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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q


(Mark One)
☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~September 27, 2020~~March 28, 2021


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to .

Commission file number 1-5353

TELEFLEX INCORPORATED

(Exact name of registrant as specified in its charter)


Delaware						23-1147939
(State or other jurisdiction of incorporation or organization)						(I.R.S. employer identification no.)

550 E. Swedesford Rd., Suite 400 Wayne, PA 19087

(Address of principal executive offices and zip code)

(610) 225-6800

(Registrant’s telephone number, including area code)

(None)

(Former Name, Former Address and Former Fiscal Year,

If Changed Since Last Report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, par value $1.00 per share

TFX

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The registrant had ~~46,566,715~~46,732,674 shares of common stock, par value $1.00 per share, outstanding as of ~~October~~April 27, ~~2020.~~2021.

TELEFLEX INCORPORATED

QUARTERLY REPORT ON FORM 10-Q

FOR THE QUARTER ENDED ~~SEPTEMBER 27, 2020~~MARCH 28, 2021

TABLE OF CONTENTS

Page

PART I — FINANCIAL INFORMATION

Item 1:

Financial Statements (Unaudited):

Condensed Consolidated Statements of Income

Condensed Consolidated Statements of Comprehensive Income

Condensed Consolidated Balance Sheets

Condensed Consolidated Statements of Cash Flows

Condensed Consolidated Statements of Changes in Equity

Notes to Condensed Consolidated Financial Statements

Item 2:

Management’s Discussion and Analysis of Financial Condition and Results of Operations

2117

Item 3:

Quantitative and Qualitative Disclosures About Market Risk

3124

Item 4:

Controls and Procedures

3124

PART II — OTHER INFORMATION

Item 1:

Item 1A:

Item 2:

Unregistered Sales of Equity Securities and Use of Proceeds

3325

Item 3:

Defaults Upon Senior Securities

3325

Item 4:

Mine Safety Disclosures

Item 5:

Item 6:

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

TELEFLEX INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)


		Three Months Ended				Nine Months Ended					Three Months Ended
		September 27, 2020		September 29, 2019		September 27, 2020		September 29, 2019			March 28, 2021		March 29, 2020
		(Dollars and shares in thousands, except per share)									(Dollars and shares in thousands, except per share)
Net revenues	Net revenues	$	628,301	$	648,319	$	1,825,977	$	1,914,410	Net revenues	$	633,925	$	630,642
Cost of goods sold	Cost of goods sold	298,977		293,244		884,657		883,127		Cost of goods sold	289,398		297,018
Gross profit	Gross profit	329,324		355,075		941,320		1,031,283		Gross profit	344,527		333,624
Selling, general and administrative expenses	Selling, general and administrative expenses	171,673		209,291		510,662		631,712		Selling, general and administrative expenses	203,148		147,796
Research and development expenses	Research and development expenses	29,218		27,984		85,978		82,729		Research and development expenses	29,947		27,396
Restructuring and impairment (credits) charges		(3,659)		1,268		16,692		20,348
Gain on sale of assets		0		(1,089)		0		(3,828)
Restructuring and impairment charges										Restructuring and impairment charges	7,998		1,346

Income from continuing operations before interest and taxes	Income from continuing operations before interest and taxes	132,092		117,621		327,988		300,322		Income from continuing operations before interest and taxes	103,434		157,086
Interest expense	Interest expense	16,652		19,545		47,773		62,995		Interest expense	16,798		15,439
Interest income	Interest income	(214)		(470)		(956)		(1,281)		Interest income	(659)		(579)

Income from continuing operations before taxes	Income from continuing operations before taxes	115,654		98,546		281,171		238,608		Income from continuing operations before taxes	87,295		142,226
(Benefit) taxes on income from continuing operations		(951)		(130,383)		21,971		(115,567)
Taxes on income from continuing operations										Taxes on income from continuing operations	12,428		11,074
Income from continuing operations	Income from continuing operations	116,605		228,929		259,200		354,175		Income from continuing operations	74,867		131,152
Operating loss from discontinued operations	Operating loss from discontinued operations	(29)		(9)		(11)		(1,291)		Operating loss from discontinued operations	(1)		(4)
Tax benefit on operating loss from discontinued operations	Tax benefit on operating loss from discontinued operations	(11)		(9)		(4)		(317)		Tax benefit on operating loss from discontinued operations	0		(2)
Loss from discontinued operations	Loss from discontinued operations	(18)		0		(7)		(974)		Loss from discontinued operations	(1)		(2)
Net income	Net income	$	116,587	$	228,929	$	259,193	$	353,201	Net income	$	74,866	$	131,150
Earnings per share:	Earnings per share:									Earnings per share:
Basic:	Basic:									Basic:
Income from continuing operations	Income from continuing operations	$	2.51	$	4.95	$	5.58	$	7.67	Income from continuing operations	$	1.60	$	2.83
Loss from discontinued operations	Loss from discontinued operations	0		0		0		(0.02)		Loss from discontinued operations	0		0
Net income	Net income	$	2.51	$	4.95	$	5.58	$	7.65	Net income	$	1.60	$	2.83
Diluted:	Diluted:									Diluted:
Income from continuing operations	Income from continuing operations	$	2.46	$	4.85	$	5.48	$	7.53	Income from continuing operations	$	1.58	$	2.78
Loss from discontinued operations	Loss from discontinued operations	0		0		0		(0.02)		Loss from discontinued operations	0		0
Net income	Net income	$	2.46	$	4.85	$	5.48	$	7.51	Net income	$	1.58	$	2.78
Weighted average common shares outstanding	Weighted average common shares outstanding									Weighted average common shares outstanding
Basic	Basic	46,530		46,248		46,451		46,156		Basic	46,698		46,382
Diluted	Diluted	47,333		47,176		47,269		47,051		Diluted	47,407		47,231

The accompanying notes are an integral part of the condensed consolidated financial statements.

TELEFLEX INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)


		Three Months Ended				Nine Months Ended					Three Months Ended
		September 27, 2020		September 29, 2019		September 27, 2020		September 29, 2019			March 28, 2021		March 29, 2020
		(Dollars in thousands)									(Dollars in thousands)
Net income	Net income	$	116,587	$	228,929	$	259,193	$	353,201	Net income	$	74,866	$	131,150
Other comprehensive income (loss), net of tax:	Other comprehensive income (loss), net of tax:									Other comprehensive income (loss), net of tax:
Foreign currency translation, net of tax of $6,957, $(7,045), $1,671, and $(8,804) for the three and nine month periods, respectively		20,632		(39,894)		20,087		(27,562)
Pension and other postretirement benefit plans adjustment, net of tax of $(303), $(494), $(1,229), and $(1,330) for the three and nine months periods, respectively		1,037		1,560		4,071		4,248
Derivatives qualifying as hedges, net of tax of $(184), $64, $252, and $146 for the three and nine months periods, respectively		1,454		(260)		(3,458)		(102)
Other comprehensive income (loss), net of tax:		23,123		(38,594)		20,700		(23,416)
Foreign currency translation, net of tax of $(598) and $(7,581)										Foreign currency translation, net of tax of $(598) and $(7,581)	(24,075)		(18,199)
Pension and other postretirement benefit plans adjustment, net of tax of $(513) and $(522)										Pension and other postretirement benefit plans adjustment, net of tax of $(513) and $(522)	1,611		1,689
Derivatives qualifying as hedges, net of tax of $33 and $372										Derivatives qualifying as hedges, net of tax of $33 and $372	27		(3,817)
Other comprehensive loss, net of tax:										Other comprehensive loss, net of tax:	(22,437)		(20,327)
Comprehensive income	Comprehensive income	$	139,710	$	190,335	$	279,893	$	329,785	Comprehensive income	$	52,429	$	110,823

The accompanying notes are an integral part of the condensed consolidated financial statements.

TELEFLEX INCORPORATED

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)


		September 27, 2020		December 31, 2019			March 28, 2021		December 31, 2020
		(Dollars in thousands)					(Dollars in thousands)
ASSETS	ASSETS					ASSETS
Current assets	Current assets					Current assets
Cash and cash equivalents	Cash and cash equivalents	$	347,480	$	301,083	Cash and cash equivalents	$	324,631	$	375,880
Accounts receivable, net	Accounts receivable, net	390,476		418,673		Accounts receivable, net	401,112		395,071
Inventories	Inventories	526,125		476,557		Inventories	512,284		513,196
Prepaid expenses and other current assets	Prepaid expenses and other current assets	101,452		97,943		Prepaid expenses and other current assets	121,877		115,436
Prepaid taxes	Prepaid taxes	55,028		12,076		Prepaid taxes	18,879		22,842

Total current assets	Total current assets	1,420,561		1,306,332		Total current assets	1,378,783		1,422,425
Property, plant and equipment, net	Property, plant and equipment, net	445,242		430,719		Property, plant and equipment, net	467,648		473,912
Operating lease assets	Operating lease assets	102,924		113,160		Operating lease assets	94,554		100,635
Goodwill	Goodwill	2,363,837		2,245,305		Goodwill	2,565,874		2,585,966
Intangible assets, net	Intangible assets, net	2,228,930		2,156,285		Intangible assets, net	2,470,244		2,519,746
Deferred tax assets	Deferred tax assets	4,915		5,572		Deferred tax assets	8,045		8,073
Other assets	Other assets	46,879		52,447		Other assets	42,875		41,802
Total assets	Total assets	$	6,613,288	$	6,309,820	Total assets	$	7,028,023	$	7,152,559
LIABILITIES AND EQUITY	LIABILITIES AND EQUITY					LIABILITIES AND EQUITY
Current liabilities	Current liabilities					Current liabilities
Current borrowings	Current borrowings	$	91,750	$	50,000	Current borrowings	$	83,750	$	100,500
Accounts payable	Accounts payable	96,917		102,916		Accounts payable	101,340		102,520
Accrued expenses	Accrued expenses	117,493		100,466		Accrued expenses	134,311		136,276
Current portion of contingent consideration		4,744		148,090

Payroll and benefit-related liabilities	Payroll and benefit-related liabilities	98,828		115,981		Payroll and benefit-related liabilities	100,380		122,366
Accrued interest	Accrued interest	22,547		5,514		Accrued interest	23,401		7,135
Income taxes payable	Income taxes payable	10,873		6,692		Income taxes payable	14,831		17,361
Other current liabilities	Other current liabilities	32,095		33,396		Other current liabilities	50,040		53,869

Total current liabilities	Total current liabilities	475,247		563,055		Total current liabilities	508,053		540,027
Long-term borrowings	Long-term borrowings	2,035,823		1,858,943		Long-term borrowings	2,295,436		2,377,888
Deferred tax liabilities	Deferred tax liabilities	486,350		439,558		Deferred tax liabilities	482,484		484,678
Pension and postretirement benefit liabilities	Pension and postretirement benefit liabilities	55,795		82,719		Pension and postretirement benefit liabilities	57,118		74,499
Noncurrent liability for uncertain tax positions	Noncurrent liability for uncertain tax positions	12,562		10,294		Noncurrent liability for uncertain tax positions	9,987		10,127
Noncurrent contingent consideration		16,872		71,818

Noncurrent operating lease liabilities	Noncurrent operating lease liabilities	91,379		101,372		Noncurrent operating lease liabilities	79,403		86,097
Other liabilities	Other liabilities	203,057		202,741		Other liabilities	219,751		242,786
Total liabilities	Total liabilities	3,377,085		3,330,500		Total liabilities	3,652,232		3,816,102
Commitments and contingencies	Commitments and contingencies					Commitments and contingencies	0		0
Total shareholders' equity	Total shareholders' equity	3,236,203		2,979,320		Total shareholders' equity	3,375,791		3,336,457
Total liabilities and shareholders' equity	Total liabilities and shareholders' equity	$	6,613,288	$	6,309,820	Total liabilities and shareholders' equity	$	7,028,023	$	7,152,559

The accompanying notes are an integral part of the condensed consolidated financial statements.

TELEFLEX INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


		Nine Months Ended					Three Months Ended
		September 27, 2020		September 29, 2019			March 28, 2021		March 29, 2020
		(Dollars in thousands)					(Dollars in thousands)
Cash flows from operating activities of continuing operations:	Cash flows from operating activities of continuing operations:					Cash flows from operating activities of continuing operations:
Net income	Net income	$	259,193	$	353,201	Net income	$	74,866	$	131,150
Adjustments to reconcile net income to net cash provided by operating activities:	Adjustments to reconcile net income to net cash provided by operating activities:					Adjustments to reconcile net income to net cash provided by operating activities:
Loss from discontinued operations	Loss from discontinued operations	7		974		Loss from discontinued operations	1		2
Depreciation expense	Depreciation expense	51,329		47,286		Depreciation expense	17,513		16,842
Intangible asset amortization expense	Intangible asset amortization expense	118,649		112,661		Intangible asset amortization expense	41,922		38,911
Deferred financing costs and debt discount amortization expense	Deferred financing costs and debt discount amortization expense	3,191		3,313		Deferred financing costs and debt discount amortization expense	1,210		945
Gain on sale of assets		0		(3,828)

Fair value step up of acquired inventory sold	Fair value step up of acquired inventory sold	1,707		0		Fair value step up of acquired inventory sold	3,993		1,707
Changes in contingent consideration	Changes in contingent consideration	(54,585)		40,894		Changes in contingent consideration	6,354		(46,502)
Impairment of long-lived assets		0		6,911

Stock-based compensation	Stock-based compensation	14,759		20,037		Stock-based compensation	5,344		3,522
Deferred income taxes, net	Deferred income taxes, net	2,600		(140,963)		Deferred income taxes, net	425		679
Payments for contingent consideration	Payments for contingent consideration	(79,771)		(26,092)		Payments for contingent consideration	0		(79,771)
Interest benefit on swaps designated as net investment hedges	Interest benefit on swaps designated as net investment hedges	(14,488)		(13,820)		Interest benefit on swaps designated as net investment hedges	(4,647)		(4,874)
Other	Other	(15,703)		(7,142)		Other	(14,384)		(18,143)
Changes in assets and liabilities, net of effects of acquisitions and disposals:	Changes in assets and liabilities, net of effects of acquisitions and disposals:					Changes in assets and liabilities, net of effects of acquisitions and disposals:
Accounts receivable	Accounts receivable	35,546		(41,221)		Accounts receivable	(12,298)		(23,145)
Inventories	Inventories	(38,096)		(53,259)		Inventories	(10,074)		(12,346)
Prepaid expenses and other assets	Prepaid expenses and other assets	9,393		(13,184)		Prepaid expenses and other assets	3,342		6,403
Accounts payable, accrued expenses and other liabilities	Accounts payable, accrued expenses and other liabilities	(4,243)		31,631		Accounts payable, accrued expenses and other liabilities	(4,438)		(31,488)
Income taxes receivable and payable, net	Income taxes receivable and payable, net	(48,000)		(28,232)		Income taxes receivable and payable, net	1,665		4,651
Net cash provided by operating activities from continuing operations		241,488		289,167
Net cash provided by (used in) operating activities from continuing operations						Net cash provided by (used in) operating activities from continuing operations	110,794		(11,457)
Cash flows from investing activities of continuing operations:	Cash flows from investing activities of continuing operations:					Cash flows from investing activities of continuing operations:
Expenditures for property, plant and equipment	Expenditures for property, plant and equipment	(62,369)		(83,797)		Expenditures for property, plant and equipment	(19,276)		(19,684)
Proceeds from sale of assets	Proceeds from sale of assets	400		3,135		Proceeds from sale of assets	161		400
Payments for businesses and intangibles acquired, net of cash acquired	Payments for businesses and intangibles acquired, net of cash acquired	(266,843)		(1,265)		Payments for businesses and intangibles acquired, net of cash acquired	(1,762)		(265,160)
Net interest proceeds on swaps designated as net investment hedges		9,986		8,330

Net cash used in investing activities from continuing operations	Net cash used in investing activities from continuing operations	(318,826)		(73,597)		Net cash used in investing activities from continuing operations	(20,877)		(284,444)
Cash flows from financing activities of continuing operations:	Cash flows from financing activities of continuing operations:					Cash flows from financing activities of continuing operations:
Proceeds from new borrowings	Proceeds from new borrowings	1,013,807		25,000		Proceeds from new borrowings	0		485,000
Reduction in borrowings	Reduction in borrowings	(788,807)		(185,500)		Reduction in borrowings	(100,000)		0
Debt extinguishment, issuance and amendment fees	Debt extinguishment, issuance and amendment fees	(8,440)		(4,964)		Debt extinguishment, issuance and amendment fees	(22)		0
Net proceeds from share based compensation plans and the related tax impacts	Net proceeds from share based compensation plans and the related tax impacts	11,177		14,014		Net proceeds from share based compensation plans and the related tax impacts	(2,510)		(3,022)
Payments for contingent consideration	Payments for contingent consideration	(64,135)		(112,006)		Payments for contingent consideration	(13,071)		(60,881)
Dividends paid	Dividends paid	(47,384)		(47,071)		Dividends paid	(15,893)		(15,767)
Net cash provided by (used in) financing activities from continuing operations		116,218		(310,527)
Net cash (used in) provided by financing activities from continuing operations						Net cash (used in) provided by financing activities from continuing operations	(131,496)		405,330
Cash flows from discontinued operations:	Cash flows from discontinued operations:					Cash flows from discontinued operations:
Net cash (used in) provided by operating activities		(540)		2,651
Net cash (used in) provided by discontinued operations		(540)		2,651
Net cash used in operating activities						Net cash used in operating activities	(243)		(193)
Net cash used in discontinued operations						Net cash used in discontinued operations	(243)		(193)
Effect of exchange rate changes on cash and cash equivalents	Effect of exchange rate changes on cash and cash equivalents	8,057		(7,311)		Effect of exchange rate changes on cash and cash equivalents	(9,427)		(3,842)
Net increase (decrease) in cash and cash equivalents		46,397		(99,617)
Net (decrease) increase in cash and cash equivalents						Net (decrease) increase in cash and cash equivalents	(51,249)		105,394
Cash and cash equivalents at the beginning of the period	Cash and cash equivalents at the beginning of the period	301,083		357,161		Cash and cash equivalents at the beginning of the period	375,880		301,083
Cash and cash equivalents at the end of the period	Cash and cash equivalents at the end of the period	$	347,480	$	257,544	Cash and cash equivalents at the end of the period	$	324,631	$	406,477

The accompanying notes are an integral part of the condensed consolidated financial statements.

TELEFLEX INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(Unaudited)


		Common Stock			Additional Paid In Capital				Retained Earnings			Accumulated Other Comprehensive Loss		Treasury Stock					Total				Common Stock					Additional Paid In Capital				Retained Earnings			Accumulated Other Comprehensive Loss				Treasury Stock					Total
		Shares	Dollars								Shares			Dollars				Shares				Dollars									Shares							Dollars
		(Dollars and shares in thousands, except per share)																					(Dollars and shares in thousands, except per share)
Balance at December 31, 2019		47,536	$	47,536			$	616,980				$	2,824,916	$	(344,392)	1,182					$	(165,720)		$	2,979,320
Cumulative effect adjustment resulting from the adoption of new accounting standards									(791)										(791)
Balance at December 31, 2020																						Balance at December 31, 2020	47,812			$	47,812		$	652,305			$	3,096,228		$	(297,298)			1,132		$	(162,590)		$	3,336,457

Net income	Net income								131,150										131,150			Net income										74,866												74,866
Cash dividends ($0.34 per share)	Cash dividends ($0.34 per share)								(15,767)										(15,767)			Cash dividends ($0.34 per share)										(15,893)												(15,893)
Other comprehensive loss	Other comprehensive loss											(20,327)							(20,327)			Other comprehensive loss													(22,437)									(22,437)
Shares issued under compensation plans	Shares issued under compensation plans	24	24		(3,074)									(37)		1,748			(1,302)			Shares issued under compensation plans	18			18		1,993											(28)		99			2,110
Deferred compensation	Deferred compensation				383									(5)		358			741			Deferred compensation						447											(4)		241			688
Balance at March 29, 2020		47,560	47,560		614,289				2,939,508			(364,719)		1,140		(163,614)			3,073,024
Net income									11,456										11,456
Cash dividends ($0.34 per share)									(15,791)										(15,791)
Other comprehensive income												17,904							17,904
Shares issued under compensation plans		35	35		10,516									(3)		175			10,726
Deferred compensation					0									(1)		83			83
Balance at June 28, 2020		47,595	47,595		624,805				2,935,173			(346,815)		1,136		(163,356)			3,097,402
Net income									116,587										116,587
Cash dividends ($0.34 per share)									(15,826)										(15,826)
Other comprehensive income												23,123							23,123
Shares issued under compensation plans		102	102		14,671									(1)		13			14,786
Deferred compensation					(228)									—		359			131
Balance at September 27, 2020		47,697	$	47,697	$	639,248			$	3,035,934		$	(323,692)	1,135		$	(162,984)		$	3,236,203
Balance at March 28, 2021																						Balance at March 28, 2021	47,830			$	47,830	$	654,745			$	3,155,201		$	(319,735)			1,100		$	(162,250)		$	3,375,791


		Common Stock			Additional Paid In Capital			Retained Earnings			Accumulated Other Comprehensive Loss		Treasury Stock				Total			Common Stock					Additional Paid In Capital				Retained Earnings			Accumulated Other Comprehensive Loss				Treasury Stock					Total
		Shares	Dollars							Shares			Dollars			Shares			Dollars									Shares							Dollars
		(Dollars and shares in thousands, except per share)																		(Dollars and shares in thousands, except per share)
Balance at December 31, 2018		47,248	$	47,248		$	574,761				$	2,427,599	$	(341,085)	1,232			$	(168,545)		$	2,539,978
Balance at December 31, 2019																			Balance at December 31, 2019	47,536			$	47,536		$	616,980			$	2,824,916		$	(344,392)			1,182		$	(165,720)		$	2,979,320
Cumulative effect adjustment resulting from the adoption of new accounting standards	Cumulative effect adjustment resulting from the adoption of new accounting standards							(1,321)									(1,321)		Cumulative effect adjustment resulting from the adoption of new accounting standards										(791)												(791)
Net income	Net income							40,897									40,897		Net income										131,150												131,150
Cash dividends ($0.34 per share)	Cash dividends ($0.34 per share)							(15,650)									(15,650)		Cash dividends ($0.34 per share)										(15,767)												(15,767)
Other comprehensive income											396						396
Other comprehensive loss																			Other comprehensive loss													(20,327)									(20,327)
Shares issued under compensation plans	Shares issued under compensation plans	75	75		3,094								(40)		2,029		5,198		Shares issued under compensation plans	24			24		(3,074)											(37)		1,748			(1,302)
Deferred compensation	Deferred compensation				127								(4)		253		380		Deferred compensation						383											(5)		358			741
Balance at March 31, 2019		47,323	47,323		577,982			2,451,525			(340,689)		1,188		(166,263)		2,569,878
Net income								83,375									83,375
Cash dividends ($0.34 per share)								(15,697)									(15,697)
Other comprehensive income											14,782						14,782
Shares issued under compensation plans		77	77		12,252								(2)		177		12,506

Balance as of June 30, 2019		47,400	47,400		590,234			2,519,203			(325,907)		1,186		(166,086)		2,664,844
Net income								228,929									228,929
Cash dividends ($0.34 per share)								(15,724)									(15,724)
Other comprehensive income											(38,594)						(38,594)
Shares issued under compensation plans		63	63		13,400								(2)		58		13,521
Balance as of September 29, 2019		47,463	$	47,463	603,634			$	2,732,408		$	(364,501)	1,184		(166,028)		2,852,976
Balance at March 29, 2020																			Balance at March 29, 2020	47,560			$	47,560	$	614,289			$	2,939,508		$	(364,719)			1,140		$	(163,614)		$	3,073,024

The accompanying notes are an integral part of the condensed consolidated financial statements.

TELEFLEX INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(all tabular amounts in thousands unless otherwise noted)

Note 1 — Basis of presentation

The accompanying unaudited condensed consolidated financial statements of Teleflex Incorporated and its subsidiaries (“we,” “us,” “our" and “Teleflex”) are prepared on the same basis as its annual consolidated financial statements.

In the opinion of management, the financial statements reflect all adjustments, which are of a normal recurring nature, necessary for the fair statement of the financial statements for interim periods in accordance with accounting principles generally accepted in the United States of America ("GAAP") and Rule 10-01 of Securities and Exchange Commission ("SEC") Regulation S-X, which sets forth the instructions for the form and content of presentation of financial statements included in Form 10-Q. The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates particularly as it relates to estimates reliant on forecasts and other assumptions impacted by the COVID-19 pandemic, which are described in more detail in the "Risks and Uncertainties" section below.estimates. The results of operations for the periods reported are not necessarily indicative of those that may be expected for a full year.

In accordance with applicable accounting standards and as permitted by Rule 10-01 of Regulation S-X, the accompanying condensed consolidated financial statements do not include all of the information and footnote disclosures that are required to be included in our annual consolidated financial statements. Therefore, our quarterly condensed consolidated financial statements should be read in conjunction with our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2019. For the three and nine months ended September 27, 2020 intangible asset amortization expense of $21.2 million and $63.2 million, respectively, is included within costs of good sold. For the three and nine months ended September 29, 2019, we reclassified intangible asset amortization expense of $20.6 million and $62.1 million, respectively, from selling, general and administrative expenses to cost of goods sold for comparability.

~~Risks and Uncertainties~~

We are subject to risks and uncertainties as a result of the COVID-19 pandemic. The extent of the impact of the COVID-19 pandemic on our business is highly uncertain and difficult to predict due to the rapidly evolving environment and continued uncertainties created by the COVID-19 pandemic. Among other things, the response to the COVID-19 pandemic has had the effect of reducing the number of elective procedures being carried out by our customers, thereby reducing demand for products used in elective procedures, while creating an increase in demand for products used in the treatment of patients with COVID-19. The COVID-19 pandemic has significantly impacted economic activity and markets around the world through government-mandated and self-imposed shut-downs in many countries, which were implemented to protect individuals and control the spread of COVID-19. If the pandemic continues and conditions worsen, it could negatively impact our business, results of operations, financial condition and liquidity in numerous ways, including, but not limited to, lower revenues in our product categories dependent on elective procedures; further disruption in the manufacture of our products including increased manufacturing and distribution costs; extended delays in or defaults on payments of outstanding receivables; and increased volatility and pricing in capital markets. Further, the COVID-19 pandemic may cause disruption to our suppliers or their suppliers and/or the distribution of our products, whether through our direct sales force or our distributors.

The severity of the impact of the COVID-19 pandemic on our business will depend on a number of factors, including, but not limited to, the duration and severity of the pandemic and the extent and severity of the impact on our employees, contractors, suppliers, customers and other business partners, all of which are uncertain and cannot be predicted. As of the date of issuance of these condensed consolidated financial statements, the extent to which the COVID-19 pandemic may materially impact our financial condition, liquidity, or results of operations is uncertain.2020.

Note 2 — Recently issued accounting standards

In ~~June 2016~~, the Financial Accounting Standards Board ("FASB") issued new guidance that changes the methodology to be used to measure credit losses for certain financial instruments and financial assets, including trade receivables. The new guidance requires the recognition of an allowance that reflects the current estimate of

~~TELEFLEX INCORPORATED~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)~~

~~(Unaudited)~~

credit losses expected to be incurred over the life of the financial asset, based not only on historical experience and current conditions, but also on reasonable forecasts. The main objective of the new guidance is to provide financial statement users with more useful information in making decisions about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. Under previous guidance, an entity reflects credit losses on financial assets measured on an amortized cost basis only when it is probable that losses have been incurred, generally considering only past events and current conditions in determining the incurred loss. We adopted the new standard on January 1, 2020 using a modified retrospective transition approach by recognizing a cumulative-effect adjustment of $0.8 million to reduce our opening balance of retained earnings as of the adoption date. Prior period amounts have not been adjusted and continue to reflect our historical accounting.

In December 2019, the FASB issued new guidance that simplifies various aspects of accounting for income taxes including those related to the step-up in the tax basis of goodwill, intraperiod tax allocations and the interim period effects of changes in tax laws or rates. The new guidance is effective for fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. ~~Early adoption is permitted.~~ The ~~majority of the~~ modifications under the new guidance ~~will be~~were applied on a ~~modified retrospective~~prospective basis ~~through a cumulative-effect adjustment to retained earnings on~~effective January 1, 2021. ~~We are currently evaluating~~The adoption of the ~~impact~~new guidance did not have a material effect on the ~~guidance will have on our~~ consolidated financial ~~statements and related disclosures.~~

In March 2020, the SEC adopted final rules that amend the financial disclosure requirements for subsidiary issuers and guarantors of registered debt securities in Rule 3-10 of Regulation S-X. The SEC amended its financial disclosure requirements for companies that conduct registered debt offerings involving subsidiaries as either issuers or guarantors and affiliates whose securities are pledged as collateral. The SEC narrowed the circumstances that require separate financial statements of subsidiary issuers and guarantors and streamlined the alternative disclosures required in lieu of those statements. The SEC replaced the requirement for separate financial statements of affiliates whose securities are pledged as collateral for registered securities with requirements similar to those adopted for subsidiary issuers and guarantors. The new disclosures may be located, in all cases, outside of the financial statements. The rule is effective January 4, 2021, but earlier compliance is permitted. We adopted the new rule during the first quarter of 2020. The disclosures are now located within the Liquidity and Capital Resources section of Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations.

From time to time, new accounting guidance is issued by the FASB or other standard setting bodies that is adopted by us as of the effective date or, in some cases where early adoption is permitted, in advance of the effective date. We have assessed the recently issued guidance that is not yet effective and, unless otherwise indicated above, believes the new guidance will not have a material impact on the consolidated results of operations, cash flows or financial position.

Note 3 -— Net revenues

We primarily generate revenue from the sale of medical devices including single use disposable devices and, to a lesser extent, reusable devices, instruments and capital equipment. Revenue is recognized when obligations under the terms of a contract with our customer are satisfied; this occurs upon the transfer of control of the products. Generally, transfer of control to the customer occurs at the point in time when our products are shipped from the manufacturing or distribution facility. For our Original Equipment and Development Services ("OEM") segment, most revenue is recognized over time because the OEM segment generates revenue from the sale of custom products that have no alternative use and we have an enforceable right to payment to the extent that performance has been completed. We market and sell products through our direct sales force and distributors to customers within the following end markets: (1) hospitals and healthcare providers; (2) other medical device manufacturers; and (3) home care providers, ~~such as pharmacies,~~ which comprised ~~87%~~88%, ~~10%~~9% and 3% of consolidated net revenues, respectively, for the ~~nine~~three months ended ~~September 27, 2020.~~March 28, 2021. Revenue is measured as the amount of consideration we expect to receive in exchange for transferring goods. With respect to the custom products sold in the OEM segment, revenue is measured using the units produced output method. Payment is generally due 30 days from the date of invoice.

TELEFLEX INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

The following table disaggregates revenue by global product category for the three ~~and nine~~ months ended ~~September 27, 2020~~March 28, 2021 and ~~September~~March 29, ~~2019.~~2020.


		Three Months Ended				Nine Months Ended
		September 27, 2020		September 29, 2019		September 27, 2020		September 29, 2019			Three Months Ended
		(Dollars in thousands)									March 28, 2021		March 29, 2020
Vascular access	Vascular access	$	160,052	$	148,681	$	475,252	$	446,225	Vascular access	$	163,973	$	150,256
Anesthesia	Anesthesia	75,647		87,123		216,204		253,098		Anesthesia	84,857		75,702
Interventional	Interventional	93,187		106,883		275,704		314,852		Interventional	96,173		99,931
Surgical	Surgical	82,223		92,621		224,928		274,911		Surgical	80,386		75,432
Interventional urology	Interventional urology	81,773		73,629		196,114		201,312		Interventional urology	73,364		74,194
OEM	OEM	49,399		55,444		168,618		166,110		OEM	53,489		63,389
Other (1)	Other (1)	86,020		83,938		269,157		257,902		Other (1)	81,683		91,738
Net revenues (2)	Net revenues (2)	$	628,301	$	648,319	$	1,825,977	$	1,914,410	Net revenues (2)	$	633,925	$	630,642

(1)Includes revenues generated from sales of our respiratory and urology products (other than interventional urology products).

(2)The product categories listed above are presented on a global basis, while each of our reportable segments other than the OEM reportable segment are defined based on the geographic location of its operations; the OEM reportable segment operates globally. Each of the geographically based reportable segments include net revenues from each of the non-OEM product categories listed above.

Note 4 — Acquisitions

On February 18, 2020, we acquired IWG High Performance Conductors, Inc. ~~(HPC)~~("HPC"), a privately-held original equipment manufacturer of minimally invasive medical products and high performance ~~conductors, for $260.0 million.~~conductors. The acquisition ~~which~~ complements our OEM product ~~portfolio, was financed using borrowings~~portfolio.

On December 28, 2020, we acquired Z-Medica, LLC ("Z-Medica"), a privately-held medical device company that manufactures and sells hemostatic (hemorrhage control) products, marketed under the QuikClot, Combat Gauze and QuickClot Control+ brand names, to complement our ~~revolving credit facility. Based on the preliminary~~anesthesia product portfolio. The acquisition included an initial cash purchase price ~~allocation,~~of $500.0 million, with the ~~assets acquired principally consist~~potential to make an additional payment up to $25 million upon the achievement of customer relationships of $139.0 million, intellectual property of $40.0 million and goodwill of $107.1 million. The intangible assets are being amortized over a useful life of 20 years. Goodwill arising from the acquisition represents costs synergies, revenue growth attributable to anticipated increased market penetration from acquired products and future customers and is not tax deductible.certain commercial milestones.

Note 5 — Restructuring and impairment ~~(credits)~~ charges

~~2020 Workforce reduction~~2021 Restructuring plan

During the ~~second~~first quarter of ~~2020,~~2021, we committed to a ~~workforce reduction~~restructuring plan designed to ~~improve profitability and reduce cost primarily by streamlining certain sales and marketing~~streamline various business functions inacross our ~~EMEA segment and certain manufacturing operations in our OEM segment. The workforce reduction was initiated to further align the business with our high growth strategic objectives.~~segments. We estimate that we will incur aggregate pre-tax restructuring charges of ~~$10~~$7 million to ~~$13~~$9 million, consisting primarily of termination ~~benefits, all~~benefits. In addition, we expect to incur $3 million to $4 million in restructuring related charges, most of which ~~will result~~are expected to be recognized in ~~future cash outlays. This~~cost of goods sold. We expect this program will be substantially ~~complete during 2020 and as a result most of these charges are expected to be incurred prior to~~completed by the end of ~~2020.~~

2021. As of March 28, 2021, we had a restructuring reserve of $6.4 million related to this plan, all of which related to termination benefits.

TELEFLEX INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

Footprint realignment plans

We have ongoing restructuring programs primarily related to the relocation of manufacturing operations to existing lower-cost locations and related workforce reductions (referred to as the 2019, 2018 and 2014 Footprint realignment plans). The following tables provide a summary of our cost estimates and other information associated with these ongoing Footprint realignment plans:

2019 Footprint realignment plan (3)

2018 Footprint realignment plan

2014 Footprint realignment plan (4)

2019 Footprint realignment plan

2018 Footprint realignment plan

2014 Footprint realignment plan

Program expense estimates:

(Dollars in millions)

Program expense estimates:

(Dollars in millions)

Termination benefits

$16 to $20

$60 to $70

$12 to $13

Termination benefits

$16 to $18

$60 to $70

$13 to $13

Other costs (1)

2 to 2

2 to 4

1 to 2

Other costs (1)

2 to 2

3 to 4

1 to 2

Restructuring charges

18 to 22

62 to 74

13 to 15

Restructuring charges

18 to 20

63 to 74

14 to 15

Restructuring related charges (2)

40 to 45

40 to 59

38 to 40

Restructuring related charges (2)

38 to 43

40 to 59

38 to 40

Total restructuring and restructuring related charges

$58 to $67

$102 to $133

$51 to $55

Total restructuring and restructuring related charges

$56 to $63

$103 to $133

$52 to $55

Other program estimates:

Expected cash outlays

$55 to $63

$99 to $127

$42 to $46

Expected cash outlays

$50 to $57

$99 to $127

$42 to $46

Expected capital expenditures

$27 to $33

$19 to $23

$25 to $26

Expected capital expenditures

$28 to $33

$19 to $23

$26 to $27

Other program information:

Period initiated

February 2019

May 2018

April 2014

Period initiated

February 2019

May 2018

April 2014

Estimated period of substantial completion

2022

2022 (5)

2022

Estimated period of substantial completion

2022

Aggregate restructuring charges

$14.6

$59.1

$13.5

Aggregate restructuring charges

$15.7

$60.3

$13.6

Restructuring reserve:

Balance as of September 27, 2020

$7.9

$47.2

$3.7

Balance as of March 28, 2021

$7.0

$46.0

$3.3

Restructuring related charges incurred:

Three Months Ended September 27, 2020

$4.3

$3.3

$1.0

Nine Months Ended September 27, 2020

$10.7

$6.0

$2.7

Three Months Ended March 28, 2021

$3.6

$2.0

$0.7

Aggregate restructuring related charges

$17.3

$13.2

$35.0

Aggregate restructuring related charges

$24.7

$18.7

$36.7

(1)Includes facility closure, employee relocation, equipment relocation and outplacement costs.

(2)Restructuring related charges represent costs that are directly related to the programs and principally constitute costs to transfer manufacturing operations to the existing lower-cost locations, project management costs and accelerated depreciation. The 2018 Footprint realignment plan also includes a charge associated with our exit from the facilities that is expected to be imposed by the taxing authority in the affected jurisdiction. Excluding this tax charge, substantially all of the restructuring related charges are expected to be recognized within cost of goods sold.

~~(3)During the second quarter of 2020, we refined the disclosed ranges for the program expense and other program estimates in consideration of the progress made to date as well as the actions remaining.~~


Three Months Ended March 28, 2021
	Termination benefits		Other costs (1)		Total
2021 Restructuring plan	$	6,760	$	0	$	6,760
2019 Footprint realignment plan	341		105		446
2018 Footprint realignment plan	267		45		312
Other restructuring programs (2)	(166)		646		480
Restructuring charges	$	7,202	$	796	$	7,998

~~(4)~~During the second quarter of 2020, we delayed the timing of substantial completion from our prior estimate of 2021 due to an extension in the development and qualification timeline, identified during the second quarter of 2020, for a component to be included in certain of our kits sold by our anesthesia business in North America. The shift in timing also resulted in an increase in the total program cost estimate and related cash outlays and as a result, we increased the high end of the ranges by $3 million. With respect to capital expenditures, we have also refined the range.

~~(5)~~We accelerated the timing of substantial completion from our prior estimate of 2024 to take advantage of an opportunity we identified during the second quarter of 2020 to accelerate the recognition of estimated savings.

Three Months Ended September 27, 2020
Termination benefits
Other costs (1)
Total
(Dollars in thousands)
2020 Workforce reduction plan $ (471) $ 255 $ (216)
2019 Footprint realignment plan (785) 368 (417)
2018 Footprint realignment plan (3,006) 83 (2,923)
Other restructuring programs (2)
(151) 48 (103)
Restructuring (credits) charges $ (4,413) $ 754 $ (3,659)

~~TELEFLEX INCORPORATED~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)~~

~~(Unaudited)~~

Three Months Ended September 29, 2019
Termination benefits
Other costs (1)
Total
(Dollars in thousands)
2019 Footprint realignment plan $ 584 $ 38 $ 622
2018 Footprint realignment plan 315 74 389
Other restructuring programs (3)
7 250 257
Restructuring charges $ 906 $ 362 $ 1,268

Nine Months Ended September 27, 2020
Termination benefits
Other costs (1)
Total
(Dollars in thousands)
2020 Workforce reduction plan $ 10,093 $ 255 $ 10,348
2019 Footprint realignment plan 367 459 826
2018 Footprint realignment plan 4,853 216 5,069
Other restructuring programs (2)
(89) 538 449
Restructuring charges $ 15,224 $ 1,468 $ 16,692

Nine Months Ended September 29, 2019
Termination benefits
Other costs (1)
Total
(Dollars in thousands)
2019 Footprint realignment plan $ 13,100 $ 68 $ 13,168
2018 Footprint realignment plan (1,523) 782 (741)
Other restructuring programs (3)
195 815 1,010
Restructuring charges 11,772 1,665 13,437
Asset impairment charges 0 6,911 6,911
Restructuring and impairment charges $ 11,772 $ 8,576 $ 20,348


Three Months Ended March 29, 2020
	Termination benefits		Other costs (1)		Total
2019 Footprint realignment plan	$	829	$	9	$	838
2018 Footprint realignment plan	314		81		395
Other restructuring programs (2)	(107)		220		113
Restructuring charges	$	1,036	$	310	$	1,346

(1) Other costs include facility closure, contract termination and other exit costs.

(2) Includes the program initiated during third quarter of 2019 as well as the 2016 and 2014 Footprint realignment plans.

~~(3) Includes the program initiated during third quarter of 2019, the Vascular Solutions integration program (initiated in 2017) as well as the 2016 and 2014 Footprint realignment plans.~~

~~Note 6 — Inventories~~

~~Inventories as of September 27, 2020 and December 31, 2019 consisted of the following:~~

September 27, 2020 December 31, 2019
(Dollars in thousands)
Raw materials $ 135,059 $ 114,302
Work-in-process 73,375 71,479
Finished goods 317,691 290,776
Inventories $ 526,125 $ 476,557

119

TELEFLEX INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

Note 6 — Inventories

Inventories as of March 28, 2021 and December 31, 2020 consisted of the following:


	March 28, 2021		December 31, 2020
Raw materials	$	131,094	$	132,370
Work-in-process	76,267		75,874
Finished goods	304,923		304,952
Inventories	$	512,284	$	513,196

Note 7 — Goodwill and other intangible assets

The following table provides information relating to changes in the carrying amount of goodwill by reportable operating segment for the ~~nine~~three months ended ~~September 27, 2020:~~March 28, 2021:

Americas EMEA Asia OEM Total
(Dollars in thousands)
December 31, 2019 $ 1,550,925 $ 475,772 $ 213,725 $ 4,883 $ 2,245,305
Goodwill related to acquisitions 0 0 0 107,127 107,127
Currency translation adjustment (2,824) 12,636 1,593 0 11,405
September 27, 2020 $ 1,548,101 $ 488,408 $ 215,318 $ 112,010 $ 2,363,837


	Americas		EMEA		Asia		OEM		Total
December 31, 2020	$	1,700,282	$	536,228	$	237,446	$	112,010	$	2,585,966




Currency translation adjustment	(746)		(15,442)		(3,904)		0		(20,092)
March 28, 2021	$	1,699,536	$	520,786	$	233,542	$	112,010	$	2,565,874

The gross carrying amount of, and accumulated amortization relating to, intangible assets as of ~~September 27, 2020~~March 28, 2021 and December 31, ~~2019~~2020 were as follows:


		Gross Carrying Amount				Accumulated Amortization
		September 27, 2020		December 31, 2019		September 27, 2020		December 31, 2019			Gross Carrying Amount				Accumulated Amortization
		(Dollars in thousands)									March 28, 2021		December 31, 2020		March 28, 2021		December 31, 2020
Customer relationships	Customer relationships	$	1,169,307	$	1,021,852	$	(408,372)	$	(367,585)	Customer relationships	$	1,373,922	$	1,377,943	$	(439,068)	$	(425,692)
In-process research and development	In-process research and development	28,735		27,940		0		0		In-process research and development	28,969		29,627		—		—
Intellectual property	Intellectual property	1,394,676		1,351,990		(466,330)		(402,340)		Intellectual property	1,456,085		1,458,924		(500,282)		(479,612)
Distribution rights	Distribution rights	23,604		23,369		(19,829)		(18,859)		Distribution rights	23,673		23,866		(20,284)		(20,280)
Trade names	Trade names	566,532		563,315		(61,911)		(50,718)		Trade names	615,816		619,847		(69,533)		(65,955)
Non-compete agreements	Non-compete agreements	23,479		22,618		(20,961)		(15,297)		Non-compete agreements	23,789		24,592		(22,843)		(23,514)
		$	3,206,333	$	3,011,084	$	(977,403)	$	(854,799)		$	3,522,254	$	3,534,799	$	(1,052,010)	$	(1,015,053)

Note 8 ~~— Borrowings~~

~~Our borrowings at September 27, 2020 and December 31, 2019 were as follows:~~

September 27, 2020 December 31, 2019
(Dollars in thousands)
Senior Credit Facility:
Revolving credit facility, at a rate of 1.65% at September 27, 2020, due 2024 $ 0 $ 300,000
Term loan facility, at a rate of 1.65% at September 27, 2020, due 2024 673,000 673,000
4.875% Senior Notes due 2026 400,000 400,000
4.625% Senior Notes due 2027 500,000 500,000
4.25% Senior Notes due 2028 500,000 0
Securitization program, at a rate of 1.25% at September 27, 2020 75,000 50,000
2,148,000 1,923,000
Less: Unamortized debt issuance costs (20,427) (14,057)
2,127,573 1,908,943
Current borrowings (91,750) (50,000)
Long-term borrowings $ 2,035,823 $ 1,858,943

~~4.25% Senior Notes due 2028~~

On May 27, 2020, we issued $500.0 million of 4.25% Senior Notes due 2028 (the "2028 Notes"). We will pay interest on the 2028 Notes semi-annually on June 1 and December 1, commencing on December 1, 2020, at a rate of 4.25% per year. The 2028 Notes mature on June 1, 2028 unless earlier redeemed at our option, as described below, or purchased at the holder’s option under specified circumstances following a Change of Control or Event of

~~TELEFLEX INCORPORATED~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)~~

~~(Unaudited)~~

Default (each as defined in the indenture related to the 2028 Notes), coupled with a downgrade in the ratings of the 2028 Notes, or upon our election to exercise its optional redemption rights, as described below. We incurred transaction fees of $8.4 million, including underwriters’ discounts and commissions, in connection with the offering of the 2028 Notes, which were recorded on the consolidated balance sheet as a reduction to long-term borrowings and are being amortized over the term of the 2028 Notes. We used the net proceeds from the offering to repay borrowings under our revolving credit facility.

Our obligations under the 2028 Notes are fully and unconditionally guaranteed, jointly and severally, by each of our existing and future 100% owned domestic subsidiaries that is a guarantor or other obligor under the Credit Agreement and by certain of our other 100% owned domestic subsidiaries.

At any time on or after June 1, 2023, we may, on one or more occasions, redeem some or all of the 2028 Notes at a redemption price of 102.125% of the principal amount of the 2028 Notes subject to redemption, declining, in annual increments of 1.0625%, to 100% of the principal amount on June 1, 2025, plus accrued and unpaid interest. In addition, at any time prior to June 1, 2023, we may, on one or more occasions, redeem some or all of the 2028 Notes at a redemption price equal to 100% of the principal amount of the 2028 Notes redeemed, plus a “make-whole” premium and any accrued and unpaid interest. The “make-whole” premium is the greater of (a) 1.0% of the principal amount of the 2028 Notes subject to redemption or (b) the excess, if any, over the principal amount of the 2028 Notes, of the present value, on the redemption date, of the sum of (i) the June 1, 2023, optional redemption price plus (ii) all required interest payments on the 2028 Notes through June 1, 2023, (other than accrued and unpaid interest to the redemption date), generally computed using a discount rate equal to the yield to maturity of U.S. Treasury securities with a constant maturity for the period most nearly equal to the period from the redemption date to June 1, 2023 (unless the period is less than one year, in which case the weekly average yield on traded U.S. Treasury securities adjusted to a constant maturity of one year will be used), plus 50 basis points.

In addition, at any time prior to June 1, 2023, we may, on one or more occasions, redeem up to 40% of the aggregate principal amount of the 2028 Notes, using the proceeds of specified types of our equity offerings and subject to specified conditions, at a redemption price equal to 104.25% of the principal amount of the Notes redeemed, plus accrued and unpaid interest.

The indenture relating to the 2028 Notes contains covenants that, among other things, limit or restrict our ability, and the ability of our subsidiaries, to create liens; merge, consolidate, sell or otherwise dispose of all or substantially all of our assets; and enter into sale leaseback transactions.

~~Securitization program~~

~~On March 30, 2020, we amended our accounts receivable securitization facility to increase the maximum available capacity from $50 million to $75 million.~~

~~Note 9~~ — Financial instruments

Foreign currency forward contracts

We use derivative instruments for risk management purposes. Foreign currency forward contracts designated as cash flow hedges are used to manage foreign currency transaction exposure. Foreign currency forward contracts not designated as hedges for accounting purposes are used to manage exposure related to near term foreign currency denominated monetary assets and liabilities. We enter into the non-designated foreign currency forward contracts for periods consistent with our currency translation exposures, which generally approximate one month. For the three ~~and nine~~ months ended ~~September 27, 2020~~March 28, 2021 we recognized a loss of ~~$0.9~~$3.2 million ~~and $0.1 million, respectively,~~ related to non-designated foreign currency forward contracts. For the three ~~and nine~~ months ended ~~September~~March 29, ~~2019~~2020 we recognized ~~losses~~a gain of ~~$1.9~~$1.6 million ~~and $3.5 million, respectively,~~ related to non-designated foreign currency forward contracts.

The total notional amount for all open foreign currency forward contracts designated as cash flow hedges as of ~~September 27, 2020~~March 28, 2021 and December 31, ~~2019~~2020 was ~~$136.9~~$131.2 million and ~~$132.0~~$129.5 million, respectively. The total notional amount for all open non-designated foreign currency forward contracts as of ~~September 27,~~March 28, 2021 and December 31, 2020 was $191.3 million and $163.5 million, respectively. All open foreign currency forward contracts as of March 28, 2021 have durations of 12 months or less.

1310

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

~~December 31, 2019 was $166.2 million and $145.1 million, respectively. All open foreign currency forward contracts as of September 27, 2020 have durations of 12 months or less.~~

Cross-currency interest rate swaps

During 2019, we entered into cross-currency swap agreements with 5 different financial institution counterparties to hedge against the effect of variability in the U.S. dollar to euro exchange rate. Under the terms of the cross-currency swap agreements, we have notionally exchanged $250 million at an annual interest rate of 4.875% for €219.2 million at an annual interest rate of 2.4595%. The swap agreements are designed as net investment hedges and expire on March 4, 2024.

During 2018, we entered into cross-currency swap agreements with 6 different financial institution counterparties to hedge against the effect of variability in the U.S. dollar to euro exchange rate. Under the terms of the cross-currency swap agreements, we have notionally exchanged $500 million at an annual interest rate of 4.625% for €433.9 million at an annual interest rate of 1.942%. The swap agreements are designed as net investment hedges and expire on October 4, 2023.

The swap agreements described above require an exchange of the notional amounts upon expiration or earlier termination of the agreements. We and the counterparties have agreed to effect the exchange through a net settlement.

The cross-currency swaps are marked to market at each reporting date and any changes in fair value are recognized as a component of accumulated other comprehensive income (loss) ("AOCI"). For the three ~~and nine~~ months ended ~~September 27,~~March 28, 2021 and March 29, 2020, we recognized foreign exchange ~~losses~~gains of ~~$23.2~~$17.6 million and ~~$5.6~~$25.0 million, respectively, within AOCI related to the cross-currency swaps. For the three ~~and nine~~ months ended ~~September~~March 28, 2021 and March 29, ~~2019, we recognized foreign exchange gains of $23.5 million and $29.4 million, respectively, within AOCI related to the cross-currency swaps. For the three and nine months ended September 27,~~ 2020, we recognized ~~$4.7~~$4.6 million and ~~$14.5 million, respectively, in interest benefit related to the cross-currency swaps. For the three and nine months ended September 29, 2019, we recognized $5.0 million and $13.8~~$4.9 million, respectively, in interest benefit related to the cross-currency swaps.

Balance sheet presentation

The following table presents the locations in the condensed consolidated balance sheet and fair value of derivative financial instruments as of ~~September 27, 2020~~March 28, 2021 and December 31, ~~2019:~~2020:


		September 27, 2020			December 31, 2019
				March 28, 2021				December 31, 2020
		(Dollars in thousands)
Asset derivatives:	Asset derivatives:						Asset derivatives:
Designated foreign currency forward contracts	Designated foreign currency forward contracts	$	916		$	1,659	Designated foreign currency forward contracts	$	1,098	$	1,691
Non-designated foreign currency forward contracts	Non-designated foreign currency forward contracts	81			192		Non-designated foreign currency forward contracts	212		61
Cross-currency interest rate swaps	Cross-currency interest rate swaps	25,796			21,575		Cross-currency interest rate swaps	25,575		20,106
Prepaid expenses and other current assets	Prepaid expenses and other current assets	26,793			23,426		Prepaid expenses and other current assets	26,885		21,858
Cross-currency interest rate swaps		6,113			13,066
Other assets		6,113			13,066

Total asset derivatives	Total asset derivatives	$	32,906		$	36,492	Total asset derivatives	$	26,885	$	21,858
Liability derivatives:	Liability derivatives:						Liability derivatives:
Designated foreign currency forward contracts	Designated foreign currency forward contracts	$	2,449		$	1,285	Designated foreign currency forward contracts	$	1,706	$	1,504
Non-designated foreign currency forward contracts	Non-designated foreign currency forward contracts	223			102		Non-designated foreign currency forward contracts	216		366
Other current liabilities	Other current liabilities	2,672			1,387		Other current liabilities	1,922		1,870

Cross-currency interest rate swaps							Cross-currency interest rate swaps	12,054		34,125
Other liabilities							Other liabilities	12,054		34,125
Total liability derivatives	Total liability derivatives	$	2,672		$	1,387	Total liability derivatives	$	13,976	$	35,995

See Note 1110 for information on the location and amount of gains and losses attributable to derivatives that were reclassified from AOCI to expense (income), net of tax.

There was 0 ineffectiveness related to our cash flow hedges during the three months ended March 28, 2021 and March 29, 2020.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

~~There was 0 ineffectiveness related to our cash flow hedges during the three and nine months ended September 27, 2020 and September 29, 2019.~~

Trade receivables

In the ordinary course of business, we grant non-interest bearing trade credit to our customers on normal credit terms. In an effort to reduce our credit risk, we (i) establish credit limits for all of our customer relationships, (ii) perform ongoing credit evaluations of our customers’ financial condition, (iii) monitor the payment history and aging of our customers’ receivables, and (iv) monitor open orders against an individual customer’s outstanding receivable balance.

Our allowance for credit losses is maintained for trade accounts receivable based on the expected collectability of accounts receivable, after considering our historical collection experience, the length of time an account is outstanding, the financial position of the customer, information provided by credit rating services in addition to new requirements under the accounting guidance, effective January 1, 2020, that includes the consideration of events or circumstances indicating historic collection rates may not be indicative of future collectability, for example, potential customer liquidity concerns resulting from COVID-19, that may impact the collectability of our receivables as well as our estimate of credit losses expected to be incurred over the life of our receivables. To date, we have not experienced significant payment defaults by, or identified other significant collectability concerns with, our customers. The assumptions utilized in our current estimates may change due to changes in circumstances, additional future developments and the resolution of other contingencies.

The allowance for credit losses as of ~~September 27, 2020~~March 28, 2021 and December 31, ~~2019~~2020 was ~~$12.9~~$12.0 million and ~~$9.1~~$12.9 million, respectively. The current portion of the allowance for credit losses, which was ~~$8.4~~$7.4 million and ~~$5.3~~$8.1 million as of ~~September 27, 2020~~March 28, 2021 and December 31, ~~2019,~~2020, respectively, was recognized as a reduction of accounts receivable, net.

Note 109 — Fair value measurement

The following tables provide information regarding our financial assets and liabilities measured at fair value on a recurring basis as of ~~September 27, 2020~~March 28, 2021 and December 31, ~~2019:~~2020:


		Total carrying value at September 27, 2020		Quoted prices in active markets (Level 1)		Significant other observable Inputs (Level 2)		Significant unobservable Inputs (Level 3)
		(Dollars in thousands)									Total carrying value at March 28, 2021		Quoted prices in active markets (Level 1)		Significant other observable Inputs (Level 2)		Significant unobservable Inputs (Level 3)
Investments in marketable securities	Investments in marketable securities	$	11,155	$	11,155	$	0	$	0	Investments in marketable securities	$	13,357	$	13,357	$	0	$	0
Derivative assets	Derivative assets	32,906		0		32,906		0		Derivative assets	26,885		0		26,885		0
Derivative liabilities	Derivative liabilities	2,672		0		2,672		0		Derivative liabilities	13,976		0		13,976		0
Contingent consideration liabilities	Contingent consideration liabilities	21,616		0		0		21,616		Contingent consideration liabilities	29,763		0		0		29,763

Total carrying
value at December 31, 2019 Quoted prices in active
markets (Level 1) Significant other
observable
Inputs (Level 2) Significant
unobservable
Inputs (Level 3)
(Dollars in thousands)
Investments in marketable securities $ 10,926 $ 10,926 $ 0 $ 0
Derivative assets 36,492 0 36,492 0
Derivative liabilities 1,387 0 1,387 0
Contingent consideration liabilities 219,908 0 0 219,908

~~TELEFLEX INCORPORATED~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)~~

~~(Unaudited)~~


	Total carrying value at December 31, 2020		Quoted prices in active markets (Level 1)		Significant other observable Inputs (Level 2)		Significant unobservable Inputs (Level 3)
Investments in marketable securities	$	12,617	$	12,617	$	0	$	0
Derivative assets	21,858		0		21,858		0
Derivative liabilities	35,995		0		35,995		0
Contingent consideration liabilities	36,633		0		0		36,633

Valuation Techniques

Our financial assets valued based upon Level 1 inputs are comprised of investments in marketable securities held in trust, which are available to satisfy benefit obligations under our benefit plans and other arrangements. The investment assets of the trust are valued using quoted market prices.

Our financial assets and liabilities valued based upon Level 2 inputs are comprised of foreign currency forward contracts and cross-currency interest rate swap agreements. We use foreign currency forwards and cross-currency interest rate swaps to manage foreign currency transaction exposure, as well as exposure to foreign currency denominated monetary assets and liabilities. We measure the fair value of the foreign currency forwards and cross-currency swaps by calculating the amount required to enter into offsetting contracts with similar remaining maturities, based on quoted market prices, and taking into account the creditworthiness of the counterparties.

Our financial liabilities valued based upon Level 3 inputs (inputs that are not observable in the market) are comprised of contingent consideration arrangements pertaining to our acquisitions, which are discussed immediately below.

Contingent consideration

Contingent consideration liabilities, which primarily consist of payment obligations that are contingent upon the achievement of revenue-based goals, but also can be based on other milestones such as regulatory approvals, are remeasured to fair value each reporting period using assumptions including estimated revenues (based on internal operational budgets and long-range strategic plans), discount rates, probability of payment and projected payment dates.

We determine the fair value of the contingent consideration liabilities using a Monte Carlo simulation (which involves a simulation of future revenues during the earn-out period using management's best estimates) or discounted cash flow analysis. Increases in projected revenues, estimated cash flows and probabilities of payment may result in significantly higher fair value measurements; decreases in these items may have the opposite effect. Increases in the discount rates in periods prior to payment may result in significantly lower fair value measurements and decreases in the discount rates may have the opposite effect.

TELEFLEX INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

The table below provides additional information regarding the valuation technique and inputs used in determining the fair value of contingent consideration.

Contingent Consideration Liability

Valuation Technique

Unobservable Input

Range (Weighted average)

Milestone-based payments

Discounted cash flow

Discount rate

1.2% - 2.5% ~~- 3.3% (3.0%~~(1.5%)

Projected year of payment

~~2020~~2021 - 2023

Revenue-based payments

~~Monte Carlo simulation~~

~~Revenue volatility~~

~~22.0%~~

~~Risk free rate~~

~~Cost of debt structure~~

~~Projected year of payment~~

~~2021 - 2022~~

Discounted cash flow

Discount rate

~~2.2%~~1.6% - 10.0% ~~(8.9%~~(3.2%)

Projected year of payment

~~2020~~2021 - 2029

~~TELEFLEX INCORPORATED~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)~~

~~(Unaudited)~~

The following table provides information regarding changes in the contingent consideration liabilities during the ~~nine~~three months ended ~~September 27, 2020:~~March 28, 2021:


	Contingent consideration

	~~(Dollars in thousands)~~
Balance - December 31, ~~2019~~2020	$	~~219,908~~36,633

Payments~~(1)~~	~~(143,906)~~(13,071)
Revaluations ~~(2)~~	~~(54,585)~~6,354
Translation adjustment	~~199~~ (153)
Balance - ~~September 27, 2020~~March 28, 2021	$	~~21,616~~29,763

(1) Consists mainly of a $140.6 million payment associated with our acquisition of NeoTract, Inc. resulting from the achievement of a revenue-based goal for the period from January 1, 2019 to December 31, 2019.

~~(2) The decrease, which is included within selling, general and administrative expenses, is mainly due to adverse financial projections resulting from the COVID-19 pandemic.~~

Note 1110 — Shareholders’ equity

Basic earnings per share is computed by dividing net income by the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed in the same manner except that the weighted average number of shares is increased to include dilutive securities. The following table provides a reconciliation of basic to diluted weighted average number of common shares outstanding:


		Three Months Ended		Nine Months Ended
		September 27, 2020	September 29, 2019	September 27, 2020	September 29, 2019		Three Months Ended
		(Shares in thousands)					March 28, 2021	March 29, 2020
Basic	Basic	46,530	46,248	46,451	46,156	Basic	46,698	46,382
Dilutive effect of share-based awards	Dilutive effect of share-based awards	803	928	818	895	Dilutive effect of share-based awards	709	849

Diluted	Diluted	47,333	47,176	47,269	47,051	Diluted	47,407	47,231

The weighted average number of shares that were antidilutive and therefore excluded from the calculation of earnings per share were 0.1 million the three ~~and nine~~ months ended ~~September 27, 2020~~March 28, 2021 and ~~September~~March 29, ~~2019.~~2020.

The following tables provide information relating to the changes in accumulated other comprehensive loss, net of tax, for the ~~nine~~three months ended ~~September 27, 2020~~March 28, 2021 and ~~September~~March 29, ~~2019:~~2020:


		Cash Flow Hedges		Pension and Other Postretirement Benefit Plans		Foreign Currency Translation Adjustment		Accumulated Other Comprehensive (Loss) Income			Cash Flow Hedges		Pension and Other Postretirement Benefit Plans		Foreign Currency Translation Adjustment		Accumulated Other Comprehensive (Loss) Income
		(Dollars in thousands)
Balance as of December 31, 2019		$	735	$	(138,810)	$	(206,317)	$	(344,392)
Balance as of December 31, 2020										Balance as of December 31, 2020	$	(482)	$	(150,257)	$	(146,559)	$	(297,298)
Other comprehensive (loss) income before reclassifications	Other comprehensive (loss) income before reclassifications	(4,479)		(109)		20,087		15,499		Other comprehensive (loss) income before reclassifications	(811)		161		(24,075)		(24,725)
Amounts reclassified from accumulated other comprehensive income	Amounts reclassified from accumulated other comprehensive income	1,021		4,180		0		5,201		Amounts reclassified from accumulated other comprehensive income	838		1,450		0		2,288
Net current-period other comprehensive (loss) income	Net current-period other comprehensive (loss) income	(3,458)		4,071		20,087		20,700		Net current-period other comprehensive (loss) income	27		1,611		(24,075)		(22,437)

Balance as of September 27, 2020		$	(2,723)	$	(134,739)	$	(186,230)	$	(323,692)
Balance as of March 28, 2021										Balance as of March 28, 2021	$	(455)	$	(148,646)	$	(170,634)	$	(319,735)

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)


		Cash Flow Hedges		Pension and Other Postretirement Benefit Plans		Foreign Currency Translation Adjustment		Accumulated Other Comprehensive (Loss) Income			Cash Flow Hedges		Pension and Other Postretirement Benefit Plans		Foreign Currency Translation Adjustment		Accumulated Other Comprehensive (Loss) Income
		(Dollars in thousands)
Balance as of December 31, 2018		$	807	$	(131,380)	$	(210,512)	$	(341,085)
Balance as of December 31, 2019										Balance as of December 31, 2019	$	735	$	(138,810)	$	(206,317)	$	(344,392)
Other comprehensive income (loss) before reclassifications	Other comprehensive income (loss) before reclassifications	646		215		(27,562)		(26,701)		Other comprehensive income (loss) before reclassifications	(3,760)		263		(18,199)		(21,696)
Amounts reclassified from accumulated other comprehensive loss	Amounts reclassified from accumulated other comprehensive loss	(748)		4,033		0		3,285		Amounts reclassified from accumulated other comprehensive loss	(57)		1,426		0		1,369
Net current-period other comprehensive income	Net current-period other comprehensive income	(102)		4,248		(27,562)		(23,416)		Net current-period other comprehensive income	(3,817)		1,689		(18,199)		(20,327)

Balance as of September 29, 2019		$	705	$	(127,132)	$	(238,074)	$	(364,501)
Balance as of March 29, 2020										Balance as of March 29, 2020	$	(3,082)	$	(137,121)	$	(224,516)	$	(364,719)

The following table provides information relating to the location in the statements of operations and amount of reclassifications of losses/(gains) in accumulated other comprehensive (loss) income into expense/(income), net of tax, for the three ~~and nine~~ months ended ~~September 27, 2020~~March 28, 2021 and ~~September~~March 29, ~~2019:~~2020:


		Three Months Ended				Nine Months Ended					Three Months Ended
		September 27, 2020		September 29, 2019		September 27, 2020		September 29, 2019			March 28, 2021		March 29, 2020
		(Dollars in thousands)
(Gains) losses on foreign exchange contracts:
Losses (gains) on foreign exchange contracts:										Losses (gains) on foreign exchange contracts:
Cost of goods sold	Cost of goods sold	$	1,899	$	(523)	$	1,148	$	(888)	Cost of goods sold	$	846	$	(66)
Total before tax	Total before tax	1,899		(523)		1,148		(888)		Total before tax	846		(66)
Taxes		(155)		46		(127)		140
(Benefit) tax										(Benefit) tax	(8)		9
Net of tax	Net of tax	$	1,744	$	(477)	$	1,021	$	(748)	Net of tax	$	838	$	(57)
Amortization of pension and other postretirement benefit items (1):	Amortization of pension and other postretirement benefit items (1):									Amortization of pension and other postretirement benefit items (1):
Actuarial losses	Actuarial losses	$	1,731	$	1,716	$	5,433	$	5,194	Actuarial losses	$	2,143	$	1,852
Prior-service costs	Prior-service costs	9		21		25		65		Prior-service costs	(251)		8

Total before tax	Total before tax	1,740		1,737		5,458		5,259		Total before tax	1,892		1,860
Tax benefit	Tax benefit	(411)		(405)		(1,278)		(1,226)		Tax benefit	(442)		(434)
Net of tax	Net of tax	$	1,329	$	1,332	$	4,180	$	4,033	Net of tax	$	1,450	$	1,426
Total reclassifications, net of tax	Total reclassifications, net of tax	$	3,073	$	855	$	5,201	$	3,285	Total reclassifications, net of tax	$	2,288	$	1,369

(1) These accumulated other comprehensive (loss) income components are included in the computation of net benefit expense for pension and other postretirement benefit plans.

Note 1211 — Taxes on income from continuing operations

Three Months Ended Nine Months Ended
September 27, 2020 September 29, 2019 September 27, 2020 September 29, 2019
Effective income tax rate (0.8)% (132.3)% 7.8% (48.4)%


	Three Months Ended
	March 28, 2021	March 29, 2020
Effective income tax rate	14.2%	7.8%

The effective income tax rate for the three months ended March 28, 2021 and March 29, 2020 was 14.2% and 7.8%, respectively. The effective income tax rates for both the three ~~and nine~~ months ended ~~September 27,~~March 28, 2021 and March 29, 2020 reflect a significant net tax benefit related to share-based compensation. The effective income tax ~~rates~~rate for the three ~~and nine~~ months ended ~~September~~March 29, 2019 reflect a discrete tax benefit related to the reduction of a deferred tax liability associated with foreign withholding taxes. Additionally, the effective income tax rate for the nine months ended September 29, 20192020 reflects a ~~significant net tax benefit related to share-based compensation.~~

non-taxable contingent consideration adjustment recognized in connection with a decrease in the fair value of our contingent consideration liabilities.

Note 1312 — Commitments and contingent liabilities

Environmental: We are subject to contingencies as a result of environmental laws and regulations that in the future may require us to take further action to correct the effects on the environment of prior disposal practices or releases of chemical or petroleum substances by us or other parties. Much of this liability results from the U.S.

~~TELEFLEX INCORPORATED~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)~~

~~(Unaudited)~~

Comprehensive Environmental Response, Compensation and Liability Act, often referred to as Superfund, the U.S. Resource Conservation and Recovery Act and similar state laws. These laws require us to undertake certain

TELEFLEX INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

investigative and remedial activities at sites where we conduct or once conducted operations or at sites where Company-generated waste was disposed.

Remediation activities vary substantially in duration and cost from site to site. These activities, and their associated costs, depend on the mix of unique site characteristics, evolving remediation technologies, the regulatory agencies involved and their enforcement policies, as well as the presence or absence of other potentially responsible parties. At ~~September 27, 2020,~~March 28, 2021, we have recorded ~~$0.7~~$1.6 million and ~~$5.7~~$5.0 million in accrued liabilities and other liabilities, respectively, relating to these matters. Considerable uncertainty exists with respect to these liabilities and, if adverse changes in circumstances occur, the potential liability may exceed the amount accrued as of ~~September 27, 2020.~~March 28, 2021. The time frame over which the accrued amounts may be paid out, based on past history, is estimated to be 10-15 years.

Legal matters: We are a party to various lawsuits and claims arising in the normal course of business. These lawsuits and claims include actions involving product liability, product warranty, commercial disputes, intellectual property, contract, employment, environmental and other matters. As of ~~September 27, 2020,~~March 28, 2021, we have recorded accrued liabilities of ~~$0.2~~$0.4 million in connection with such contingencies, representing our best estimate of the cost within the range of estimated possible losses that will be incurred to resolve these matters.

~~Based~~On February 17, 2021, representatives of the selling shareholders from whom we acquired Essential Medical, Inc., filed suit on ~~information currently available, advice~~behalf of ~~counsel, established reserves and~~such shareholders in the Court of Chancery of the State of Delaware alleging, among other ~~resources,~~things, that we ~~do not~~breached the merger agreement relating to the acquisition in connection with activities relating to the achievement of revenue-based milestone goals under the agreement. The suit seeks money damages in the amount of $66.9 million plus interest. We are assessing our response to this action, but believe that the ~~outcome of any outstanding litigation~~claim lacks merit, and ~~claims is likely~~intend to be, individually or in the aggregate, material to our business, financial condition, results of operations or liquidity. However, in the event of unexpected further developments, it is possible that the ultimate resolution of these matters, or other similar matters, if unfavorable, may be materially adverse to our business, financial condition, results of operations or liquidity. Legal costs such as outside counsel fees and expenses are charged to selling, general and administrative expenses in the period incurred.defend ourselves vigorously.

In June 2020, we began producing documents and information in response to a Civil Investigative Demand (a “CID”) received in March 2020 by one of our subsidiaries, NeoTract, Inc. (“NeoTract”), from the U.S. Department of Justice through the United States Attorney’s Office for the Northern District of Georgia (collectively, the “DOJ”). The CID relates to the DOJ’s investigation of a single NeoTract customer, requires the production of documents and information pertaining to communications with, and certain rebate programs offered to, that customer and pertains to communications and activities occurring both prior to our acquisition of NeoTract in October 2017 and thereafter. In July 2020, the DOJ advised us that it had opened an investigation under the civil False Claims Act, 31 U.S.C. §3729, with respect to NeoTract’s operations broadly in addition to the customer investigation.

Based on information currently available, advice of counsel, established reserves and other resources, we do not believe that the outcome of any outstanding litigation and claims is likely to be, individually or in the aggregate, material to our business, financial condition, results of operations or liquidity. However, in the event of unexpected further developments, it is possible that the ultimate resolution of these matters, or other similar matters, if unfavorable, may be materially adverse to our business, financial condition, results of operations or liquidity. Legal costs such as outside counsel fees and expenses are charged to selling, general and administrative expenses in the period incurred.

We maintain policies and procedures to promote compliance with the Anti-Kickback Statute, False Claims Acts and other applicable laws and regulations and intend to provide information sought by the government. We cannot at this time reasonably predict, however, the ultimate scope or outcome of this matter, including whether an investigation may raise other compliance issues of interest, including those beyond the scope described above or how any such issues might be resolved. We also cannot at this time reasonably estimate any potential liabilities or penalty, if any, that may arise from this matter, which could have a material adverse effect on our results of operations and financial condition.

Tax audits and examinations: We are routinely subject to tax examinations by various tax authorities. As of ~~September 27, 2020,~~March 28, 2021, the most significant tax ~~examination~~examinations in process ~~was~~were in Ireland and Germany. We may establish reserves with respect to our uncertain tax positions, after we adjust the reserves to address developments with respect to our uncertain tax positions, including developments in ~~this~~these tax ~~examination.~~examinations. Accordingly, developments in tax audits and examinations, including resolution of uncertain tax positions, could result in increases or decreases to our recorded tax liabilities, which could impact our financial results.

1915

TELEFLEX INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

Note 1413 — Segment information

The following tables present our segment results for the three ~~and nine~~ months ended ~~September 27, 2020~~March 28, 2021 and ~~September~~March 29, ~~2019:~~2020:


		Three Months Ended				Nine Months Ended
		September 27, 2020		September 29, 2019		September 27, 2020		September 29, 2019			Three Months Ended
		(Dollars in thousands)									March 28, 2021		March 29, 2020
Americas	Americas	$	375,040	$	374,493	$	1,045,532	$	1,092,321	Americas	$	375,493	$	358,002
EMEA	EMEA	135,649		140,518		423,416		442,110		EMEA	141,253		156,124
Asia	Asia	68,213		77,864		188,411		213,869		Asia	63,690		53,129
OEM	OEM	49,399		55,444		168,618		166,110		OEM	53,489		63,387
Net revenues	Net revenues	$	628,301	$	648,319	$	1,825,977	$	1,914,410	Net revenues	$	633,925	$	630,642


		Three Months Ended				Nine Months Ended
		September 27, 2020		September 29, 2019		September 27, 2020		September 29, 2019			Three Months Ended
		(Dollars in thousands)									March 28, 2021		March 29, 2020
Americas	Americas	$	121,760	$	81,405	$	310,267	$	229,513	Americas	$	83,602	$	140,969
EMEA	EMEA	17,702		21,820		53,044		69,670		EMEA	22,995		20,419
Asia	Asia	10,099		21,460		33,957		50,699		Asia	14,916		10,232
OEM	OEM	8,281		16,008		35,624		43,213		OEM	12,562		15,099
Total segment operating profit (1)	Total segment operating profit (1)	157,842		140,693		432,892		393,095		Total segment operating profit (1)	134,075		186,719
Unallocated expenses (2)	Unallocated expenses (2)	(25,750)		(23,072)		(104,904)		(92,773)		Unallocated expenses (2)	(30,641)		(29,633)
Income from continuing operations before interest and taxes	Income from continuing operations before interest and taxes	$	132,092	$	117,621	$	327,988	$	300,322	Income from continuing operations before interest and taxes	$	103,434	$	157,086

(1)Segment operating profit includes segment net revenues from external customers reduced by the segment's standard cost of goods sold, adjusted for fixed manufacturing cost absorption variances, selling, general and administrative expenses, research and development expenses and an allocation of corporate expenses. Corporate expenses are allocated among the segments in proportion to the respective amounts of one of several items (such as net revenues, numbers of employees, and amount of time spent), depending on the category of expense involved.

(2)Unallocated expenses primarily include manufacturing variances other than fixed manufacturing cost absorption variances, restructuring and impairment charges and gain on sale of assets.

Note 1514 — Subsequent event

Redemption of 4.875% Senior Notes due 2026

On ~~October 11, 2020,~~April 29, 2021, we ~~executed~~issued a ~~definitive agreement~~notice of redemption to ~~acquire Z-Medica, LLC. ("Z-Medica"~~holders of our outstanding $400 million aggregate principal amount of 4.875% Senior Notes due 2026 (the “2026 Notes”),. Pursuant to the notice of redemption, the 2026 Notes will be redeemed on June 1, 2021 (the “Redemption Date”) at a ~~privately held medical device company that manufactures~~redemption price equal to 102.438% of the principal amount of the 2026 Notes plus accrued and sells hemostatic (hemorrhage control) products, which are marketed under the QuikClot, Combat Gauze and QuickClot Control+ brand names and will complement our anesthesia product portfolio. We will acquire Z-Medica for an initial cash purchase price of $500 million. The agreement also provides for an additional payment ofunpaid interest up to, ~~$25 million upon~~but not including, the ~~achievement~~Redemption Date (the “Redemption Price”). The notice of ~~certain commercial milestones. The acquisition~~redemption provides that the redemption is subject to ~~customary closing conditions, including receipt of certain regulatory approvals, and is expected~~the condition that we are able to ~~be completed in the fourth quarter of 2020. In anticipation of the expected completion of this transaction, in October 2020, we drew $500 million in additional borrowings~~borrow funds under our revolving credit ~~facility.~~agreement on the Redemption Date in an amount sufficient to pay the aggregate Redemption Price. We anticipate recognizing a loss on extinguishment of debt of $13.0 million in the second quarter of 2021 as a result of the redemption of the 2026 Notes.

2016

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Overview

Teleflex Incorporated (“we,” “us,” “our" and “Teleflex”) is a global provider of medical technology products focused on enhancing clinical benefits, improving patient and provider safety and reducing total procedural costs. We primarily design, develop, manufacture and supply single-use medical devices used by hospitals and healthcare providers for common diagnostic and therapeutic procedures in critical care and surgical applications. We market and sell our products worldwide through a combination of our direct sales force and distributors. Because our products are used in numerous markets and for a variety of procedures, we are not dependent upon any one end-market or procedure. We are focused on achieving consistent, sustainable and profitable growth by increasing our market share and improving our operating efficiencies.

We evaluate our portfolio of products and businesses on an ongoing basis to ensure alignment with our overall objectives. Based on our evaluation, we may identify opportunities to divest businesses and product lines that do not meet our objectives. In addition, we may seek to optimize utilization of our facilities through restructuring initiatives designed to further improve our cost structure and enhance our competitive position. We also may continue to explore opportunities to expand the size of our business and improve operating margins through a combination of acquisitions and distributor to direct sales conversions, which generally involve our elimination of a distributor from the sales channel, either by acquiring the distributor or terminating the distributor relationship (in some instances, particularly in Asia, the conversions involve our acquisition or termination of a master distributor and the continued sale of our products through sub-distributors or through new distributors). Distributor to direct sales conversions are designed to facilitate improved product pricing and more direct access to the end users of our products within the sales channel.

On October 11, 2020, we executed a definitive agreement to acquire Z-Medica, LLC. ("Z-Medica"), a privately held medical device company that manufactures and sells hemostatic (hemorrhage control) products, which are marketed under the QuikClot, Combat Gauze and QuickClot Control+ brand names. The acquisition, which will complement our anesthesia product portfolio, includes an initial cash purchase price of $500 million and also provides for an additional payment of up to $25 million upon the achievement of certain commercial milestones. We expect the acquisition to be completed in the fourth quarter of 2020, subject to the satisfaction of customary closing conditions, including receipt of certain regulatory approvals.

COVID-19 pandemic

We continue to experience the effects of the global ~~pandemic caused by the~~ COVID-19 ~~novel strain of coronavirus.~~pandemic. Among other things, the response to the COVID-19 pandemic has had the effect of reducing the number of elective procedures being carried out, which has impacted and continues to impact some of our product categories, including our interventional urology, surgical, interventional, anesthesia and OEM products, which have experienced and continue to experience decreased demand. We have also experienced and continue to experience increased demand for products used in the treatment of patients with COVID-19, which are mostly concentrated in our respiratory and vascular access product categories. ~~For~~During 2020 and for the three ~~and nine~~ months ended ~~September 27, 2020,~~March 28, 2021, each of our segments were and continue to be negatively impacted by the COVID-19 pandemic due to the reduction in elective procedures and, to a lesser extent, as a result of government-mandated and self-imposed shut-downs in several countries, which were implemented to protect individuals and control the spread of COVID-19. The COVID-19 pandemic is impacting other elements of our operations, as well as our employees, contractors, suppliers, customers, freight transport providers and other business partners. To date, we have not experienced significant disruptions in the global supply chain for our products that are in high demand, but, in some cases, delivery times have lengthened, resulting in backorders for some of our products.

In addition, there have been and continues to be impacts on our cost structure resulting from measures that we and other businesses are taking or will take, in accordance with governmental requirements and otherwise, to protect our employees and business partners. We continue to assess the impact on our business (including our employees, customers and suppliers) of travel restrictions, border closures and quarantines as they affect our various sites, including our 35 global manufacturing sites. In most jurisdictions, our manufacturing and distribution sites remain open because we are considered an essential business. However, we have experienced temporary or partial work stoppages in some manufacturing sites in North America and Asia. During 2020 and through the three ~~and nine~~ months ended ~~September 27, 2020,~~March 28, 2021, we experienced, and we continue to experience, inefficiencies in our manufacturing operations due to government-mandated and self-imposed restrictions placed on and safety measures implemented at our facilities globally. From an operating expense perspective, we have experienced and continue to experience net decreases in selling, general and administrative expenses ~~as a result~~compared to levels experienced prior to the onset of the COVID-19 pandemic due to cost

mitigation efforts implemented to control discretionary spending including selling, marketing and travel and entertainment related ~~costs and lower performance related employee-benefit~~ costs.

During the third quarter of 2020 and into the fourth quarter, we have begun to experience instances of improvement in revenue trends for the product categories most impacted by the postponement of non-emergent procedures because of the COVID-19 pandemic. However, weWe have yet to return to the revenue growth levels that we achieved prior to the onset of the pandemic. In addition, the degree of improvement has varied by product category and by region. It is uncertain whether this trend will continue or if we will again experience a decrease in the number of elective procedures performed as the COVID-19 pandemic evolves, particularly if the virus becomes more prevalent ~~over~~or if new strains of the ~~fall and winter seasons in the Northern Hemisphere.~~virus continue to emerge. Overall, we believe that the COVID-19 pandemic will continue to negatively affect our revenues and

operations, at least over the near-term. Because of the dynamic nature of the crisis, such as recent regional COVID-19 outbreaks that are impacting the recovery, we cannot accurately predict the extent or duration of the impacts of the pandemic.

~~Government investigation~~

Results of Operations

As used in this discussion, "new products" are products for which commercial sales have commenced within the past 36 months, and “existing products” are products for which commercial sales commenced more than 36 months ago. Discussion of results of operations items that reference the effect of one or more acquired and/or divested businesses or assets (except as noted below with respect to acquired distributors) generally reflects the impact of the acquisitions and/or divestitures within the first 12 months following the date of the acquisition and/or divestiture. In addition to increases and decreases in the per unit selling prices of our products to our customers, our discussion of the impact of product price increases and decreases also reflects the impact on the pricing of our products resulting from the elimination of the distributor, either through acquisition or termination of the distributor, from the sales channel. All of the dollar amounts in the tables are presented in millions unless otherwise noted.

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

Net revenues

Three Months Ended Nine Months Ended
September 27, 2020 September 29, 2019 September 27, 2020 September 29, 2019
(Dollars in millions)
Net revenues $ 628.3 $ 648.3 $ 1,826.0 $ 1,914.4


	Three Months Ended
	March 28, 2021		March 29, 2020
Net revenues	$	633.9	$	630.6

Net revenues for the three months ended ~~September 27, 2020 decreased $20.0~~March 28, 2021 increased $3.3 million, or ~~3.1%~~0.5%, compared to the prior year period, which was primarily attributable to net revenues of $20.3 million generated by acquired businesses and $20.3 million of favorable fluctuations in foreign currency exchange rates, largely offset by a ~~$37.9 million~~ net decrease in sales volumes of existing products mostly caused by the COVID-19 ~~pandemic partially offset by favorable fluctuations in foreign currency exchange rates and net revenues generated by the IWG High Performance Conductors, Inc. (HPC) acquisition.~~

Net revenues for the nine months ended September 27, 2020 decreased $88.4 million, or 4.6%, compared to the prior year period, which was primarily attributable to a $110.8 million net decrease in sales volumes of existing products caused by the COVID-19 pandemic partially offset by net revenues generated by the HPC acquisition.

pandemic.

Gross profit


		Three Months Ended						Nine Months Ended
		September 27, 2020			September 29, 2019			September 27, 2020			September 29, 2019				Three Months Ended
		(Dollars in millions)													March 28, 2021			March 29, 2020
Gross profit	Gross profit	$	329.3		$	355.1		$	941.3		$	1,031.3		Gross profit	$	344.5		$	333.6
Percentage of sales	Percentage of sales	52.4		%	54.8		%	51.6		%	53.9		%	Percentage of sales	54.3		%	52.9		%

Gross margin for the three months ended ~~September 27, 2020 decreased 240~~March 28, 2021 increased 140 basis points, or ~~4.4%~~2.6%, compared to the prior year period primarily due to ~~lower sales volumes~~benefits from cost improvement initiatives and ~~higher manufacturing costs, both caused~~favorable product mix. The increases in gross margin were partially offset by ~~the COVID-19 pandemic, and~~ unfavorable fluctuations in foreign currency exchange rates.

Gross margin for the nine months ended September 27, 2020 decreased 230 basis points, or 4.3%, compared to the prior year period primarily due to lower sales volumes and higher manufacturing costs, both caused by the COVID-19 pandemic.

Selling, general and administrative


		Three Months Ended						Nine Months Ended
		September 27, 2020			September 29, 2019			September 27, 2020			September 29, 2019				Three Months Ended
		(Dollars in millions)													March 28, 2021			March 29, 2020
Selling, general and administrative	Selling, general and administrative	$	171.7		$	209.3		$	510.7		$	631.7		Selling, general and administrative	$	203.1		$	147.8
Percentage of sales	Percentage of sales	27.3		%	32.3		%	28.0		%	33.0		%	Percentage of sales	32.0		%	23.4		%

Selling, general and administrative expenses for the three months ended ~~September 27, 2020 decreased $37.6~~March 28, 2021 increased $55.3 million compared to the prior year period. The ~~decrease~~increase was primarily attributable to athe benefit recognized in the prior year resulting from ~~reductions~~decreases in the estimated fair value of our contingent consideration liabilities ~~which largely related to revenue-based milestone payments, due to~~caused by the adverse ~~financial projections resulting from~~impacts of the COVID-19 ~~pandemic.~~

~~Selling, general~~pandemic and ~~administrative~~operating expenses ~~for the nine months ended September 27, 2020 decreased $121.0 million compared to the prior year period.~~incurred by acquired businesses, primarily Z-Medica. The decrease was primarily attributable to a $95.5 million benefit from reductions in the estimated fair value of our contingent consideration liabilities, which is described above in the section detailing the changesincreases in selling, general and administrative costs were partially offset by lower selling expenses, ~~for the three months ended September 27, 2020. The decrease was also attributable to cost mitigation efforts implemented to control discretionary spending in response to~~largely caused by the COVID-19 pandemic, ~~including reduced selling, marketing and travel and entertainment related activities and lower performance related employee-benefit costs.~~within certain of our product portfolios.

Research and development


		Three Months Ended						Nine Months Ended
		September 27, 2020			September 29, 2019			September 27, 2020			September 29, 2019				Three Months Ended
		(Dollars in millions)													March 28, 2021			March 29, 2020
Research and development	Research and development	$	29.2		$	28.0		$	86.0		$	82.7		Research and development	$	29.9		$	27.4
Percentage of sales	Percentage of sales	4.7		%	4.3		%	4.7		%	4.3		%	Percentage of sales	4.7		%	4.3		%

The ~~increases~~increase in research and development expenses for the three ~~and nine~~ months ended ~~September 27, 2020~~March 28, 2021 compared to the prior year period ~~were~~was primarily attributable to European Union Medical Device Regulation ("EU MDR") related costs partially offset by lower project spend ~~across several~~within certain of our product portfolios.

Restructuring and impairment ~~(credits)~~ charges

~~2020 Workforce reduction~~2021 Restructuring plan

During the ~~second~~first quarter of ~~2020,~~2021, we committed to a ~~workforce reduction~~restructuring plan designed to ~~improve profitability and reduce cost primarily by streamlining certain sales and marketing~~streamline various business functions inacross our ~~EMEA segment and certain manufacturing operations in our OEM segment. The workforce reduction was initiated to further align the business with our high growth strategic objectives.~~segments. We estimate that we will incur aggregate pre-tax restructuring charges of ~~$10~~$7 million to ~~$13~~$9 million, consisting primarily of termination ~~benefits, all~~benefits. In addition, we expect to incur $3 million to $4 million in restructuring related charges, most of which ~~will result in future cash outlays. This plan will be substantially complete during 2020 and as a result, most of these charges~~ are expected to be ~~incurred prior to~~recognized in cost of sales. We expect this program will be substantially completed by the end of ~~2020.~~ 2021.

We expect to begin realizing plan-related savings in ~~2020~~2021 and expect to achieve annual pre-tax savings of ~~$11~~$13 million to ~~$13~~$16 million once the ~~plans are~~plan is fully implemented.

Anticipated charges and pre-tax savings related to restructuring programs and other similar cost savings initiatives

In addition to the ~~2020 Workforce reduction~~2021 Restructuring plan, we have ongoing restructuring programs primarily related to the consolidation of our manufacturing operations (referred to as our 2019, 2018 and 2014 Footprint realignment plans). We also have similar ongoing activities to relocate certain manufacturing operations within our OEM segment (the "OEM initiative") that ~~was initiated in 2018 and does~~do not meet the criteria for a restructuring program under applicable accounting guidance; nevertheless, the activities should result in cost savings (we expect only minimal costs to be incurred in connection with the OEM initiative). With respect to our currently ongoing restructuring programs (including the 2021 Restructuring plan) and the OEM initiative, the table below summarizes charges incurred or estimated to be incurred and estimated annual pre-tax savings to be realized as follows: (1) with respect to charges (a) the estimated total charges that will have been incurred once the restructuring programs and OEM initiative are completed; (b) the charges incurred through December 31, ~~2019;~~2020; and (c) the estimated charges to be incurred from January 1, ~~2020~~2021 through the last anticipated completion date of the restructuring programs and OEM initiative, ~~December 31, 2024~~ and (2) with respect to estimated annual pre-tax savings, (a) the estimated total annual pre-tax savings to be realized once the restructuring programs and OEM initiative are completed; (b) the estimated annual pre-tax savings realized based on the progress of the restructuring programs and OEM initiative through December 31, ~~2019;~~2020; and (c) the estimated additional annual pre-tax savings to be realized from January 1, ~~2020~~2021 through the last anticipated completion date of the restructuring programs and the OEM ~~initiative, December 31, 2024.~~initiative.

Estimated charges and pre-tax savings are subject to change based on, among other things, the nature and timing of restructuring activities and similar activities, changes in the scope of restructuring programs and the OEM initiative, unanticipated expenditures and other developments, ~~including the uncertainties created by the COVID-19 pandemic,~~ the effect of additional acquisitions or dispositions, ~~the failure to realize anticipated savings associated with the development and qualification of a component included in certain kits sold by our anesthesia business in North America~~ and other factors that were not reflected in the assumptions made by management in previously estimating restructuring and restructuring related charges and estimated pre-tax savings. Moreover, estimated pre-tax savings constituting efficiencies with respect to increased costs that otherwise would have resulted from business acquisitions involve, among other things, assumptions regarding the cost structure and integration of businesses that previously were not administered by our management, which are subject to a particularly high degree of risk and uncertainty. It is likely that estimates of charges and pre-tax savings will change from time to time, and the table below ~~reflects~~may reflect changes from amounts previously estimated. In addition, the table below ~~does not include~~reflects the estimated charges and pre-tax savings related to ~~substantially completed~~our ongoing programs. Additional details, including estimated charges expected to be incurred in connection with our restructuring programs and the anticipated completion dates, are described in Note 5 to the condensed consolidated financial statements included in this report.

Pre-tax savings may be realized during, and subsequent to, the completion of the restructuring program. Pre-tax savings can also ~~can~~ be affected by increases or decreases in sales volumes generated by the businesses ~~subject to~~impacted by the consolidation of manufacturing operations; such variations in revenues can increase or decrease pre-tax savings generated by the consolidation of manufacturing operations. For example, an increase in sales volumes

generated by the ~~affected~~impacted businesses, although likely ~~increasing~~to increase manufacturing costs, may generate additional savings with respect to costs that otherwise would have been incurred if the manufacturing operations were not consolidated.

Ongoing restructuring programs and other similar cost savings initiatives

Estimated Total

Actual results through
December 31, ~~2019~~2020

Estimated remaining from January 1, 2020 through
December 31, 2024Remaining

~~(Dollars in millions)~~

Restructuring charges~~(1)~~

$~~103~~102 - ~~$124~~$118

$8389

$2013 - ~~$41~~$29

Restructuring related charges ~~(2)~~(1)

~~118~~119 - ~~144~~146

4674

7245 - 9872

Total charges ~~(3)~~

$221 - ~~$268~~$264

$~~129~~163

$9258 - ~~$139~~$101

OEM initiative annual pre-tax savings

$6 - $7

$12

$54 - $6

~~Pre-tax savings- 2020 Workforce reduction plan~~ ~~(4)~~

~~11 - 13~~

—

~~11 - 13~~$5

Pre-tax savings- ongoing restructuring plans ~~(5)(6)~~(2)

6881 - 7894

2532

4349 - 5362

Total annual pre-tax savings

$8587 - ~~$98~~$101

$2634

$5953 - ~~$72~~$67

(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 locations, project management costs and accelerated depreciation, as well as a charge that is expected to be imposed by a taxing authority as a result of our exit from facilities in the authority's jurisdiction. Most of these charges (other than the tax charge) are expected to be recognized as cost of goods sold.

~~(3)~~During the second quarter of 2020, we adjusted the estimated ranges for restructuring, restructuring related and total charges to reflect the impacts of the 2020 Workforce reduction plan (which was initiated in the second quarter of 2020) and to reflect changes in estimates related primarily to termination benefits and transfer validation associated with the ongoing restructuring programs. The prior range of total charges for the ongoing restructuring plans was $205 million to $255 million as compared to the current range of $211 million to $255 million.

~~(4)~~(2)Most ~~all of the pre-tax savings are expected to result in reductions to selling, general and administrative expenses.~~

~~(5)Substantially all~~ of the pre-tax savings are expected to result in reductions to cost of goods sold.

~~(6)~~During the second quarter of 2020, we updated our estimated annual pre-tax savings associated with our 2019 and 2014 realignment plans. We now estimate our savings will be $15 million to $17 million and $28 million to $31 million, respectively, compared to our prior estimates of $12 million to $14 million and $26 million to $29 million, respectively. The increases in the savings ranges are the result of additional cost reduction measures and changes in assumptions identified as the programs progressed.

Restructuring and impairment charges ~~(credits)~~ incurred

Three Months Ended Nine Months Ended
September 27, 2020 September 29, 2019 September 27, 2020 September 29, 2019
(Dollars in millions)
Restructuring and impairment (credits) charges $ (3.7) $ 1.3 $ 16.7 $ 20.3


	Three Months Ended
	March 28, 2021		March 29, 2020
Restructuring and impairment charges	$	8.0	$	1.3

Restructuring and impairment credits for the three months ended ~~September 27, 2020 primarily consisted of changes in estimates with respect to termination benefits associated with the 2018 Footprint realignment plan.~~

~~Restructuring and impairment charges for the nine months ended September 27, 2020~~March 28, 2021 primarily consisted of termination benefits related to ~~our 2020 Workforce reduction plan and 2018 Footprint realignment~~the 2021 Restructuring plan.

Interest expense


		Three Months Ended						Nine Months Ended
		September 27, 2020			September 29, 2019			September 27, 2020			September 29, 2019				Three Months Ended
		(Dollars in millions)													March 28, 2021			March 29, 2020
Interest expense	Interest expense	$	16.7		$	19.5		$	47.8		$	63.0		Interest expense	$	16.8		$	15.4
Average interest rate on debt	Average interest rate on debt	2.5		%	3.4		%	2.5		%	3.6		%	Average interest rate on debt	2.5		%	2.7		%

The ~~decrease~~increase in interest expense for the three ~~and nine~~ months ended ~~September 27, 2020~~March 28, 2021 compared to the prior year ~~periods~~period was primarily due to ~~a lower average interest rate resulting from decreases in interest rates associated with our variable interest rate debt instruments partially offset by increases~~an increase in average debt outstanding.

Taxes on income from continuing operations

Three Months Ended Nine Months Ended
September 27, 2020 September 29, 2019 September 27, 2020 September 29, 2019
Effective income tax rate (0.8) % (132.3) % 7.8 % (48.4) %


	Three Months Ended
	March 28, 2021		March 29, 2020
Effective income tax rate	14.2	%	7.8	%

The effective income tax rates for both the three ~~and nine~~ months ended ~~September 27,~~March 28, 2021 and March 29, 2020 reflect a significant net tax benefit related to share-based compensation. The effective income tax ~~rates~~rate for the three ~~and nine~~ months ended ~~September~~March 29, 2019 reflect a discrete tax benefit related to the reduction of a deferred tax liability associated with foreign withholding taxes. Additionally, the effective income tax rate for the nine months ended September 29, 20192020 reflects a ~~significant net tax benefit related to share-based compensation.~~non-taxable contingent consideration adjustment recognized in connection with a decrease in the fair value of our contingent consideration liabilities.

Segment Financial Information


Segment net revenues	Segment net revenues											Segment net revenues
		Three Months Ended					Nine Months Ended
		September 27, 2020		September 29, 2019		% Increase/ (Decrease)	September 27, 2020		September 29, 2019		% Increase/ (Decrease)		Three Months Ended
		(Dollars in millions)											March 28, 2021		March 29, 2020		% Increase/(Decrease)

Americas	Americas	$	375.0	$	374.5	0.1	$	1,045.6	$	1,092.3	(4.3)	Americas	$	375.5	$	358.0	4.9
EMEA	EMEA	135.7		140.5		(3.5)	423.4		442.1		(4.2)	EMEA	141.2		156.1		(9.5)
Asia	Asia	68.2		77.9		(12.4)	188.4		213.9		(11.9)	Asia	63.7		53.1		19.9
OEM	OEM	49.4		55.4		(10.9)	168.6		166.1		1.5	OEM	53.5		63.4		(15.6)

Segment net revenues	Segment net revenues	$	628.3	$	648.3	(3.1)	$	1,826.0	$	1,914.4	(4.6)	Segment net revenues	$	633.9	$	630.6	0.5

Segment operating profit	Segment operating profit											Segment operating profit
		Three Months Ended					Nine Months Ended						Three Months Ended
		September 27, 2020		September 29, 2019		% Increase/ (Decrease)	September 27, 2020		September 29, 2019		% Increase/ (Decrease)		March 28, 2021		March 29, 2020		% Increase/(Decrease)
		(Dollars in millions)

Americas	Americas	$	121.8	$	81.4	49.6	$	310.3	$	229.5	35.2	Americas	$	83.6	$	141.0	(40.7)
EMEA	EMEA	17.7		21.8		(18.9)	53.0		69.7		(23.9)	EMEA	23.0		20.4		12.6
Asia	Asia	10.1		21.5		(52.9)	34.0		50.7		(33.0)	Asia	14.9		10.2		45.8
OEM	OEM	8.2		16.0		(48.3)	35.6		43.2		(17.6)	OEM	12.6		15.1		(16.8)

Segment operating profit (1)	Segment operating profit (1)	$	157.8	$	140.7	12.2	$	432.9	$	393.1	10.1	Segment operating profit (1)	$	134.1	$	186.7	(28.2)

(1)See Note 1413 to our condensed consolidated financial statements included in this report for a reconciliation of segment operating profit to our condensed consolidated income from continuing operations before interest and taxes.

Comparison of the three ~~and nine~~ months ended ~~September 27,~~March 28, 2021 and March 29, 2020 ~~and September 29, 2019~~

Americas

Americas net revenues for the three months ended ~~September 27, 2020~~March 28, 2021 increased ~~$0.5~~$17.5 million, or ~~0.1%~~4.9%, compared to the prior year period. The increase was primarily attributable to ~~price increases~~net revenues of ~~$1.8~~$14.7 million generated by the Z-Medica acquisition and an increase in new product sales, partially offset by a ~~$1.5 million net~~ decrease in sales volumes of existing products ~~caused by the COVID-19 pandemic.~~

Americas net revenues for the nine months ended September 27, 2020 decreased $46.7 million, or 4.3%, compared to the prior year period, which was primarily attributable to a net decrease in sales volumes of existing productslargely caused by the COVID-19 pandemic.

Americas operating profit for the three months ended ~~September 27, 2020 increased $40.4~~March 28, 2021 decreased $57.4 million, or ~~49.6%~~40.7%, compared to the prior year period, which was primarily attributable to the benefit recognized in the prior year resulting from decreases in the estimated fair value of our contingent consideration liabilities caused by the adverse impacts of the COVID-19 pandemic.

EMEA

EMEA net revenues for the three months ended March 28, 2021 decreased $14.9 million, or 9.5%, compared to the prior year period, which was primarily attributable to a benefit from a reduction in the estimated fair value of our contingent consideration liabilities, which largely relate to revenue-based milestone payments, due to adverse financial projections resulting from the COVID-19 pandemic.

~~Americas operating profit for the nine months ended September 27, 2020 increased $80.8~~$30.4 million ~~or 35.2%, compared to the prior year period, which was primarily attributable to a benefit from a reduction in the estimated fair~~

~~value of our contingent consideration liabilities partially offset by a decrease in gross profit resulting from lower sales caused by the COVID-19 pandemic.~~

~~EMEA~~

~~EMEA net revenues for the three months ended September 27, 2020 decreased $4.8 million, or 3.5%, compared to the prior year period, which was primarily attributable to a $10.8 million net~~ decrease in sales volumes of existing products largely caused by the COVID-19 pandemic partially offset by favorable fluctuations in foreign currency exchange rates of ~~$5.4~~$13.8 million.

EMEA operating profit for the three months ended March 28, 2021 increased $2.6 million, or 12.6%, compared to the prior year period, which was primarily attributable to favorable fluctuations in foreign currency exchange rates and a decrease in selling, general and administrative costs caused by the COVID-19 pandemic, partially offset by a decrease in gross profit, resulting from lower sales caused by the COVID-19 pandemic.

Asia

Asia net revenues for the ~~nine~~three months ended ~~September 27, 2020 decreased $18.7~~March 28, 2021 increased $10.6 million, or ~~4.2%~~19.9%, compared to the prior year period, which was primarily attributable to favorable fluctuations in foreign currency exchange rates of $4.6 million, an increase in new product sales and an increase in sales volumes of existing products.

Asia operating profit for the three months ended March 28, 2021 increased $4.7 million, or 45.8%, compared to the prior year period, which was primarily attributable to an increase in gross profit resulting from higher sales and favorable fluctuations in foreign currency exchange rates.

OEM

OEM net revenues for the three months ended March 28, 2021 decreased $9.9 million, or 15.6%, compared to the prior year period, which was primarily attributable to a net $15.5 million decrease in sales volumes of existing products largely caused by the COVID-19 ~~pandemic.~~pandemic, partially offset by net revenues of $4.0 million generated by the HPC acquisition.

~~EMEA~~OEM operating profit for the three months ended ~~September 27, 2020~~March 28, 2021 decreased ~~$4.1~~$2.5 million, or ~~18.9%~~16.8%, compared to the prior year period, which was primarily attributable to a decrease in gross profit resulting from lower sales caused by the COVID-19 pandemic, partially offset by ~~favorable mix, and an increase in research and development expenses. The decreases in operating profit were partially offset by~~ lower ~~selling, general and administrative expenses, also caused by the COVID-19 pandemic, and favorable fluctuations in foreign currency exchange rates.~~

EMEA operating profit for the nine months ended September 27, 2020 decreased $16.7 million, or 23.9%, compared to the prior year period, which was primarily attributable to a decrease in gross profit resulting from lower sales and higher manufacturing costs, both caused by the COVID-19 pandemic, an increase in research and development expenses and unfavorable fluctuations in foreign currency exchange rates partially offset by lower selling, general and administrative expenses also caused by the COVID-19 pandemic.

~~Asia~~

Asia net revenues for the three months ended September 27, 2020 decreased $9.7 million, or 12.4%, compared to the prior year period, which was primarily attributable to a net decrease in sales volumes of existing products caused by the COVID-19 pandemic.

Asia net revenues for the nine months ended September 27, 2020 decreased $25.5 million, or 11.9%, compared to the prior year period, which was primarily attributable to a net decrease in sales volumes of existing products caused by the COVID-19 pandemic.

Asia operating profit for the three months ended September 27, 2020 decreased $11.4 million, or 52.9%, compared to the prior year period, which was primarily attributable a decrease in gross profit resulting from lower sales and unfavorable product mix, both caused by the COVID-19 pandemic, which were partially offset by lower selling, general and administrative expense also caused by the COVID-19 pandemic.

Asia operating profit for the nine months ended September 27, 2020 decreased $16.7 million, or 33.0%, compared to the prior year period, which was primarily attributable to the COVID-19 pandemic, which caused a decrease in gross profit resulting from lower sales caused by the COVID-19 pandemic and unfavorable fluctuations in foreign currency exchange rates, partially offset by lower selling, general and administrative expenses also caused by the COVID-19 pandemic.

~~OEM~~

OEM net revenues for the three months ended September 27, 2020 decreased $6.0 million, or 10.9%, compared to the prior year period, which was primarily attributable to a $12.6 million net decrease in sales volumes of existing products caused by the COVID-19 pandemic partially offset by net revenues of $6.1 million generated by the HPC acquisition.

OEM net revenues for the nine months ended September 27, 2020 increased $2.5 million, or 1.5%, compared to the prior year period, which was primarily attributable to net revenues of $20.1 million generated by the HPC acquisition ~~partially offset by a $17.4 million net decrease in sales volumes of existing products caused by the COVID-19 pandemic.~~

OEM operating profit for the three months ended September 27, 2020 decreased $7.8 million, or 48.3%, compared to the prior year period, which was primarily attributable to a decrease in gross profit resulting from lower sales caused by the COVID-19 pandemic.

OEM operating profit for the nine months ended September 27, 2020 decreased $7.6 million, or 17.6%, compared to the prior year period, which was primarily attributable to a decrease in gross profit resulting from lower sales caused by the COVID-19 pandemic and expenses incurred in connection with the HPC acquisition.related costs.

Liquidity and Capital Resources

While the potential economic impact resulting from the COVID-19 pandemic and the extent and duration of the pandemic's impact are difficult to assess or predict, the impact of the pandemic on the global financial markets may reduce our ability to access capital, which could negatively impact our short-term and long-term liquidity.In consideration of the significant uncertainty created by the COVID-19 pandemic, we are continuing to assess our liquidity and anticipated capital requirements. For the nine months ended September 27, 2020, we improved our liquidity position by paying off the borrowings outstanding under our revolving credit facility and increasing long-term borrowings by $500.0 million through the issuance of our 2028 Senior Notes. Additionally, we generated operating cash flows of $241.5 million for the nine months ended September 27, 2020. Notwithstanding the significant uncertainty created by the COVID-19 pandemic, we believe our cash flow from operations, available cash and cash equivalents and borrowings under our revolving credit facility will enable us to fund our operating requirements, capital expenditures and debt obligations for the next 12 months and the foreseeable future. We have net cash provided by United States based operating activities as well as non-United States sources of cash available to help fund our debt service requirements in the United States. We manage our worldwide cash requirements by monitoring the funds available among our subsidiaries and determining the extent to which we can access those funds on a cost effective basis.

In consideration of the COVID-19 pandemic, we are closely monitoring our receivables and payables.To date, we have not experienced significant payment defaults by, or identified other collectability concerns with, our customers, and we have sufficient lending commitments in place to enable us to fund our anticipated additional operating needs.

In anticipation of the expected completion of the Z-Medica acquisition in the fourth quarter of 2020, we drew $500 million in additional borrowings under our revolving credit facility in October 2020.

Cash Flows

Net cash provided by operating activities from continuing operations was ~~$241.5~~$110.8 million for the ~~nine~~three months ended ~~September 27, 2020~~March 28, 2021 as compared to net cash ~~provided by~~used in operating activities of ~~$289.2~~$11.5 million for the ~~nine~~three months ended ~~September~~March 29, ~~2019.~~2020. The ~~$47.7~~$122.3 million ~~decrease~~increase was primarily attributable to ~~an increase in~~lower contingent consideration payments, lower payroll and ~~tax payments. The decreases in operating cash flows were partially offset by favorable changes in other working capital driven by~~benefit related payments and higher accounts receivable ~~collections.~~collections as compared to the prior year.

Net cash used in investing activities from continuing operations was ~~$318.8~~$20.9 million for the ~~nine~~three months ended ~~September 27, 2020,~~March 28, 2021, which ~~included a $260.0 million payment for the acquisition~~primarily consisted of ~~HPC,~~ capital expenditures of ~~$62.4 million and net interest proceeds on swaps designated as net investment hedges of $10.0~~$19.3 million.

Net cash ~~provided~~used by financing activities from continuing operations was ~~$116.2~~$131.5 million for the ~~nine~~three months ended ~~September 27, 2020,~~March 28, 2021, which reflected a ~~net increase~~reduction in borrowings of ~~$225.0~~$100 million, ~~primarily~~ resulting from ~~the issuance~~a payment against our senior credit facility, dividend payments of ~~the $500~~$15.9 million of 4.25% Senior Notes due 2028 (the "2028 Notes") partially offset by repayments on our revolving credit facility. Net cash used in financing activities for the nine months ended September 27, 2020 also reflectsand contingent consideration payments of ~~$64.1 million and dividend payments of $47.4~~$13.1 million.

Borrowings

On ~~March 30, 2020,~~April 29, 2021, we ~~increased~~issued a notice of redemption to holders of our ~~borrowing capacity related to our accounts receivable securitization facility from $50~~outstanding $400 million ~~to $75 million.~~

~~The~~aggregate principal amount of 4.875% Senior Notes due 2026 (the ~~"2026 Notes"~~“2026 Notes”). Pursuant to the notice of redemption, the 2026 Notes will be redeemed on June 1, 2021 (the “Redemption Date”) at a redemption price equal to 102.438% of the principal amount of the 2026 Notes plus accrued and unpaid interest up to, but not including, the Redemption Date (the “Redemption Price”). We plan to fund the redemption using available borrowings under our revolving credit agreement, and the notice of redemption provides that the redemption is subject to the condition that we are able to borrow funds under our revolving credit agreement on the Redemption Date in an amount sufficient to pay the Redemption Price.

The 2026 Notes contain covenants that, among other things and subject to certain exceptions, limit or restrict our ability, and the ability of our subsidiaries, to incur additional debt or issue preferred stock or other disqualified stock, create liens, merge, consolidate, or dispose of certain assets, pay dividends, make investments or make other restricted payments, or enter into transactions with our affiliates. The indenture governing our 4.625% Senior Notes due 2027 (the “2027 Notes”) contains covenants that, among other things and subject to certain exceptions, limit or restrict our ability, and the ability of our subsidiaries, to create liens; consolidate, merge or dispose of certain

assets; and enter into sale leaseback transactions. The 4.25% Senior Notes due 2028 ~~Notes~~(the "2028 Notes") contain covenants that, among other things, will restrict our ability and the ability of our subsidiaries to create certain liens,

enter into sale lease back transactions, and merge, consolidate, sell or otherwise dispose of all or substantially all of our assets.

As of ~~September 27, 2020,~~March 28, 2021, we were in compliance with these requirements. The obligations under the Credit Agreement, the 2026 Notes, 2027 Notes and 2028 Notes are guaranteed (subject to certain exceptions) by substantially all of our material domestic subsidiaries, and the obligations under the Credit Agreement are (subject to certain exceptions and limitations) secured by a lien on substantially all of the assets owned by us and each guarantor.

Summarized Financial Information – Obligor Group

The 2026 Notes and 2027 Notes (collectively, the "Senior Notes") are issued by Teleflex Incorporated (the “Parent Company”), and payment of the Parent Company's obligations under the Senior Notes is guaranteed, jointly and severally, by an enumerated group of the Parent Company’s subsidiaries (each, a “Guarantor Subsidiary” and collectively, the “Guarantor Subsidiaries”). The guarantees are full and unconditional, subject to certain customary release provisions. Each Guarantor Subsidiary is directly or indirectly 100% owned by the Parent Company. Summarized financial information for the Parent and Guarantor Subsidiaries (collectively, the “Obligor Group”) as of ~~September 27, 2020~~March 28, 2021 and December 31, ~~2019~~2020 and for the ~~nine~~three months ended ~~September 27, 2020~~March 28, 2021 is as follows:


		Nine Months Ended
		September 27, 2020							Three Months Ended
		(Dollars in millions)							March 28, 2021
		Obligor Group		Intercompany		Obligor Group (excluding Intercompany)			Obligor Group		Intercompany		Obligor Group (excluding Intercompany)
Net revenue	Net revenue	$	1,266.8	$	140.0	$	1,126.8	Net revenue	$	451.4	$	51.2	$	400.2
Cost of goods sold	Cost of goods sold	767.2		227.6		539.6		Cost of goods sold	265.3		110.1		155.2
Gross profit	Gross profit	499.6		(87.6)		587.2		Gross profit	186.1		(58.9)		245.0
Income from continuing operations	Income from continuing operations	134.2		(18.4)		152.6		Income from continuing operations	27.5		(28.3)		55.8
Net income	Net income	134.2		(18.4)		152.6		Net income	27.5		(28.3)		55.8


		September 27, 2020						December 31, 2019
		(Dollars in millions)													March 28, 2021						December 31, 2020
		Obligor Group		Intercompany		Obligor Group (excluding Intercompany)		Obligor Group		Intercompany		Obligor Group (excluding Intercompany)			Obligor Group		Intercompany		Obligor Group (excluding Intercompany)		Obligor Group		Intercompany		Obligor Group (excluding Intercompany)

Total current assets	Total current assets	$	811.9	$	80.9	$	731.0	$	735.8	$	51.8	$	684.0	Total current assets	$	828.5	$	82.1	$	746.4	$	806.9	$	49.1	$	757.8
Total assets	Total assets	5,279.8		1,419.1		3,860.7		4,847.9		1,237.7		3,610.2		Total assets	5,841.3		1,512.2		4,329.1		5,867.2		1,491.4		4,375.8
Total current liabilities	Total current liabilities	787.3		574.1		213.2		852.5		500.8		351.7		Total current liabilities	776.6		551.5		225.1		796.7		541.3		255.4
Total liabilities	Total liabilities	3,781.5		878.7		2,902.8		3,659.5		752.4		2,907.1		Total liabilities	4,054.8		878.1		3,176.7		4,206.0		849.6		3,356.4

The same accounting policies as described in Note 1 to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, ~~2019~~2020 are used by the Parent Company and each of its subsidiaries in connection with the summarized financial information presented above. The Intercompany column in the table above represents transactions between and among the Obligor Group and non-guarantor subsidiaries (i.e. those subsidiaries of the Parent Company that have not guaranteed payment of the Senior Notes). Obligor investments in non-guarantor subsidiaries and any related activity are excluded from the financial information presented above. The summarized financial information presented above for the Obligor Group as of and for the nine months ended September 27, 2020 gives effect to the 2028 Notes issued in a private offering in May 2020.

~~Contractual obligations~~

The following table sets forth our contractual obligations solely related to our total borrowings and interest as of September 27, 2020, which, as a result of the issuance of the 2028 Notes and the borrowing activity occurring during the nine months ended September 27, 2020 as described above in "Borrowings", have significantly changed since December 31, 2019:

Payments due by period
Total Less than 1 year 1-3 years 3-5 years More than 5 years
(Dollars in millions)
Total borrowings $ 2,148.0 $ 91.8 $ 61.2 $ 595.0 $ 1,400.0
Interest obligations (1)
486.1 78.6 154.0 134.1 119.4

~~(1)Interest payments on floating rate debt are based on the interest rate in effect on September 27, 2020.~~

Critical Accounting Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates and assumptions.

In our Annual Report on Form 10-K for the year ended December 31, ~~2019,~~2020, we provided disclosure regarding our critical accounting estimates, which are reflective of significant judgments and uncertainties, are important to the presentation of our financial condition and results of operations and could potentially result in materially different results under different assumptions and conditions.

New Accounting Standards

See Note 2 to the condensed consolidated financial statements included in this report for a discussion of recently issued accounting guidance, including estimated effects, if any, of adoption of the guidance on our financial statements.

Forward-Looking Statements

All statements made in this Quarterly Report on Form 10-Q, other than statements of historical fact, are forward-looking statements. The words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “will,” “would,” “should,” “guidance,” “potential,” “continue,” “project,” “forecast,” “confident,” “prospects” and similar expressions typically are used to identify forward-looking statements. Forward-looking statements are based on the then-current expectations, beliefs, assumptions, estimates and forecasts about our business and the industry and markets in which we operate. These statements are not guarantees of future performance and are subject to risks and uncertainties, which are difficult to predict. Therefore, actual outcomes and results may differ materially from those expressed or implied by these forward-looking statements due to a number of factors, including the adverse economic conditions associated with the COVID-19 global health pandemic and the associated financial crisis, stay-at-home and other orders, which could cause material delays and cancellations of elective procedures, curtailed or delayed spending by customers and result in disruptions to our supply chain, closure of our facilities, delays in product launches or diversion of management and other resources to respond to the COVID-19 pandemic; the impact of global and regional economic and credit market conditions on healthcare spending; the risk that the COVID-19 pandemic disrupts local economies and causes economies to enter prolonged recessions; changes in business relationships with and purchases by or from major customers or suppliers; delays or cancellations of shipments; demand for and market acceptance of new and existing products; our inability to provide products to our customers, which may be due to, among other things, events that impact key distributors, suppliers and vendors that sterilize our products; our inability to integrate acquired businesses into our operations, realize planned synergies and operate such businesses profitably in accordance with our expectations; our inability to effectively execute our restructuring plans and programs; our inability to realize anticipated savings from restructuring plans and programs; the impact of enacted healthcare reform legislation and proposals to amend, replace or repeal the legislation; changes in Medicare, Medicaid and third party coverage and reimbursements; the impact of tax legislation and related regulations; competitive market conditions and resulting effects on revenues and pricing; increases in raw material costs that cannot be recovered in product pricing; global economic factors, including currency exchange rates, interest rates, trade disputes and sovereign debt issues; difficulties in entering new markets; and general economic conditions. For a further discussion of the risks relating to our business, see Item 1A, "Risk Factors," in our Annual Report on Form 10-K for the year ended December 31, ~~2019 as well as Part II, Item 1A of our Quarterly Reports on Form 10-Q for the quarters ended March 29, 2020 and June 28, 2020, and of this report.~~2020. We expressly disclaim any obligation to update these forward-looking statements, except as otherwise specifically stated by us or as required by law or regulation.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

There have been no material changes to the information set forth in Part II, Item 7A of our Annual Report on Form 10-K for the year ended December 31, ~~2019.~~2020.

Item 4. Controls and Procedures

(a) Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures as of the end of the period covered by this report are functioning effectively to provide reasonable assurance that the information required to be disclosed by us in reports filed under the Securities Exchange Act of 1934 is (i) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) accumulated and communicated to our management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding disclosure. A controls system cannot provide absolute assurance that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.

(b) Change in Internal Control over Financial Reporting

No change in our internal control over financial reporting occurred during our most recently completed fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II — OTHER INFORMATION

Item 1. Legal Proceedings

We are party to various lawsuits and claims arising in the normal course of business. These lawsuits and claims include actions involving product liability and product warranty, commercial disputes, intellectual property, contract, employment, environmental and other matters. As of ~~September 27, 2020~~March 28, 2021 and December 31, ~~2019,~~2020, we have accrued liabilities of approximately ~~$0.2~~$0.4 million and ~~$0.4~~$0.3 million, respectively, in connection with these matters, representing our best estimate of the cost within the range of estimated possible loss that will be incurred to resolve these matters. Based on information currently available, advice of counsel, established reserves and other resources, we do not believe that the outcome of any outstanding lawsuits or claims is likely to be, individually or in the aggregate, material to our business, financial condition, results of operations or liquidity. However, in the event of unexpected further developments, it is possible that the ultimate resolution of these matters, or other similar matters, if unfavorable, may be materially adverse to our business, financial condition, results of operations or liquidity.

Item 1A. Risk Factors

See the information set forth in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, ~~2019 and Part II, Item 1A of our Quarterly Reports on Form 10-Q for the quarters ended March 29, 2020 and June 28,~~ 2020. There have been no significant changes in risk factors for the quarter ended September 27, 2020 except as set forth below. The risk factor set forth below replaces in their entireties the risk factors in our Annual Report on Form 10-K for the year ended December 31, 2019 with the title “Our results of operations and financial condition may be adversely affected by public health epidemics, including the novel coronavirus reported to have originated in Wuhan, China,” and in our Quarterly Reports on Form 10-Q for the quarters ended March ~~29, 2020 and June~~ 28, ~~2020 with the title “Our results of operations and financial condition may be adversely affected by public health epidemics, including the ongoing COVID-19 global health pandemic.”:~~

~~Our results of operations and financial condition may be adversely affected by public health epidemics, including the ongoing COVID-19 global health pandemic.~~

On March 11, 2020, the World Health Organization declared the global outbreak of COVID-19 to be a pandemic. The COVID-19 pandemic has significantly impacted economic activity and markets around the world. If the pandemic continues and conditions worsen, particularly if the virus becomes more prevalent over the fall and winter seasons in the Northern Hemisphere, it could negatively impact our business, results of operations, financial condition and liquidity in numerous ways, including, but not limited to, those outlined below:

•It has resulted, and we expect it will continue to result, in lower revenues in certain of our product categories, including our interventional urology (which revenues are primarily concentrated in our Americas segment), surgical, interventional, anesthesia and OEM product categories, in which we sell products largely utilized in elective procedures, which have been significantly reduced or suspended due to the pandemic.

•~~It has resulted in higher revenues in our respiratory and vascular access product categories. However, we are unable to predict how long this sustained demand will last or how significant it will be.~~

•It may cause disruptions in the manufacture of our products. We currently rely on our 35 manufacturing sites, with major manufacturing operations located in the Czech Republic, Germany, Malaysia, Mexico and the U.S., to manufacture our products. The COVID-19 pandemic, and/or the governmental or regulatory actions taken in response to COVID-19 pandemic, may interfere with our ability, or that of our employees or suppliers to perform our and their respective responsibilities and obligations relative to the conduct of our business and create a risk to our ability to manufacture our products in a timely manner, or at all. We have experienced and expect to continue to experience inefficiencies in our manufacturing operations due to government-mandated and self-imposed restrictions placed on facilities in certain locations primarily in North America and Asia. Additionally, we have experienced and continue to experience a higher than normal level of absenteeism across our global manufacturing sites. In an effort to increase the wider availability of needed medical device products, we may elect to, or the government may require us to, allocate manufacturing capacity (for example, pursuant to the U.S. Defense Production Act) in a way that adversely affects our regular operations and financial results, results in differential treatment of customers and/or adversely affects our customer relationships and reputation.

•While we have not experienced significant payment defaults by, or identified other significant collectability concerns with, our customers to date, we may be adversely impacted by delays in payments of outstanding

receivables if our customers experience financial difficulties or are unable to borrow money to fund their operations, which may adversely impact their ability to pay for our products on a timely basis, if at all.

•The COVID-19 pandemic, including related illness, border closures, travel restrictions, quarantines, lockdowns or other workforce disruptions, could disrupt our suppliers or our suppliers’ suppliers and/or the distribution of our products, whether through our direct sales force or our distributors. These disruptions, or our failure to respond to them, could increase manufacturing or distribution costs or cause delays in delivering, or an inability to deliver, products to our customers.

•The COVID-19 pandemic has increased volatility and pricing in the capital markets, and volatility if likely to continue. We might not be able to continue to access preferred sources of liquidity when we would like, and our borrowing costs could increase.

These and other impacts of the COVID-19 pandemic, or other pandemics or epidemics, could have the effect of heightening many of the other risks described in the Risk Factors section of our Annual Report on Form 10-K for the year ended December 31, 2019. We might not be able to predict or respond to all impacts on a timely basis to prevent near- or long-term adverse impacts to our results. The severity, magnitude and duration of the COVID-19 pandemic is uncertain, rapidly changing and hard to predict. We do not yet know the full extent of potential delays or impacts on our business, our results of operations or financial condition or on healthcare systems or the global economy as a whole. However, these effects could have an adverse impact on our liquidity, capital resources, operations and business and those of the third parties on which we rely, and such impact could be material.2021.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Not applicable.

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

On October 27, 2020, James J. Leyden notified us that he will retire from the company on March 31, 2021 to pursue a career in public interest. Leading up to his retirement, Mr. Leyden will continue to serve in his current role as our Corporate Vice President, General Counsel and Secretary until December 31, 2020. Thereafter, Mr. Leyden will remain employed as a senior advisor until his retirement date to assist with the transition of his duties and responsibilities. From January 1, 2021 to his retirement date, Mr. Leyden’s base salary and benefits will be reduced to a level commensurate with his senior advisor role.

On October 27, 2020, our Board of Directors appointed Daniel V. Logue to succeed Mr. Leyden as Corporate Vice President, General Counsel and Secretary of Teleflex, effective January 1, 2021. Mr. Logue, who joined Teleflex in 2004, has served as Deputy General Counsel of the company since February 2017. Previously, Mr. Logue held the positions of Associate General Counsel from March 2013 to January 2017 and Assistant General Counsel from June 2004 to February 2013.Not applicable.

3325

Item 6. Exhibits

The following exhibits are filed as part of, or incorporated by reference into, this report:


Exhibit No.		Description

10.1	—	~~Employment Agreement, dated September 1, 2020, between Teleflex Medical Europe Limited and Mario Wijker.~~
~~10.2~~	—	Senior Executive Officer Severance Agreement, dated ~~September 1, 2020,~~February 25, 2021, between ~~Teleflex Medical Europe Limited~~the Company and ~~Mario Wijker~~.Jay White.
~~10.3~~10.2	—	Executive Change In Control Agreement, dated ~~September 1, 2020,~~February 25, 2021, between the Company and ~~Mario Wijker.~~Jay White.
31.1	—	Certification of Chief Executive Officer, pursuant to Rule 13a–14(a) under the Securities Exchange Act of 1934.
31.2	—	Certification of Chief Financial Officer, pursuant to Rule 13a–14(a) under the Securities Exchange Act of 1934.
32.1	—	Certification of Certification of Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	—	Certification of Certification of Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.1	—	The following materials from our Quarterly Report on Form 10-Q for the quarter ended ~~September 27, 2020,~~March 28, 2021, formatted in inline XBRL (eXtensible Business Reporting Language): (i) Cover Page; (ii) the Condensed Consolidated Statements of Income for the three ~~and nine~~ months ended ~~September 27, 2020~~March 28, 2021 and ~~September~~March 29, ~~2019;~~2020; (iii) the Condensed Consolidated Statements of Comprehensive Income for the three ~~and nine~~ months ended ~~September 27, 2020~~March 28, 2021 and ~~September~~March 29, ~~2019;~~2020; (iv) the Condensed Consolidated Balance Sheets as of ~~September 27, 2020~~March 28, 2021 and December 31, ~~2019;~~2020; (v) the Condensed Consolidated Statements of Cash Flows for the ~~nine~~three months ended ~~September 27, 2020~~March 28, 2021 and ~~September~~March 29, ~~2019;~~2020; (vi) the Condensed Consolidated Statements of Changes in Equity for the three ~~and nine~~ months ended ~~September 27, 2020~~March 28, 2021 and ~~September~~March 29, ~~2019;~~2020; and (vii) Notes to Condensed Consolidated Financial Statements.
104.1	—	The cover page of the Company's Quarterly Report on Form 10-Q for the quarter ended ~~September 27, 2020,~~March 28, 2021, formatted in inline XBRL (included in Exhibit 101.1).

3426

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

TELEFLEX INCORPORATED

By:

/s/ Liam J. Kelly

Liam J. Kelly

President and Chief Executive Officer

(Principal Executive Officer)

By:

/s/ Thomas E. Powell

Thomas E. Powell

Executive Vice President and Chief Financial Officer

(Principal Financial Officer)

Dated: ~~October~~April 29, ~~2020~~2021

3527


Three Months Ended September 29, 2019
	Termination benefits		Other costs (1)		Total
	(Dollars in thousands)
2019 Footprint realignment plan	$	584	$	38	$	622
2018 Footprint realignment plan	315		74		389
Other restructuring programs (3)	7		250		257
Restructuring charges	$	906	$	362	$	1,268


Nine Months Ended September 29, 2019
	Termination benefits		Other costs (1)		Total
	(Dollars in thousands)
2019 Footprint realignment plan	$	13,100	$	68	$	13,168
2018 Footprint realignment plan	(1,523)		782		(741)
Other restructuring programs (3)	195		815		1,010
Restructuring charges	11,772		1,665		13,437
Asset impairment charges	0		6,911		6,911
Restructuring and impairment charges	$	11,772	$	8,576	$	20,348


			Payments due by period
	Total		Less than 1 year		1-3 years		3-5 years		More than 5 years
			(Dollars in millions)
Total borrowings	$	2,148.0	$	91.8	$	61.2	$	595.0	$	1,400.0
Interest obligations (1)	486.1		78.6		154.0		134.1		119.4