the forfeiture of equity awards. Constant currency revenue growth excludes the impact of translating the results of international subsidiaries at different currency exchange rates from period to period. Adjusted selling, general and administrative expenses and adjusted operating expenses exclude costs associated with severance payments and benefits to be provided to our former chief executive officer and acquisition costs.
Adjusted earnings per share excludes, depending on the period presented, the effect of charges associated with a goodwill impairment, our restructuring programs and asset impairments, losses and other charges related to acquisition costs, gain/loss on sale of businesses and assets, loss on extinguishment of debt in connection with refinancing transactions, costs associated with severance payments and benefits to be provided to our former chief executive officer, charges relating to a stock keeping unit reduction program, charges associated with the amortization of additional interest expense related to an interest rate swap terminated in 2011, intangible amortization expense, the amortization of debt discount on convertible notes and certain tax adjustments relating to the resolution of various tax matters relating to prior years.
These risks and uncertainties are addressed in our SEC filings, including our most recent Form 10-K. This presentation includes certain non-GAAP financial measures, which include revenue growth on a constant currency basis; adjusted operating income and margins; adjusted earnings per share; adjusted gross profit and margin; adjusted selling, general and administrative expenses; and adjusted operating expenses.