Exhibit 99.1
Jake Elguicze Treasurer and Vice President of Investor Relations
610-948-2836
FOR IMMEDIATE RELEASE July 28, 2016
TELEFLEX REPORTS SECOND QUARTER 2016 RESULTS
Second Quarter Revenues of $473.6 million, Up 4.8% Versus Prior Year Period; Up 5.0% on Constant Currency Basis
Second Quarter GAAP Diluted EPS of $1.25, Up 34.4% Over the Prior Year Period
Second Quarter Adjusted Diluted EPS of $1.89, up 33.1%
Reaffirmed 2016 Guidance Ranges for As-Reported Revenue Growth of 3.0% to 4.0% and Constant Currency Revenue Growth of 5.0% to 6.0%
Raised 2016 Guidance Range for GAAP Diluted EPS from $5.32 to $5.37 to $5.34 to $5.41
Raised 2016 Guidance Range for Adjusted Diluted EPS from $7.10 to $7.25 to $7.20 to $7.32
Wayne, PA -- Teleflex Incorporated (NYSE: TFX) (the “Company”) today announced financial results for the second quarter ended June 26, 2016.
Second quarter 2016 net revenues were $473.6 million, an increase of 4.8% compared to the prior year period. Excluding the impact of foreign currency exchange rate fluctuations, second quarter 2016 net revenues increased 5.0% over the year ago period.
Second quarter 2016 GAAP diluted earnings per share from continuing operations increased 34.4% to $1.25, as compared to $0.93 in the prior year period. Second quarter 2016 adjusted diluted earnings per share from continuing operations increased 33.1% to $1.89, compared to $1.42 in the prior year period.
“As we anticipated, Teleflex's second quarter GAAP and constant currency revenue growth reflected improving trends on both a year-over-year and sequential basis, led by our key North American strategic business units,” said Benson Smith, Chairman and Chief Executive Officer. “The revenue growth performance in the quarter positions the Company to achieve our previously provided full year 2016 GAAP and constant currency revenue growth guidance ranges. In addition, we were particularly pleased with our strong earnings per share performance for the quarter, which was primarily due to our continued expansion of gross and operating margins."
Added Smith, "Based on this performance and our outlook for the remainder of the year, we are increasing our full year GAAP earnings per share guidance range from $5.32 to $5.37 to $5.34 to $5.41 and our adjusted diluted earnings per share guidance range from $7.10 to $7.25 to $7.20 to $7.32."
SECOND QUARTER NET REVENUE BY SEGMENT
The following table provides information regarding net revenues in each of the Company's reportable operating segments and all of its other operating segments for the three months ended June 26, 2016 and June 28, 2015 on both a GAAP and constant currency basis. The discussion below the table of the principal factors behind changes in net revenues for the three months ended June 26, 2016 as compared to the prior year period applies to both GAAP revenue and constant currency revenue, although GAAP revenue also was affected by foreign currency exchange rate fluctuations, as indicated in the "Foreign Currency" column of the table.
|
| | | | | | | | | | | | | | |
| | Three Months Ended | | % Increase/ (Decrease) |
| | June 26, 2016 | | June 28, 2015 | | Constant Currency | | Foreign Currency | | Total Change |
| | | (Dollars in millions) | | | | | | |
| Vascular North America | $ | 88.2 | | $ | 81.2 | | 8.8 | % | | (0.2) | % | | 8.6 | % |
| Surgical North America | | 43.1 | | | 40.5 | | 6.8 | % | | (0.3) | % | | 6.5 | % |
| Anesthesia North America | | 49.2 | | | 45.6 | | 8.2 | % | | (0.3) | % | | 7.9 | % |
| EMEA | | 131.7 | | | 129.1 | | 1.3 | % | | 0.7 | % | | 2.0 | % |
| Asia | | 63.2 | | | 62.1 | | 3.6 | % | | (1.7) | % | | 1.9 | % |
| OEM | | 40.3 | | | 37.9 | | 5.9 | % | | 0.4 | % | | 6.3 | % |
| All Other | | 57.9 | | | 55.7 | | 5.4 | % | | (1.4) | % | | 4.0 | % |
| Total | $ | 473.6 | | $ | 452.1 | | 5.0 | % | | (0.2) | % | | 4.8 | % |
Vascular North America second quarter 2016 net revenues were $88.2 million, an increase of 8.6% compared to the prior year period. Excluding the impact of foreign currency fluctuations, second quarter 2016 net revenues increased 8.8% compared to the prior year period. The increase in revenue was largely due to higher sales volumes of existing products, price increases and an increase in new product sales.
Surgical North America second quarter 2016 net revenues were $43.1 million, an increase of 6.5% compared to the prior year period. Excluding the impact of foreign currency fluctuations, second quarter 2016 net revenues increased 6.8% compared to the prior year period. The increase in revenue was largely due to an increase in new product sales, higher sales volumes of existing products and price increases.
Anesthesia North America second quarter 2016 net revenues were $49.2 million, an increase of 7.9% compared to the prior year period. Excluding the impact of foreign currency fluctuations, second quarter 2016 net revenues increased 8.2% compared to the prior year period. The increase in revenue was largely due to higher sales volumes of existing products and an increase in new product sales.
EMEA second quarter 2016 net revenues were $131.7 million, an increase of 2.0% compared to the prior year period. Excluding the impact of foreign currency fluctuations, second quarter 2016 net revenues increased 1.3% compared to the prior year period. The increase in revenue was largely due to higher sales volumes of existing products and an increase in new product sales, somewhat offset by a decline in the average selling prices of products.
Asia second quarter 2016 net revenues were $63.2 million, an increase of 1.9% compared to the prior year period. Excluding the impact of foreign currency fluctuations, second quarter 2016 net revenues increased 3.6% compared to the prior year period. The increase in revenue was largely due to higher sales volumes of existing products.
OEM and Development Services (“OEM”) second quarter 2016 net revenues were $40.3 million, an increase of 6.3% compared to the prior year period. Excluding the impact of foreign currency fluctuations, second quarter 2016 net revenues increased 5.9% compared to the prior year period. The increase in revenue was largely due to an increase in new product sales and higher sales volumes of existing products.
OTHER FINANCIAL HIGHLIGHTS AND KEY PERFORMANCE METRICS
Depreciation expense, amortization of intangible assets and deferred financing charges for the first six months of 2016 aggregated $64.6 million compared to $60.6 million for the prior year period.
Cash and cash equivalents at June 26, 2016 were $476.5 million compared to $338.4 million at December 31, 2015.
Net accounts receivable at June 26, 2016 were $273.5 million compared to $262.4 million at December 31, 2015.
Net inventories at June 26, 2016 were $338.5 million compared to $330.3 million at December 31, 2015.
2016 OUTLOOK
The Company reaffirmed its estimates that revenues for full year 2016 are expected to increase 3.0% to 4.0% over prior year on a GAAP basis, and 5.0% to 6.0% on a constant currency basis.
The Company increased its full year 2016 GAAP diluted earnings per share from continuing operations guidance from a range of $5.32 to $5.37 to a range of $5.34 to $5.41. This new range represents an increase of 8.8% to 10.2% over 2015. In addition, the Company increased its full year 2016 adjusted diluted earnings per share from continuing operations guidance from a range of $7.10 to $7.25 to a range of $7.20 to $7.32. This new range represents an increase of 13.7% to 15.6% over 2015, which reflects our expectation that foreign currencies will have an approximately neutral impact on adjusted earnings per share.
FORECASTED 2016 CONSTANT CURRENCY REVENUE GROWTH RECONCILIATION
|
| | | | |
| | Low | High |
| | | |
| Forecasted 2016 GAAP revenue growth | 3.0 | % | 4.0 | % |
| | | |
| Estimated impact of foreign currency fluctuations | 2.0 | % | 2.0 | % |
| | | |
| Forecasted 2016 constant currency revenue growth | 5.0 | % | 6.0 | % |
FORECASTED 2016 ADJUSTED EARNINGS PER SHARE RECONCILIATION
|
| | | | | | | | |
| | Low | High |
| | | |
| Diluted earnings per share attributable to common shareholders |
| $5.34 |
| |
| $5.41 |
| |
| | | |
| Restructuring, impairment charges and special items, net of tax |
| $0.83 |
| |
| $0.86 |
| |
| | | |
| Intangible amortization expense, net of tax |
| $0.95 |
| |
| $0.97 |
| |
| | | |
| Amortization of debt discount on convertible notes, net of tax |
| $0.08 |
| |
| $0.08 |
| |
| | | |
| Adjusted diluted earnings per share |
| $7.20 |
| |
| $7.32 |
| |
CONFERENCE CALL WEBCAST AND ADDITIONAL INFORMATION
As previously announced, Teleflex will comment on its financial results on a conference call to be held today at 8:00 a.m. (ET). The call will be available live and archived on the company’s website at www.teleflex.com and the accompanying presentation will be posted prior to the call. An audio replay will be available until August 2, 2016 at 11:59pm (ET), by calling 855-859-2056 (U.S./Canada) or 404-537-3406 (International), Passcode: 47983139.
ADDITIONAL NOTES
References in this release to the impact of foreign currency on adjusted diluted earnings per share include both the impact of translating foreign currencies into U.S. dollars and the impact of foreign currency exchange rate fluctuations on foreign currency denominated transactions.
In the discussion of segment results, "new products" refers to products we have sold for 36 months or less, and "existing products" refers to products we have sold for more than 36 months.
Certain financial information is presented on a rounded basis, which may cause minor differences.
Segment results and commentary exclude the impact of discontinued operations.
NOTES ON NON-GAAP FINANCIAL MEASURES
This press release includes certain non-GAAP financial measures, which include:
Adjusted diluted earnings per share. This measure excludes, depending on the period presented (i) restructuring and other impairment charges; (ii) certain losses and other charges, including charges related to facility consolidations and acquisitions and integration costs, net of the gain on sale of an asset and reversal of charges related to contingent consideration and a litigation verdict against the Company with respect to a non-operating joint venture; (iii) amortization of the debt discount on the Company’s convertible notes; (iv) intangible amortization expense; (v) loss on extinguishment of debt; and (vi) tax benefits resulting primarily from the resolution of audits of prior year returns and tax law changes affecting the Company's deferred tax liability. In addition, the calculation of diluted shares within adjusted earnings per share gives effect to the anti-dilutive impact of the Company’s convertible note hedge agreements, which reduce the potential
economic dilution that otherwise would occur upon conversion of the Company’s senior subordinated convertible notes (under GAAP, the anti-dilutive impact of the convertible note hedge agreements is not reflected in diluted shares).
Constant currency revenue growth. This measure excludes the impact of translating the results of international subsidiaries at different currency exchange rates from period to period.
Management believes these measures are useful to investors because they eliminate items that do not reflect Teleflex’s day-to-day operations. In addition, management believes that the calculation of non-GAAP diluted shares is useful to investors because it provides insight into the offsetting economic effect of the convertible note hedge against conversions of the convertible notes. Management uses these financial measures for internal managerial purposes, when publicly providing guidance on possible future results, and to assist in our evaluation of period-to-period comparisons. These financial measures are presented in addition to results presented in accordance with generally accepted accounting principles (“GAAP”) and should not be relied upon as a substitute for GAAP financial measures. Tables reconciling historical adjusted diluted earnings per share to historical GAAP earnings per share are set forth below. Tables reconciling constant currency net revenues to GAAP net revenues and reconciling forecasted non-GAAP measures to the most directly comparable forecasted GAAP measures are set forth above.
RECONCILIATION OF CONSOLIDATED STATEMENT OF INCOME ITEMS
Dollars in millions, except per share amounts |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Quarter Ended – June 26, 2016 | | | | | | | | |
| | Cost of goods sold | Selling, general and administrative expenses | Research and development expenses | Restructuring and other impairment charges | (Gain) loss on sale of business and assets | Interest expense, net | Loss on extinguishment of debt, net | Income taxes | Net income (loss) attributable to common shareholders from continuing operations | Diluted earnings per share available to common shareholders | Shares used in calculation of GAAP and adjusted earnings per share |
| GAAP Basis |
| $217.2 |
|
| $143.0 |
|
| $15.5 |
|
| ($0.1 | ) |
| ($0.4 | ) |
| $11.8 |
|
| $19.3 |
|
| $8.0 |
|
| $59.1 |
|
| $1.25 |
| 47,246 |
|
| Adjustments | | | | | | | | | | | |
| Restructuring and other impairment charges | — |
| — |
| — |
| (0.1 | ) | — |
| — |
| — |
| 0.1 |
| (0.2 | ) | — |
| — |
|
| Losses and other charges, net (A) | 4.0 |
| 1.2 |
| 0.0 |
| — |
| (0.4 | ) | — |
| — |
| 1.9 |
| 2.9 |
|
| $0.07 |
| — |
|
| Amortization of debt discount on convertible notes | — |
| — |
| — |
| — |
| — |
| 1.4 |
| — |
| 0.5 |
| 0.9 |
|
| $0.02 |
| — |
|
| Intangible amortization expense | — |
| 15.9 |
| 0.1 |
| — |
| — |
| — |
| — |
| 4.3 |
| 11.8 |
|
| $0.25 |
| — |
|
| Loss on extinguishment of debt, net | — |
| — |
| — |
| — |
| — |
| — |
| 19.3 |
| 7.0 |
| 12.2 |
|
| $0.26 |
| — |
|
| Tax adjustment (B) | — |
| — |
| — |
| — |
| — |
| — |
| — |
| 0.5 |
| (0.5 | ) |
| ($0.01 | ) | — |
|
| Shares due to Teleflex under note hedge (C) | — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
|
| $0.07 |
| (1,675 | ) |
| Adjusted basis |
| $213.2 |
|
| $125.9 |
|
| $15.3 |
| — |
| — |
|
| $10.3 |
| — |
|
| $22.4 |
|
| $86.2 |
|
| $1.89 |
| 45,571 |
|
| Quarter Ended – June 28, 2015 | | | | | | | | | |
| | Cost of goods sold | Selling, general and administrative expenses | Research and development expenses | Restructuring and other impairment charges | (Gain) loss on sale of business and assets | Interest expense, net | Loss on extinguishment of debt, net | Income taxes | Net income (loss) attributable to common shareholders from continuing operations | Diluted earnings per share available to common shareholders | Shares used in calculation of GAAP and adjusted earnings per share |
| GAAP Basis |
| $218.8 |
|
| $142.2 |
|
| $13.4 |
|
| $0.6 |
| — |
|
| $16.1 |
|
| $10.5 |
|
| $5.3 |
|
| $44.8 |
|
| $0.93 |
| 48,081 |
|
| Adjustments | | | | | | | | | | | |
| Restructuring and other impairment charges | — |
| — |
| — |
| 0.6 |
| — |
| — |
| — |
| 0.2 |
| 0.4 |
|
| $0.01 |
| — |
|
| Losses and other charges, net (A) | 3.1 |
| (3.4 | ) | — |
| — |
| — |
| — |
| — |
| 0.6 |
| (0.9 | ) |
| ($0.03 | ) | — |
|
| Amortization of debt discount on convertible notes | — |
| — |
| — |
| — |
| — |
| 3.3 |
| — |
| 1.2 |
| 2.1 |
|
| $0.04 |
| — |
|
| Intangible amortization expense | — |
| 15.1 |
| — |
| — |
| — |
| — |
| — |
| 4.1 |
| 10.9 |
|
| $0.23 |
| — |
|
| Loss on extinguishment of debt, net | — |
| — |
| — |
| — |
| — |
| — |
| 10.5 |
| 3.8 |
| 6.6 |
|
| $0.14 |
| — |
|
| Tax adjustment (B) | — |
| — |
| — |
| — |
| — |
| — |
| — |
| 0.3 |
| (0.3 | ) |
| ($0.01 | ) | — |
|
| Shares due to Teleflex under note hedge (C) | — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
|
| $0.10 |
| (3,366 | ) |
| Adjusted basis |
| $215.7 |
|
| $130.6 |
|
| $13.4 |
| — |
| — |
|
| $12.8 |
| — |
|
| $15.5 |
|
| $63.5 |
|
| $1.42 |
| 44,715 |
|
(A) In 2016, losses and other charges, net related primarily to facility consolidations. In 2015, adjustments to losses and other charges, net resulted in a small decrease in adjusted net income and diluted earnings per share because the GAAP financial statements included reversals of charges related to contingent consideration liabilities and a litigation verdict against the Company with respect to a non-operating joint venture; the sum of these reversals exceeded the sum of acquisition and integration costs, and charges related to facility consolidations.
(B) The tax adjustment represents a net benefit resulting primarily from (1) the resolution of audits of prior year returns and (2) tax law changes affecting our deferred tax liability.
(C) Adjusted diluted shares are calculated by giving effect to the anti-dilutive impact of the Company’s convertible note hedge agreements, which reduce the potential economic dilution that otherwise would occur upon conversion of the Company's convertible notes. Under GAAP, the anti-dilutive impact of the convertible note hedge agreements is not reflected in diluted shares.
RECONCILIATION OF CONSOLIDATED STATEMENT OF INCOME ITEMS
Dollars in millions, except per share amounts |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Year-to-date Ended – June 26, 2016 | | | | | | | | |
| | Cost of goods sold | Selling, general and administrative expenses | Research and development expenses | Restructuring and other impairment charges | (Gain) loss on sale of business and assets | Interest expense, net | Loss on extinguishment of debt, net | Income taxes | Net income (loss) attributable to common shareholders from continuing operations | Diluted earnings per share available to common shareholders | Shares used in calculation of GAAP and adjusted earnings per share |
| GAAP Basis |
| $416.9 |
|
| $279.3 |
|
| $27.8 |
|
| $9.8 |
|
| ($1.4 | ) |
| $25.5 |
|
| $19.3 |
|
| $10.6 |
|
| $110.1 |
|
| $2.29 |
| 48,014 |
|
| Adjustments | | | | | | | | | | | |
| Restructuring and other impairment charges | — |
| — |
| — |
| 9.8 |
| — |
| — |
| — |
| 2.4 |
| 7.4 |
|
| $0.15 |
| — |
|
| Losses and other charges, net (A) | 6.6 |
| 1.8 |
| 0.0 |
| — |
| (1.4 | ) | — |
| — |
| 2.8 |
| 4.4 |
|
| $0.08 |
| — |
|
| Amortization of debt discount on convertible notes | — |
| — |
| — |
| — |
| — |
| 4.9 |
| — |
| 1.8 |
| 3.1 |
|
| $0.06 |
| — |
|
| Intangible amortization expense | — |
| 31.2 |
| 0.2 |
| — |
| — |
| — |
| — |
| 8.4 |
| 23.0 |
|
| $0.48 |
| — |
|
| Loss on extinguishment of debt, net | — |
| — |
| — |
| — |
| — |
| — |
| 19.3 |
| 7.0 |
| 12.2 |
|
| $0.25 |
| — |
|
| Tax adjustment (B) | — |
| — |
| — |
| — |
| — |
| — |
| — |
| 5.5 |
| (5.5 | ) |
| ($0.11 | ) | — |
|
| Shares due to Teleflex under note hedge (C) | — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
|
| $0.19 |
| (2,648 | ) |
| Adjusted basis |
| $410.3 |
|
| $246.3 |
|
| $27.6 |
| — |
| — |
|
| $20.6 |
| — |
|
| $38.5 |
|
| $154.7 |
|
| $3.41 |
| 45,366 |
|
| Year-to-date Ended – June 28, 2015 | | | | | | | | | |
| | Cost of goods sold | Selling, general and administrative expenses | Research and development expenses | Restructuring and other impairment charges | (Gain) loss on sale of business and assets | Interest expense, net | Loss on extinguishment of debt, net | Income taxes | Net income (loss) attributable to common shareholders from continuing operations | Diluted earnings per share available to common shareholders | Shares used in calculation of GAAP and adjusted earnings per share |
| GAAP Basis |
| $425.6 |
|
| $281.9 |
|
| $26.3 |
|
| $5.0 |
| — |
|
| $33.1 |
|
| $10.5 |
|
| $14.6 |
|
| $83.8 |
|
| $1.76 |
| 47,688 |
|
| Adjustments | | | | | | | | | | | |
| Restructuring and other impairment charges | — |
| — |
| — |
| 5.0 |
| — |
| — |
| — |
| 1.8 |
| 3.2 |
|
| $0.07 |
| — |
|
| Losses and other charges, net (A) | 5.2 |
| (2.5 | ) | — |
| — |
| — |
| — |
| — |
| 1.4 |
| 1.3 |
|
| $0.02 |
| — |
|
| Amortization of debt discount on convertible notes | — |
| — |
| — |
| — |
| — |
| 6.5 |
| — |
| 2.4 |
| 4.1 |
|
| $0.09 |
| — |
|
| Intangible amortization expense | — |
| 29.8 |
| — |
| — |
| — |
| — |
| — |
| 7.9 |
| 21.9 |
|
| $0.46 |
| — |
|
| Loss on extinguishment of debt, net | — |
| — |
| — |
| — |
| — |
| — |
| 10.5 |
| 3.8 |
| 6.6 |
|
| $0.14 |
| — |
|
| Tax adjustment (B) | — |
| — |
| — |
| — |
| — |
| — |
| — |
| 0.2 |
| (0.2 | ) |
| $0.00 |
| — |
|
| Shares due to Teleflex under note hedge (C) | — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
| — |
|
| $0.19 |
| (3,211 | ) |
| Adjusted basis |
| $420.4 |
|
| $254.6 |
|
| $26.3 |
| — |
| — |
|
| $26.6 |
| — |
|
| $32.1 |
|
| $120.8 |
|
| $2.72 |
| 44,477 |
|
(A) In 2016, losses and other charges, net related primarily to facility consolidations. In 2015, losses and other charges, net related primarily to acquisition and integration costs, and charges related to facility consolidations, somewhat offset by reversals of charges related to contingent consideration liabilities and a litigation verdict against the Company with respect to a non-operating joint venture.
(B) The tax adjustment represents a net benefit resulting primarily from (1) the resolution of audits of prior year returns and (2) tax law changes affecting our deferred tax liability.
(C) Adjusted diluted shares are calculated by giving effect to the anti-dilutive impact of the Company’s convertible note hedge agreements, which reduce the potential economic dilution that otherwise would occur upon conversion of the Company's convertible notes. Under GAAP, the anti-dilutive impact of the convertible note hedge agreements is not reflected in diluted shares.
ABOUT TELEFLEX INCORPORATED
Teleflex is a global provider of medical technologies designed to improve the health and quality of people’s lives. We apply purpose driven innovation - a relentless pursuit of identifying unmet clinical needs - to benefit patients and healthcare providers. Our portfolio is diverse, with solutions in the fields of vascular and interventional access, surgical, anesthesia, cardiac care, urology, emergency medicine and respiratory care. Teleflex employees worldwide are united in the understanding that what we do every day makes a difference. For more information, please visit teleflex.com.
Teleflex is the home of Arrow®, Deknatel®, Hudson RCI®, LMA®, Pilling®, Rusch® and Weck® - trusted brands united by a common sense of purpose.
CAUTION CONCERNING FORWARD-LOOKING INFORMATION
This press release contains forward-looking statements, including, but not limited to, forecasted 2016 GAAP and constant currency revenue growth and GAAP and adjusted diluted earnings per share. Actual results could differ materially from those in the forward-looking statements due to, among other things, conditions in the end markets we serve, customer reaction to new products and programs, our ability to achieve sales growth, price increases or cost reductions; changes in the reimbursement practices of third party payors; our ability to realize efficiencies and to execute on our strategic initiatives; changes in material costs and surcharges; market acceptance and unanticipated difficulties in connection with the introduction of new products and product line extensions; product recalls; unanticipated difficulties in connection with the consolidation of manufacturing and administrative functions, including as a result of difficulties with various employees, labor representatives or regulators; the loss of skilled employees in connection with such initiatives; unanticipated difficulties, expenditures and delays in complying with government regulations applicable to our businesses; the impact of government healthcare reform legislation; our ability to meet our debt obligations; changes in general and international economic conditions, including fluctuations in foreign currency exchange rates and the impact of the United Kingdom's vote to leave the European Union; and other factors described or incorporated in our filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the year ended December 31, 2015.
TELEFLEX INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
|
| | | | | | | | | | | | | | | |
| | Three Months Ended | | Six Months Ended |
| | June 26, 2016 | | June 28, 2015 | | June 26, 2016 | | June 28, 2015 |
| | (Dollars and shares in thousands, except per share) |
| Net revenues | $ | 473,553 |
| | $ | 452,045 |
| | $ | 898,446 |
| | $ | 881,475 |
|
| Cost of goods sold | 217,154 |
| | 218,808 |
| | 416,900 |
| | 425,601 |
|
| Gross profit | 256,399 |
| | 233,237 |
| | 481,546 |
| | 455,874 |
|
| Selling, general and administrative expenses | 142,983 |
| | 142,228 |
| | 279,331 |
| | 281,925 |
|
| Research and development expenses | 15,472 |
| | 13,443 |
| | 27,825 |
| | 26,327 |
|
| Restructuring charges | (119 | ) | | 580 |
| | 9,849 |
| | 5,028 |
|
| Gain on sale of assets | (378 | ) | | — |
| | (1,397 | ) | | — |
|
| Income from continuing operations before interest and taxes | 98,441 |
| | 76,986 |
| | 165,938 |
| | 142,594 |
|
| Interest expense | 11,907 |
| | 16,207 |
| | 25,691 |
| | 33,379 |
|
| Interest income | (129 | ) | | (154 | ) | | (209 | ) | | (323 | ) |
| Loss on extinguishment of debt | 19,261 |
| | 10,454 |
| | 19,261 |
| | 10,454 |
|
| Income from continuing operations before taxes | 67,402 |
| | 50,479 |
| | 121,195 |
| | 99,084 |
|
| Taxes on income from continuing operations | 8,007 |
| | 5,280 |
| | 10,620 |
| | 14,612 |
|
| Income from continuing operations | 59,395 |
| | 45,199 |
| | 110,575 |
| | 84,472 |
|
| Operating income (loss) from discontinued operations | 6 |
| | (145 | ) | | (376 | ) | | (644 | ) |
| (Benefit) taxes on loss from discontinued operations | (187 | ) | | 45 |
| | (257 | ) | | 249 |
|
| Income (loss) from discontinued operations | 193 |
| | (190 | ) | | (119 | ) | | (893 | ) |
| Net income | 59,588 |
| | 45,009 |
| | 110,456 |
| | 83,579 |
|
Less: Income from continuing operations attributable to
noncontrolling interest | 285 |
| | 446 |
| | 464 |
| | 664 |
|
| Net income attributable to common shareholders | $ | 59,303 |
| | $ | 44,563 |
| | $ | 109,992 |
| | $ | 82,915 |
|
| Earnings per share available to common shareholders: | | | | | | | |
| Basic: | | | | | | | |
| Income from continuing operations | $ | 1.36 |
| | $ | 1.08 |
| | $ | 2.58 |
| | $ | 2.02 |
|
| Income (loss) from discontinued operations | — |
| | (0.01 | ) | | — |
| | (0.02 | ) |
| Net income | $ | 1.36 |
| | $ | 1.07 |
| | $ | 2.58 |
| | $ | 2.00 |
|
| Diluted: | | | | | | | |
| Income from continuing operations | $ | 1.25 |
| | $ | 0.93 |
| | $ | 2.29 |
| | $ | 1.76 |
|
| Income (loss) from discontinued operations | 0.01 |
| | — |
| | — |
| | (0.02 | ) |
| Net income | $ | 1.26 |
| | $ | 0.93 |
| | $ | 2.29 |
| | $ | 1.74 |
|
| Dividends per share | $ | 0.34 |
| | $ | 0.34 |
| | $ | 0.68 |
| | $ | 0.68 |
|
| Weighted average common shares outstanding | | | | | | | |
| Basic | 43,549 |
| | 41,560 |
| | 42,598 |
| | 41,514 |
|
| Diluted | 47,246 |
| | 48,081 |
| | 48,014 |
| | 47,688 |
|
| Amounts attributable to common shareholders: | | | | | | | |
| Income from continuing operations, net of tax | $ | 59,110 |
| | $ | 44,753 |
| | $ | 110,111 |
| | $ | 83,808 |
|
| Income (loss) from discontinued operations, net of tax | 193 |
| | (190 | ) | | (119 | ) | | (893 | ) |
| Net income | $ | 59,303 |
| | $ | 44,563 |
| | $ | 109,992 |
| | $ | 82,915 |
|
TELEFLEX INCORPORATED
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
|
| | | | | | | |
| | June 26, 2016 | | December 31, 2015 |
| | (Dollars in thousands) |
| ASSETS | | | |
| Current assets | | | |
| Cash and cash equivalents | $ | 476,490 |
| | $ | 338,366 |
|
| Accounts receivable, net | 273,530 |
| | 262,416 |
|
| Inventories, net | 338,465 |
| | 330,275 |
|
| Prepaid expenses and other current assets | 35,841 |
| | 34,915 |
|
| Prepaid taxes | 30,369 |
| | 30,895 |
|
| Assets held for sale | 7,026 |
| | 6,972 |
|
| Total current assets | 1,161,721 |
| | 1,003,839 |
|
| Property, plant and equipment, net | 314,665 |
| | 316,123 |
|
| Goodwill | 1,301,348 |
| | 1,295,852 |
|
| Intangible assets, net | 1,175,098 |
| | 1,199,975 |
|
| Investments in affiliates | 244 |
| | 152 |
|
| Deferred tax assets | 1,985 |
| | 2,341 |
|
| Other assets | 45,146 |
| | 53,492 |
|
| Total assets | $ | 4,000,207 |
| | $ | 3,871,774 |
|
| LIABILITIES AND EQUITY | | | |
| Current liabilities | | | |
| Current borrowings | $ | 173,952 |
| | $ | 417,350 |
|
| Accounts payable | 72,787 |
| | 66,305 |
|
| Accrued expenses | 63,396 |
| | 64,017 |
|
| Current portion of contingent consideration | 7,453 |
| | 7,291 |
|
| Payroll and benefit-related liabilities | 71,059 |
| | 84,658 |
|
| Accrued interest | 5,688 |
| | 7,480 |
|
| Income taxes payable | 12,957 |
| | 8,059 |
|
| Other current liabilities | 16,512 |
| | 8,960 |
|
| Total current liabilities | 423,804 |
| | 664,120 |
|
| Long-term borrowings | 907,930 |
| | 641,850 |
|
| Deferred tax liabilities | 317,327 |
| | 315,983 |
|
| Pension and postretirement benefit liabilities | 143,992 |
| | 149,441 |
|
| Noncurrent liability for uncertain tax positions | 26,415 |
| | 40,400 |
|
| Other liabilities | 59,171 |
| | 48,887 |
|
| Total liabilities | 1,878,639 |
| | 1,860,681 |
|
| Commitments and contingencies |
| |
|
| Total common shareholders' equity | 2,119,350 |
| | 2,009,272 |
|
| Noncontrolling interest | 2,218 |
| | 1,821 |
|
| Total equity | 2,121,568 |
| | 2,011,093 |
|
| Total liabilities and equity | $ | 4,000,207 |
| | $ | 3,871,774 |
|
TELEFLEX INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited) |
| | | | | | | |
| | Six Months Ended |
| | June 26, 2016 | | June 28, 2015 |
| | (Dollars in thousands) |
| Cash flows from operating activities of continuing operations: | | | |
| Net income | $ | 110,456 |
| | $ | 83,579 |
|
| Adjustments to reconcile net income to net cash provided by operating activities: | | | |
| Loss from discontinued operations | 119 |
| | 893 |
|
| Depreciation expense | 26,609 |
| | 22,385 |
|
| Amortization expense of intangible assets | 31,397 |
| | 29,826 |
|
| Amortization expense of deferred financing costs and debt discount | 6,554 |
| | 8,421 |
|
| Loss on extinguishment of debt | 19,261 |
| | 10,454 |
|
| Gain on sale of assets | (1,397 | ) | | — |
|
| Changes in contingent consideration | 1,242 |
| | (2,293 | ) |
| Stock-based compensation | 7,949 |
| | 7,126 |
|
| Deferred income taxes, net | (1,292 | ) | | 625 |
|
| Other | (1,970 | ) | | (6,301 | ) |
| Changes in operating assets and liabilities, net of effects of acquisitions and disposals: | | | |
| Accounts receivable | (10,237 | ) | | (17,984 | ) |
| Inventories | (3,284 | ) | | (16,895 | ) |
| Prepaid expenses and other current assets | 238 |
| | 921 |
|
| Accounts payable and accrued expenses | (3,500 | ) | | (2,966 | ) |
| Income taxes receivable and payable, net | (657 | ) | | (8,203 | ) |
| Net cash provided by operating activities from continuing operations | 181,488 |
| | 109,588 |
|
| Cash flows from investing activities of continuing operations: | | | |
| Expenditures for property, plant and equipment | (19,535 | ) | | (31,321 | ) |
| Proceeds from sale of assets | 3,985 |
| | — |
|
| Payments for businesses and intangibles acquired, net of cash acquired | (3,117 | ) | | (37,559 | ) |
| Investment in affiliates | — |
| | — |
|
| Net cash used in investing activities from continuing operations | (18,667 | ) | | (68,880 | ) |
| Cash flows from financing activities of continuing operations: | | | |
| Proceeds from new borrowings | 665,000 |
| | 288,100 |
|
| Reduction in borrowings | (656,479 | ) | | (250,981 | ) |
| Debt extinguishment, issuance and amendment fees | (8,182 | ) | | (8,746 | ) |
| Net proceeds from share based compensation plans and the related tax impacts | 6,593 |
| | 4,843 |
|
| Payments to noncontrolling interest shareholders | — |
| | (832 | ) |
| Payments for contingent consideration | (133 | ) | | (3,989 | ) |
| Dividends paid | (28,998 | ) | | (28,234 | ) |
| Net cash (used in) provided by financing activities from continuing operations | (22,199 | ) | | 161 |
|
| Cash flows from discontinued operations: | | | |
| Net cash used in operating activities | (1,183 | ) | | (1,363 | ) |
| Net cash used in discontinued operations | (1,183 | ) | | (1,363 | ) |
| Effect of exchange rate changes on cash and cash equivalents | (1,315 | ) | | (17,732 | ) |
| Net increase in cash and cash equivalents | 138,124 |
| | 21,774 |
|
| Cash and cash equivalents at the beginning of the period | 338,366 |
| | 303,236 |
|
| Cash and cash equivalents at the end of the period | $ | 476,490 |
| | $ | 325,010 |
|
| | | | |
| Non cash financing activities of continuing operations: | | | |
| Settlement and exchange of convertible notes with common or treasury stock | $ | 35,197 |
| | $ | 38 |
|
| Acquisition of treasury stock associated with settlement and exchange of convertible note hedge and warrant agreements | $ | 85,895 |
| | $ | 71 |
|
