Full Press Release Details
TELEFLEX INCORPORATED
EARNINGS CONFERENCE CALL
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Chairman, President and CEO
Executive Vice President and CFO
Treasurer and Vice President of Investor Relations
Forward-Looking Statements/Additional Notes
presentation and our discussion contain forward-looking information and statements including, but not limited to, our expectations with respect to expected launch dates of new products; forecasted 2013 constant currency revenue growth; forecasted
2013 gross and adjusted operating margins; expected impact of the medical device tax on adjusted operating margin; forecasted 2013 adjusted earnings per share; and other matters which inherently involve risks and uncertainties which could cause
actual results to differ from those projected or implied in the forward looking statements. 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 gross profit and margin; adjusted operating income and margins; adjusted earnings per share; adjusted selling, general and administrative expenses; and adjusted operating expenses. Adjusted diluted earnings per share excludes, depending on
the period presented, (i) the effect of charges associated with our restructuring program, as well as goodwill and other asset impairment charges; (ii) the gain or loss on sales of businesses and assets; (iii) losses and other charges
related to acquisition costs, the reversal of a reserve associated with a previously announced stock keeping unit reduction program, and a litigation verdict against the Company with respect to a non-operating joint venture; (iv) the
amortization of the debt discount on the Company s convertible notes; (v) charges associated with the amortization of additional interest expense related to an interest rate swap terminated in 2011; (vi) intangible amortization
expense; and (vii) tax benefits resulting from the resolution of prior years tax matters and the filing of prior years amended tax returns. 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). The Company had decided to include the anti-dilutive impact of the convertible note hedge agreements because it believes it is useful for
investors to understand their economic effects. 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 income related to contingent consideration and costs associated with acquisitions. Adjusted operating income and margin exclude certain losses and other charges, 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.
SECOND QUARTER 2013 HIGHLIGHTS
Financial Highlights
Revenue of $420.1 million,
up 9.6% constant currency
Adjusted gross margin of 49.8%, up 170 bps vs. prior year
Adjusted operating margins of 17.0%, flat vs. prior year
Adjusted EPS of $1.27, up 3.3% vs. prior year
Strategic Highlights
Price initiatives drove 91
bps of top-line growth in Q2 2013 compared to Q2 2012
Latin America up 299 bps
North America up 116 bps
Asia Pacific down 14 bps
Eighth consecutive quarter of positive year-over-year pricing and sequential improvement from Q1 2013
Strategic Highlights
Continue to invest in
product areas to drive future revenue growth and profitability
Research & development spending up 30
bps, or 21%, compared to Q2 12
Newly introduced products contribute 132 bps of revenue growth compared to
Gained marketing clearances for new ARROW GPSCath balloon dilation catheters and
ARROW NextStep Retrograde femoral length dialysis catheters
Launched Rusch TruLite
laryngoscope system and ARROW VPS G4 vascular positioning system
Strategic Highlights
Balloon Dilation Catheter
Enables multiple vascular procedures to be performed with one dual-function catheter, potentially reducing procedure time
and expense for both patients and medical professionals
Combines angioplasty and proprietary VisioValve
injection system which enables physicians to perform high-pressure angioplasty and inject physician-specified fluids while maintaining guidewire position
Strategic Highlights
Retrograde Femoral Length Dialysis Catheters
Designed for clinician ease of insertion and to take better advantage of the blood flow dynamics within the heart through
its unique reversed port configuration resulting in reduced recirculation and high flow rates
Strategic Highlights
Disposable laryngoscope blade and handle system for single-patient use
System features LED lighting technology
Addresses clinician concerns regarding potential risk of patient cross-contamination and cost of maintaining reusable laryngoscopes
Strategic Highlights
(Vascular Positioning System)
Only system to use micro-doppler ultrasound technology in combination with intravascular ECG and advanced algorithms
Provides easy-to-follow symbols and improved sterile field capability
Wi-Fi access to enable integration with hospital data management systems
Strategic Highlights
LMA International N.V. and
Contributed revenue of approximately $32.5 million in Q2 2013
LMA integration and performance continues to be slightly ahead of initial expectations
Strategic Acquisition: Ultimate Medical
supplier and innovator of airway management devices, including a full-range of laryngeal mask airways
Developed the Cuff PilotTM, the world s first integrated cuff pressure indicator for airway management devices. This
novel technology allows clinicians to continuously assess cuff pressure which may reduce the risk of aspiration and tracheal injury.
Cuff PilotTM technology is currently used with Ultimate Medical s portfolio of laryngeal masks and has potential application for use with LMATM laryngeal masks
Strategic Acquisition: Eon Surgical
development company that has advanced a minimally invasive micro-laparoscopy surgical platform technology designed to enhance surgeons ability to perform scarless surgery while producing better patient outcomes
Developed the InterTipTM platform, a complete solution for performing scarless laparoscopic surgery, that unlike
single-port laparoscopy allows the surgeon to maintain the triangulation of standard laparoscopic surgery
Technology is applicable to the majority of all laparoscopic surgical procedures and allows Teleflex to expand its
offering for minimally invasive surgery
Telescoping Needle with Handle
Strategic Highlights
GPO & IDN relationships
6 new agreements (3 GPO; 3 IDN)
1 GPO agreement renewal
Profitability improvement and facility rationalization initiatives continue
Completed the North American Distribution Center consolidation program
Completed the integration of legacy Arrow ERP system to Teleflex SAP platform at the beginning of Q3 2013
SECOND QUARTER 2013 FINANCIAL REVIEW
Revenue of $420.1 million
Up 9.6% vs. prior year on an as-reported and constant currency basis
Adjusted gross margin of 49.8%
Up 170 bps vs. prior year
development spending up 21% from prior year
Adjusted operating margin of 17.0%
Adjusted EPS of $1.27
Up 3.3% vs. prior year
SECOND QUARTER PRODUCT & SEGMENT REVENUE REVIEW