TFX - Earnings call transcript Q1 2021

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Operator

Good day, and thank you for standing by. I would like to welcome you to the Teleflex, Inc., 2021 Conference Call. [Operator Instructions] I would now like to hand the conference over to your speaker today Jake Elguicze, Treasurer and Vice President of Investor Relations. Please go ahead, sir.

Jake Elguicze

Good morning, everyone, and welcome to the Teleflex, Inc., First Quarter 2021 Earnings Conference Call. slides at this www.teleflex.com. and on are release website our press to call accompany available The

open available XXX-XXXX As available and XXX-XXXX, and to be prepared on reminder, President Liam passcode and our dialing Officer. a this today’s website, a call XXXXXXX. Participating and Chairman, replay and call calls, for remarks, Kelly, Financial international or then will on be by (XXX) (XXX) are Executive Officer; call Thomas will Chief provide up Powell, Liam Chief Executive Q&A. and we’ll Vice the President Tom will

caution I’d actual include, the risks remind as that to, be events discussed actual events contain today and our in differ are, Before to our events cause on may press like we in with our such the call as statements of or forward-looking that outlined to as XX-K, which matters The in begin, and statements the Form are including will you accessed could conference are forward-looking to subject to fact, website. that uncertainties, release well but you our our future some materially. nature factors slides. regarding or referenced in and results in filings differ wish SEC, not materially results can factors limited We

trends, now additional to concerning is I’d like performance. this that, commentary During insights call statements in turn make these to community conference subsequent the over call, not you providing occur the Management with With the management intra-quarter business disclosures will to Liam. regarding quarters. hear provide may investment and

Liam Kelly

with everyone. It’s you good and today. pleasure a Jake, morning, to you, speak Thank

down our first COVID currency was second the quarter positive marks the of trends investment Adjusting deferrable quarter Interventional the approximately which COVID-XX in was performance, third we constant the the our The an currency first XXXX. earnings share improving This compared to growth prior million, the for XXXX, share which less of in since impacted on continued of was to days two the first Access we a the coupled Urology, X the expectations growth consecutive monthly underlying for adjusted and quarter Surgical. reflected of X.X% pandemic quarter procedures revenue year improvements of we QX X in February procedures, a the $X.XX headwinds. as call period per for significantly the $XXX.X We the Street. product provided perspective, expense operating revenue most and prudent growth most our during which to with From postponement of Interventional by constant management. quarter provided moved we first by XXXX modestly recovery on to categories rates saw to as quarter, exceeded Quarter constant are in the time delighted the community adjusted of expectations the X.X%, driven days also had as and currency beginning quarter selling return at we with on compared reflects earnings throughout the basis, per notably, exceeded

to business. during to and continuous various efficiency cost streamline the the new to Lastly, of to committed improve functions. At of XXXX, Teleflex, and first we a restructuring plan business improvement, quarter we continue effectiveness opportunities designed our on value new execute

quarter of results. to now a more our detailed first Turning review

margin of at were XX.X%, perspective, basis impact with X.X% at selling year-over-year basis. a basis in mentioned, respectively. and revenue on COVID-XX translated headwinds This the operating points days of generate constant line. in Vascular, operating a revenue sales margin due of ability in quarter impacts Anesthesia, into have by Interventional we the and From increase generated operating of We Interventional and headwinds Other adjusted from year for The prior quarter demonstrated a XXX adjusted encouraged coupled on adjusting and was lingering declined we XXX despite the experienced points declines our which by a the gross our primarily leverage contributions margins I OEM to the gross fewer our Urology, business two X significant period. segment. performance, lingering the COVID compared of decline XX.X% When growth and revenue margin margin line. day to As line and days, Surgical the our currency to selling positive offset

gross longer-term a quarter ahead portfolio expectations with generated In of I margin call. adjusted we the while towards fact, also happy The Overall, on operating was the we Street am we medical continue per our year-over-year reflecting our the becoming highest we earnings built, global product margins that company. the adjusted which and provided as X.X% quarter well P&L, X financial first share resiliency device $X.XX, the our pure-play performance, show aspirations. progress X to and since across up diversified significant leverage very have demonstrates of Quarter

in representing on year-over-year of results. adjusted unless the X.X% growth or Anesthesia, adjusted day $XXX.X now begin a quarter, of a XX.X% noted, which Vascular, our million, impacted review delivered a by the Americas days or decline was $XXX.X adjusted I basis. will on revenues on of Growth days rates in reportable reported on refer a a a first EMEA otherwise driven of was EMEA basis. strength Interventional deeper quarter basis. comparable. sales look XX.X% with at difficult and Surgical the million a Urology segment a X.X% by represents will Turning constant The revenues I to basis. to growth revenue currency in are revenues and

initial level a and COVID period occurred of ordering ahead that well a the surge restrictions the deferrals first saw of As bolus of procedure year elective during XXXX. COVID-related prior quarter higher the as as of

million, Turning to day $XX.X this growth, which represents no Asia. selling Revenues totaled region. XX.X% in impact with

Japan with along more in and double-digit China, double-digit and Australia. growth Importantly, in recovery in offset we Korea. This declines India saw solid than

Asia represents on decline Americas anticipated, more adjusted recover And a and $XX.X selling basis reported constant than the continue currency our XX.X% decline to lastly, business Europe. OEM a for quickly million, or days. we XX.X% revenues of As which

our to recovery. to and anticipated, that our continues OEM tied business to device COVID first quarter As with aware complex reflects the impact procedures. lagged orders familiar related business OEM be companies Investors and Teleflex nonemergent whose sutures, supplies see business reduced customers will with surgical is catheters impact from these a

the of been months, have the additional which acquisition year. next half the of As the two we it are online and in help drive coming the relates integration we completed, over should to pleased HPC, that has capacity second growth

selling a also global by regarding Consistent with product category. basis, my on by for to had increased X.X% as constant for adjustments EZ-IO move currency discussion adjusted of commentary X X.X% contributions day PICC as product strong growth now catheters, we $XXX revenue will our Starting with segments, lines. and revenues million our selling color global venous or provided from well. a Vascular category Access. be Let’s to reportable with on Quarter product comments prior days, central

Access. Interventional to Moving

XX% due was quarter selling offset COVID. procedures The in globally increases When closure for to delay was year lower decline The the was in decline to recovery by days. prior revenue largely of the due adjusted somewhat the the certain grew large-bore revenue, MANTA for days, than nonemergent selling approximately which million, was First X.X%. which year-over-year adjusting by decrease X.X%. is $XX.X

lower growth Turning and metal chest by X.X% Surgical. $XX.X represents or better-than-anticipated, ligation days, X% regional selling decline. performed to The adjusted Anesthesia. products. and due X.X% of driven solid adjusted and sales of which our Revenue revenue by growth revenue offset or Z-Medica, Quarter partly X to representing for offset polymer partly was laryngeal was instruments, selling for which of to masks days. anesthesia $XX.X X.X% million, growth million, by performance ligation sales drainage clips Shifting was of

was Quarter selling adjusting Now $XX.X X.X%. revenue days, product to the Urology. which Interventional decline X.X%. a was When approximately X for grew of UroLift million,

we the COVID During see counts quarter, procedures January negatively and surged case in canceled to February. growth impact continued as

growth that UroLift in that were during March March. However, strong we by trends quarter we sales growth trends. for occurred average as encouraged the April double-digit in improvements see in to progressed, The daily occurred very continued strong our as the continued

were, to daily on sales the pre-COVID rates a basis. daily average April back for our Importantly, first time, consistent in

be view of one first to as continue environment the the to as is UroLift performed procedures We improve again. to starting

X of quarter and revenue urologists in We our million. and declined selling XXXX. which Other well procedures urology from to for our COVID finally, or track comps by achieving in to days, my decline EMEA. well XXX category, our new XXX headwinds difficult annual The completes XX.X% XX.X% as the X related consists ordering XXX totaling new quarter and trained care elective respiratory adjusted to are on during between also That comments prior on year of training And urologists products, as $XX.X performance. reflects target

updates. update to direct-to-consumer efforts wanted to for Turning provide and commercial some I an on clinical UroLift. our

the we in planned, campaign year. to and campaign, UroLift national in have On full our we decided of and the as the doubled awareness a XXXX a of successful for where targeted with strength men population for BPH, increase investment XXXX run the

in selection, this ads For and impact. the augment optimizing social refreshing media our we the conjunction network overall are to working campaigns campaign, year’s with

in Indeed, of BPH, a We patient in way. are continue market reaching a UroLift we for that time directly as is innings still patients multiyear meaningful in as in early to and this leading States and is DTC the first recent brand United is BPH the a catalyst awareness. way years UroLift view the in the adoption

Turning to UroLift X.

controlled launch, fully continue confident and to X in beginning as more revenue rollout half to the base We progress UroLift a continue We to we fulsome we the track XXXX. with conversions make time, remain the over that expect for on significant continue expansion generate to will is our second converted. margin and remain of

go relates the the it very device, As ATC to well. continues to launch UroLift

the to multiple completed seem we use urologists be they device the find perform procedures median intuitive As obstructive to of to the that and it device lobes. with and appreciate easier case makes days

in as for view decision driver be And a addressable that catalyst robust France. With in will XXXX continue confident the we we place remain our approximate Japan, will on key become across catalysts incremental commercialization for foreseeable the in global a to franchise, a and growth remain Regarding work the reimbursement during significant the a We positive billion U.S. UroLift $X future. and quarter. cases track towards market an multibillion-dollar including that performing multiple addressing anticipate opportunity. Japan, we second geographies, first

XX time seconds. of to procedures. endpoints like call study underwent recently Tom, turning before to over studies with The real-world Access our published Lastly, would was unit. two MARVEL provide business the I highlighting updates hemostasis clinical to transfemoral large XXX XXXX. a published Interventional Primary in centers recent of study percutaneous globally who across December was of XX This patients tracked median bore

vascular large site While major primary to effective was the MANTA line with was trial. pivotal in study that endpoint safe the the bore MANTA and of device IDE the for access rate complication a concluded real-world The under conditions. MANTA closure access related safe

in study my Key findings examines analysis addition clinical rapid pooled strategic This as In In environment. a for XX included low median aspirations invest in mark to registry high we as highlighted, help technical the was in CE this data remarks. seconds. for completes time success from commercial SAFE patients meta-analysis to growth complication I normalized well as our the rate, will February drawing to MARVEL catalysts business pivotal and the a of XXXX. upper revenue separate single-digit and and XXX That trial study. unit that was sustain continue hemostasis just published nearly hemostasis registry study, this prepared rates. to Overall,

to would our over call first financial to the for I results. like of Tom more Now review a Tom? detailed quarter turn

Thomas Powell

Thanks, Liam, morning, and good everyone.

profit the previous performance, the at company’s gross the revenue of line. discussion Given begin I’ll

partially totaling the benefits, increase became P&L. the margin margin in an adjusted also restructuring Continuing For a XXX XXX versus of the points pure-play mix, gross highest gross basis offset The of company adjusted an quarter increase which and primarily Teleflex attributable the company, a metal increase to XX.X% driven metal device was prior prior year by year became offset basis period. exchange were normalization foreign operating a Similarly, period. margin the quarter, compensation versus and since was gross highest was down product represented increase M&A by accruals. expense margin the since of was partially pure-play The or headwinds. Teleflex improvement, first points of largely XX.X% device by to

principal For notice year issued $XX.X outstanding. redemption is aggregate our of XXXX. the available in redemption We borrowings expense a slight $XXX higher from outstanding the $XX.X revolving credit million notes due X amount totaled holders using we close, of a net interest and our million to agreement. of increase period, the Post under to quarter, senior quarter which in million, plan average reflecting prior X/X% debt fund

Moving to taxes.

adjusted rate is XXX our benefit the primarily year quarter, first to tax rate compensation XX.X% was share positive period. the tax prior increase this as to the increased points period. Included year-over-year For The due line, adjusted from up which stock-based compared less foreign per result first is to impact from is the prior in basis earnings as an $X.XX. At of $X.XX. approximately adjusted in quarter compared year estimated X.X% to exchange bottom our

I’d restructuring announced. recently program another like highlight to we Now that

benefits and $X that termination million, designed between will various and a During incur in the to first and charges. we charges functions. $X $X to restructuring million committed XXXX, restructuring-related restructuring plan million we primarily pretax million quarter consisting We of aggregate of streamline estimate $X business between

Approximately $XX are We XXXX to total of implemented. all available bulk expected be annual total plan pretax the expected details cost presentation. $XX the million $XX XXXX, To in the XXXX, appendix between savings current savings savings million. half summarize remaining are be across ongoing savings between expect active programs the pretax to And our million begin million to $XX further are and with programs, remaining is the the to XXXX. the during realized programs in restructuring all and of with realizing realized and saving by and once of of earnings plan-related fully

nonrevenue-dependent the future. for foreseeable margin good have line expansion to we of sight such, As

Turning to sheet select cash and highlights. flow balance

collections quarter, and a the higher from first quarter prior debt payments, and cash million flow increase $XX.X and end Subsequent times. $XXX.X balance of of the net $XXX.X by we or year. a payments consideration year-over-year compared cash For the the million down to to of the The in X.X was sheet to our the shape. use was totaled $XX at Overall, XXXX, in the approximately million And payroll during At an operations compared in $XXX.X quarter of million. quarter year repaid accounts lower first remains as balance paid we million increase contingent in additional revolver good as million. quarter, was cash net our end lower end, $XXX leverage prior receivable year-over-year driven benefit-related period borrowings.

and currency increase called revenue We which guidance. for The Moving to expectation to on X.X%. compared constant the with in expect This results, and we growth revenue quarter confidence X.XX% revenue now reflects growth X.X% of between Starting between to our compares including than which X% XXXX. guidance as our anticipated. first our XXXX. business, for guidance, better constant currency in initial were

XXXX. currency and expect offerings to product We our during key Urology, Anesthesia to Interventional constant our Surgical be contributors revenue growth Interventional

Z-Medica. our Additionally, XX% acquisition we of continue currency to midpoint the approximately least The Urology X.X% constant Interventional contribution levels. expect range will of increase our business guidance also assumes at XXXX from over

to Turning currency.

expect a result, now a And between to XX.XX% revenue $X.XXX be growth we increase billion. to revenue X%. foreign to our would between $X.XXX and as billion continue We This equate XXXX. a and to range tailwind dollar as-reported exchange of approximately expect over will of XX.X% rates

next to margin. Turning gross

basis XX.XX XXXX, now and range we an basis increase points increase between between prior of forecast. adjusted During margin XX this our anticipate gross a and XXX XX.XX, is points to to and of XXX versus

driven gross the from offset footprint primarily productivity including Surgical. margins programs, a of Z-Medica. Interventional to benefits We by restructuring from expect our contributing margin of improvement by somewhat and expansion high-margin expected programs gross to previously acquisition Year-over-year is be expansion Urology, Access Interventional announced products, inflation. be Also benefits and mix favorable manufacturing

adjusted to margin. operating Turning

expect potential additions, for XXX the interest expense and the $XX to down margin of normalization which $XX and operating XXX million P&L. million. We now called $XX largely basis and items XX%. continue initial our increase guide, compares as gross $XX growth spending adjusted between Continuing targeted operating points interest adjusted The to such million. including and to headcount UroLift and points the retirement is compensation, range investments This anticipated XX% by will with that interest drivers million year and between We associated to The partially line, part offset faster-than-originally in early to range MANTA. reductions, assumptions. rates. basis in expect between margin expense margin support of of lower-than-expected the strategic commissions, with due further primarily between expense for notes coupled a full reduction The was always key debt from come our of LIBOR will interest in expense XXXX of increase management

We taxes. Considering we of to guidance. and basis of to XX.X%. between $XX.XX adjusted pleased now raise an point to expect be and able XX be XX.X% of or for prior range will and XX% $XX.XX our a outlook rate these the XX.X% versus expected Moving adjusted elements, between increase are to in our our reduction all EPS between

not guidance, would approximately to we some it ongoing quarter to financial what given I we in year. quarter is during to year while second quarterly per our with practice the second our new year our reported occur normal midpoint adjusted ranges, COVID, full guidance the At expect and provide the of approximately to of provide revenue of of the share. color of regarding Lastly, situation like XX.X% XXXX, XX.X% expect full realize earnings the

concludes on back would prepared to call continue half of that turn that disruption Our my I the the for cause to will Liam first Liam? the outlook COVID year. the predicated is remarks. commentary. And assumption closing during to like

Liam Kelly

In Tom. our takeaways would I – quarter. highlight the from our closing, key key you, Thank three

performance line bottom expectations. and better top with quarter first strong a than delivered we our First,

expansion another revenue our and action also guidance, to Teleflex contributes raised thanking strong the adjusted reflects year. And third, the restructuring entire around for confidence X reflecting world we margin the would for This by per pandemic. I organizational that and team quarter the improvement. Second, efforts our like earnings in our tirelessly share our long-term we finish of who a efforts. outlook through program announced continuous worked remainder the to have

shareholders. begin to course, commitments we patients, out and, my our side prepared come As we to clinicians, the concludes COVID, meet other to our our of communities of continue remarks. will That

would turn Q&A. back the Now operator call like for I to to the

Operator

first [Operator question your Newitter with And of Leerink. from Instructions] line the Richard comes SVB

Richard Newitter

to the trends just on for start there. color Thanks on UroLift. Maybe the off

XX% So it just Urology that I’m in curious, is UroLift XX% pre-COVID trajectories that in citing growth XX%. levels. and to returned you’re point to for a kind you XQ? XXXX, half the quarter – you here about should or and it first rates different as rose Which early first XXXX then Interventional of we the growth trends use in mentioned of those of you’ve that was had growth reference of the

Liam Kelly

Rich, for question. Yes, much you very thank the

XXXX in So year. On XX-plus we are in last few the even week prior trends of grew days in we in pre-COVID. – the of percent March, impact days of the with or a basis quoting approximately the QX COVID adjusted last XXXX, the

the we that we very in encouraged trends are saw So by of the month April.

impact very, other that days is the April will you sequential sales is QX we it encouraging number point, and an But that is level you is remains at into weeks XXXX, a QX in of compare worth And where very daily until compare different of on last data November have back basis. of and think, us. times did approximately through consistency growth that this say for I looking to month at see – a to and the of So got if XXXX back we UroLift we Rich, that XX%. the average COVID to as seen the we got not of year, pre-COVID I

March, us to confidence able very full in reiterate be – importantly, have expectation to for and we’re the long-term in year last reiterate guidance. April, given our plus that So or weeks weeks but that that full of a the able UroLift, be of will year we’ve XX% the first trends more seen that growth pleased definitely few we to the few

Richard Newitter

just talk been just the of organization, and anything the the quarter? bit some would Head of Maybe management hear retired One, color. about it changes may the led changes the in on just follow-ups the that that you’re sluggish past, if first the think, be with ultimately, changing UroLift, direct-to-consumer the the I year. the President that two viewing to in potentially said trend that? impacting UroLift help you’ve business? little initiatives, in there. COVID you end Can for is purely know expected of timing, with a I there’s way the at market, just still the Or – to Thanks as management if there’s this consistent

Liam Kelly

Yes.

the call So first I trend sluggish the quarter. in wouldn’t

fourth January And a was than in it in would QX with not approximately an deliver Let’s us QX, – of as see able in to I to achievement. more forget, and much growth quarter. February, be X% COVID compared for severe the was consistent that

of of Another color was as it April. in you, the said growth went decline month in for approximately earlier, had we we that north Rich, that I to continued, trend into of is year-over-year of as UroLift. positive February, give improving X% months, see I March, the the absolute And March. little XX% January in a and bit minus first in month And of two we would

really positive. still the markets, end feel about very UroLift. changed we So positive in and has Nothing we’re

business of in year, core and but that units As anticipated, the the still take did the the leave the we unit, of to an team veteran end over have is President at there. coming business industry

our averages. turnover significantly other unit the our Our will beat industry that turnover opportunities below within many and well people any said you it turnover And Teleflex there. is culture the within of because of times, part because culture in Teleflex is Rich, just and stay Teleflex. of in I’ve business can’t significant less than

changes no President below level. the within the significant So organization

Richard Newitter

appreciated. much, Thank you and very

Operator

Furlong And the of Cecilia with your from next line question Morgan Stanley. comes

Cecilia Furlong

continue Great. with Thanks for to taking want questions. did UroLift. I I guess

kind guidance the thinking Japan little as recovery of guess this a talk just from recovery into thoughts ex coming DTC OUS? out, back for about love talked year? flows on from impact of the online the half from look gross in what just would at it, the and layering the on then in rolling just year. that can market U.S. You ULX And about bit you as just campaign you as that expecting cadence we’re France expansion kind you’re as about of well COVID, I margin your from as U.S.

Liam Kelly

Okay.

recovery So reiterated again, plus growth the levels see UroLift year. would this again the XX% UroLift regarding We we those going that for be growth the we and in U.S. the investment is we’ve a and focus France see Japan, community growth U.S. our as our incremental in and the growth for in the growth to really year, And UroLift. phenomenon market. to to advise our on normalized

a registration but We some data. complete study some will have in and we mandated generate revenue Japan, to gather

that for to I that would and gain we in points, that Teleflex will the points And basis our I converted key really Japan percentage see incremental momentum. incremental With an market start would earlier, of margins matter, see an So have being account as which XX revenue have you ramp of XXXX, the American still entirety. about North ULX, the the in we our and really we gross for will story, pretty where by for end the growth uptick will future. much X-fold to expect France said see ramp a regard as into as really XXXX driver I

for year are I campaign. of we saw the learnings to we’re a anticipate prepared said more made full of run that we’ve that by some the as making. our are spend, what the planning impressions encouraged campaign And we than in last but DTC DTC, Because remarks, we’re DTC doubling year. the during doubling with Regarding number of we time, we very my

we So additional expect about to to the in impressions campaign as compared XXXX. make XXXX XXX%-plus with

what number very that. that that see and of the by urologist patients – being out encouraged levels appointment engage the with We we we by also are the generated encouraged of

full for by investing rolling DTC heavily behind XXXX. are we a compared more year out it XXXX in So to

into the more have to in of and – feel done that and this there DTC get recovering should put XXXX. urologist in people confident the So half a back environment, care patients a turn in we are under year, the that COVID now that through of procedures campaign back go many procedures

Cecilia Furlong

Great. And just out expectations.Can a integration far? time slightly performance, just $XX I And really, you how million how ahead of that that you to Z-Medica, bit your so talk effort guess see about acquisition? to $XX has the on little talked at called the I wanted you’re of at gone about just QX initial you looking million

Liam Kelly

Thank you. Yes.

very The is well. the So exceptionally the to Z-Medica family. going integration are team Teleflex welcome

We are seeing identified no turnover within our retention pool.

approximately have XX% we’re XX integration, work streams about in and the We completed already.

better $XX anticipated guide to gate. of feel Regarding product to the earnings gave, the have would million than right million we doing and $XX the comfortably and the in $X.XX $XX to $X.XX is that million, we million we we’re very out within $XX that

happy going how So are we’re with things with really Z-Medica.

Operator

comes And of the your next from Matt line UBS. Taylor question with

Matt Taylor

Do past how Or and seeing buckets? about showing the insight is much Are circle still? ask one new UroLift who each to on used surgeons. wanted that seeing you back have are the growth in the trends into you UroLift So of have of existing those there? any surgeons new you’re growth same-store coming versus from

Liam Kelly

So and X/X our traditionally, of from comes new comes growth from users. about X/X existing

that. change in haven’t any seen significant We

we quite got the first some swing. we we in midst confident into the see ASC back points and urologist the the that’s that going saw and and back and thing pretty into One the the in done. by cases to as average shift and COVID, hospital saw We’ve we’re holding out being first, seeing during hospital getting the more a quarter fourth COVID, the quarter As firmly, done few number procedures of office percentage did and encouraging. the discontinued of now percentage within feel that the of the patients of to swing actually hospital we the seen

And It’s the So in the we trends those as by the that UroLift, the Matt. is of sites of done for service as service. procedure first the weeks office. because we our encouraging all in back, April, few hospital, come begin to ASC really done encouraged of in did sites all we’re are of very see and

Matt Taylor

I Okay. the continue you April kind get think to the your are that to data that procedures quarter? mean that from see start QX positive. is there’s hypothesis customers some do vaccinated? going people bounce Great. those And you you’re acceleration? levels to obviously, momentum your that a those or you through could sales back to canceled force point, your are actually funnel Or more do But very you telling as of going see – in

Liam Kelly

know in canceled the quarter. first and Matt, the we Well, quarter, they procedures in know second what were the were, we what

of data So we’ve the we taken the XXXX, the additional cancellations. baseline cancellations on have and

So aggressive, cancellations than the COVID as in were – expect in was particular. quarter first and more and January fourth peaks we’d February, because hit and the higher quarter in we record

$X in So the and just quarter. of we would the first had in we fourth million XXX around to XXX shy cases, which equate quarter, had

procedures of rates. So $X it’s over base the million canceled over

coming stage having those will more done. procedures, So feel people as them back some back imagine, and would come one canceled at confident in

the year Japan, we as got UroLift geographies. coming drivers about the course, of as other into XXXX, really in said is then right So we incremental we’re into as growth there. feeling And later it and good such and France earlier,

Operator

Keusch James. question next Raymond comes with of line from the Larry Your

Larry Keusch

maybe – can not to – you on have had Maybe the Liam little just do revenue with study for that a thinking of happens I you there? then of us Japan. this just the But through just UL to this post-market get clearance what expecting certainly walk you’re and sort to heard year. again, think of you’re how of messaging sequentially with set you what X kind about time level of a lot trying the reimbursement, lines through kind done, hoping bit happens

Liam Kelly

Yes, Larry.

me, But give know. September. give will they they not do don’t – in we meeting, or it decision decision and review if June, So a they pardon we a And to we for we’ve and prepared – in time the in whether are them the will – meeting, them submitted June have documentations the sorry, June in the December in in review authorities. all

the on reimbursement get Larry, that’s in Japan. So to a point, decision the as we gating when will

begun do that that already ground mandated specialists that recruit decision, have have in Japan begin additional already to market As We’ve We’ve soon to comply And is do. payer market. procedures, do we the over getting the we we got the ground. a n in we on had of the to PMDA on single- the ground. the sales We’ve will anticipation team advantage to get as a on individuals to development the to States that what study it’s insofar United decision. reimbursement has

normalized go we of then ramp have XXXX once as across entirety UroLift reiterate reimbursement, and we as revenue United again, Japan. through So would And I’ll said, we the reimbursement States. sites an over addition beyond. what all I And above to seen growth see the this a Japan predominantly through levels in what get we’ve we the of see we and the in I think

Larry Keusch

just want I a for Tom, have do question to Okay. Liam. one thing, but clarify I

that the happen. Or you saying you before you are yet get haven’t filed reimbursement clearance? does the regulatory meeting? this to have done that then And for So

Liam Kelly

we No, about reimbursement regulatory already, was clearance I me. Larry, have me. Excuse pardon submission. talking

Larry Keusch

I to thinking maybe about little the up a have we again, the are side, you’re certainly, in bumping line? gross bottom you LRP. in question, investing you address about on about how your you margin after guess be Tom, pre- of the saw bit to the on restructuring front the targets to all margin years. the the against COVID sustainability Again, actually about what gross Or first Should just the pretax of look, as fuel for think would the growth? of really you kind over Tom, that or consider next several highlighted we the dropping quarter? some that savings to you have thinking in And that then you savings of secondarily restructuring, wanted

Thomas Powell

of starting gross Well, the with margin. sustainability the

being previously, the So talked we driver, Medica and I also are what’s Z- driving greatest mix, year. of gross our as have would addition that margin UroLift we’ve things, primarily about the really say this two

UroLift expansion outpace we’re continue rest to see product see year margin offerings we and going of so the into continue for and future. the to to as other this And to the high-margin continue business,

significant to close margin of as we already restructuring that’s other we with basis mentioned, years programs to of a the you one of outlined math on Now do And piece are that couple savings. some the of realize out expect have points regard do if programs, there. that there, right and to expansion

growth we of opportunities our further about, at as to level our UroLift, kind to look we well we’ve are behind what investment enhance what to do to of MANTA increase think continue such as brands options As high-margin perspective, evaluate got. as we’re considering drop I this through? profitability with from the think Z-Medica, going

to continue that the earnings drive continue what meaningful to we’ve growth. going So per to margin And line translate even to meaningful are more. invest further we’ll to top opportunity top evaluate opportunities accelerate expansion, got the and growth, that’s to share to line meaningful

Operator

line question next with comes Matthew of Your Mishan from the KeyBanc.

Matthew Mishan

to sales all probably gross driving of bit UroLift moving that? if what’s here of the the mean higher, a would lot I margins And moving XQ higher, sales? what’s gross – the products mix a if from XQ, offsetting XQ little decline increasing just move you back sequentially, with Why lower. the Tom, are mix just is in COVID-related and are but Z-Medica, margin. really improvement,

Liam Kelly

Well, we I we in quarter from say would corona a the incredibly And quarter, raised, first in first an point as you’ve had manufacturing. that to of also clean should standpoint declines then constant EMEA we revenue. first look the XX% both OEM year, the recovery had I half back at the currency say, and about in in the quarter, the – in

our and we that of some growth expect to on of other territory, both to back and from adverse half look going an higher those into year, we UroLift impact the businesses margin of And positive offset partially mix. will the move As the have brands. that’s to high-

through favorability Now line. over we gross margin as in out how the and waiting couple see see to of obviously, continue next months. And year, recovery we weeks the the to we’re continue hopefully, the plays

Matthew Mishan

the that versus where side, And does OEM activity – customer when on is? Okay. Excellent. inventory normalize versus where production

Liam Kelly

So quarter. about a it lag Matt, should

should expect see the start half two to back definitely the it So should in you year, in quarter beginning recovery. up. And to pick a you a see of then

quarter. So a about it will lag by

into you’ll growth OEM be get were year. So that in in mid get results should be would the this in over QX better they year quarter, the into grow An rate single-digit would positive clearly full of all. my countries half expectation OEM back and then than that for the

Matthew Mishan

And Okay. back Tom. Excellent. just to

about have cash flow flow cash next the XXXX? were XXXX, in reached back should the excellent How quarter. be flow XXXX? was free free And point in we’re in thinking in we that see we free now that to first you So about inflection cash that going talking

Thomas Powell

Yes.

growth at line look I’d growing earnings free be that we’d way the flow XXXX. it expect in things couple in the of kind A range. XX% is cash with to of So going in on

see First this to result consideration We’ll less under of increase going spent see and of to also payments. $XX we’re increase from an about as year. that income. we We year, all, last million a an expect less significantly contingent little net be a

we’ve with the from it historical we where also extent a closed our trends average. to very, year, I were considerably flow historical this closer than our planned year down out our that XX% to to cited. growth to we year, And more cash the strong see continue see we collection collections, cycle favorable last in that However, could very DSOs in be free average

Operator

Matt comes with question And from Sandler. your of next O’Brien line the Piper

Andrew William

on for This is Matt. Drew

to the I about maybe think just to but question, want the know UroLift. landscape competitive ask answer this I for I

in good utilization seeing to Anything have with Olympus though within space. shifts it’s with those about also Boston rolling I new new the product out technologies? talking are And believe product yesterday. market? Rezum You you progress have a any you the

Liam Kelly

the changes marketplace. no seeing we’re in So

year-over-year is these happened in don’t you tough because with know call to some one environment growth companies. I in what year that this a of prior the think

X.X% So I days you, grew we last basis. when tell can adjusted Teleflex entirety, in quarter, our a on

and – in X.X% and in So you Teleflex if over adjusted, constant days grew look entirety our growth our currency XXXX. XXXX, we at

outcomes wear some So end to a the really technologies, these comes man comparable of where the to of down rates the also of to in are favorably patient we will UroLift end were that day, restricted with to procedure us. dysfunction, And to other At gold sexual And they we done. go Do done. choice course, for have or changes have revision that get catheter markets. can an is feel a standards that the the no to ASC swing no all the UroLift see the hospital, it moving to and an they With for forget has procedure momentum that don’t as a tough. want the they are office. man

end lost to in market, So change can the have tell categorically any you, no competitor. we I no customer and

Andrew William

ago? plus just and relative the relative Okay. of the That’s framing believe the Maybe MANTA. targets a of then And by was to number I out kind estimates congrats strong could obviously you couple great to with quarters to XX%- performance you you laid on penetration hear. mentioned where growth. that us help

Liam Kelly

very we’re the So pleased with growth.

You’re And in the and and our given correct, we trajectory, with continue expect is COVID situation as it worsening was in It line February. through very see our believe to to the quarter, we of XX% encouraging. X%- do to get we the with growth will within January that even year. remainder momentum which is penetration go the the end year, by plus build we of the

So MANTA very in performing with and much encouraged by very is our expectations, line it. we’re

Andrew William

Thank you.

Operator

comes Anthony question next with Jefferies. Your line from the Petrone

Anthony Petrone

in and UroLift Boston their bit guess, on on Rezum about they a questions. maybe Scientific one March. also is spoke One of a increasing dynamic, devices, UroLift existing regional Maybe I call the versus both saw couple just volumes competitive alternative

still getting be in opening EMEA, the lagged more on update a somewhat competitive one They’re second into heightened. EMEA. is maybe an on and maybe, just would new on obviously, the dynamics broadly just COVID Or touched first up. And question. sites, So quarter. Liam, quick

So in And then EMEA maybe broadly? we’ll just I’ll quick thoughts have a see one reversal follow-up. on when

Liam Kelly

Yes, Anthony, thank you.

north of the yes, – in so for we XX% that March So year. UroLift growth over saw the prior was

mean average our the as in April, for So going our sales moment we’re saw we you encouraged I time. as daily water the that’s going momentum we’re where by Anthony, getting appreciate. saw really shed back improvement continued sequential big we into said levels also, encouraged a above And first April, that that. earlier, us, pre-COVID into can for I by

can above for being pre-COVID shed consistently us, first moment big the mean time. as back Anthony, I for We you haven’t levels that’s appreciate. a been water

haven’t back now. being for year entire pre-COVID an levels We been consistently above

so And the out up in team absolutely that. driving is there fired

there. the going on on as your Regarding $X There’s few COVID year dynamics a Last prior in a received EMEA EMEA, order quarter. million year, question positive was EMEA expected.

well in rollout is So as they as had that increase in is January in of pretty United Europe in on. vaccine still was the lots March the tough I Europe think and we of the States. well the And in it and lockdown going strong, comp. that cases COVID know, as And not going all February into within

of April EMEA Now also somewhat encouraging. having in month the been that, said has

mention quarter to would grew X% So EMEA remiss expect minus a have than I be would from Anthony, quarter. the it the basis adjusted over in much in X. to did second APAC, of quarter a it XX% first a me on quarter And better days not APAC.

strong us had see really, that really quarter for to back begin for us. China as we in a and key procedures come first was a that geography So tremendous swing

So that’s regional Anthony, EMEA, APAC. of some the for also color, but

Anthony Petrone

be out, would as that military? the TAM of just starting recap helpful. then And you be that $XXX and broadly, on a Very thinking there as and with in, sneak could Wonder quick roll still just opportunity, a about addressing should million if I update maybe EZPlaz, maybe we again.

Liam Kelly

in correct. the $XXX military, TAM, million civilian. million $XX you’re $XX Yes, addresses million EZPlaz absolutely That in the

FDA is stating to help all the a from our to signs we from following this market military the fast track to BLA. it complete going FDA. priority the sufficiently got Very was going As Very submission BLA was product. letter assigned a we’re We application and indicates encouraging in begin begin that BLA substantive know, which to the classification, develop – on review, the that collaborative. review they’re

getting back, The is answering is We’re we what expect. them. team which questions would

normal back, point anticipate the over fourth put and So very approval to would quarter. we it collaborative and is

this, through community move updated. they as the we’ll investment So keep

Operator

Matson of line the from comes question next Mike your with And Needham Company. &

Mike Matson

team focus sorry there internally a developed new your So much I on products be here was should you’re that any like products was we of? almost about aware feel acquired little there’s UroLift and there. if investors But for excited from MANTA. wondering R&D I so that

Liam Kelly

So us. R&D for a for tremendous internally They’re our team. doing job

good So group, new system of the the lade really we’re we traction b that we Polaris, which a number on. we getting products a is internally are have developed excited that anesthesia within about and have laryngoscope, being handle a

Within the Vascular business.

us We have right traction Project tremendous gaining Phoenix , is now pack the within new which for a group. ergo is that

product encouraged Within by. will is that course, week be the start Interventional approval group, product, combination later geography, And the X-in-X quarter roll we in Guidewire, have it. in gain gained having a a launched particular, that which that in the we traction, we’re China, tremendous and very continues really Wattson out that the with of had that for strong we as ACX to in to

But moved point few new ago, we’ve within products. board, years. And thing got used X.X% years ago, generate a question pricing generate we’ve have new last past of that positive to had years used to in we and from through growth group. last growth the our across products X% we on related of revenue the few And years. and not we’ve from the revenue to quite the out, number the positive new it’s the A we A also So successful the years. new other been number positive coming of of over to new from over the to over your the products in lot to quarter. I’d products revenue X% R&D number growth X% augmenting in to products, up new

also. even to a in that that’s encouraged ability I our very prices for think So by environment, we’re sign increase our us positive and tough this

Mike Matson

they to that their mean doing Didn’t job. Okay. weren’t apply

focusing Just some on the stuff. investors external of are

to going a I on give then, – bit the MANTA. talk and internal was a some free you stuff. But to little of wanted – and I about let So I to just guess,

from good. away I same thing this the the on mean XX% data outstanding. at But really I anything growth. – mean, time, want that, is take I MANTA, pretty to obviously don’t So look, that’s clinical

help And and VAC So trials trials you committees kind price, this collect in I of use what economic price? to economic have the no-brainer get? is I to of me. have it’s do kind of just to to any with if that mean pushback like data things the them? a of kind seems just mean, is you like It do planned Or data any that? the thing any it any

Liam Kelly

not VAC frankly, we the it’s with issue gaining to getting an access So MANTA XX%. us, the hospitals, is in through getting in have the happy VAC January with we’re quite for In committees The product. the the gain the through especially first been issue Mike, access because first quarter, to has difficult quarter, the and in COVID really February.

But here – cases in I XXX,XXX time worse than sitting and April, were they like Now January we’re November getting were January day we’re know don’t and much and a long February, February forget December. seemed a we and ago. in

ramp us to showing And for anticipate to it better. market our now continue will as much would So experts into sales are more I people that’s see clinical to and the the that – difficult be there very access was the getting product. representatives, people hospital that out we’ll get vaccinated

Operator

SVB Leerink. Newitter question of from with And you line follow-up a Richard do have the

Richard Newitter

can just follow-up. Is to? just than clarify, commentary or relative that in grown UroLift Just think, to XXXX What’s that April relative greater that with you confusion you’ve relative XXXX? is I around pre- XX% some to the wanted There April around, growth April. COVID rates. be may Liam, respect to to

Liam Kelly

– was compared to quoted was and XXXX. relative March I so to the in to relative March, was That the was that was it for Rich. that XXXX, quarter and of The XX% XX% the

to quarter grew the grew we in And XXXX. compared March one XXXX, So over we XX% in XXXX. of XX% March of whole

into to got before average not seen COVID. of we daily we As back sales and average went XXXX since into April, have daily our January levels, February consistently we headed sales

Richard Newitter

exceptionally February of strong, I that XX%? and XXXX my mean, well north And were was understanding Okay. of January

Liam Kelly

Yes.

that, and something were about Our XX-ish like memory, Rich. in from growth percent February, we or my January

Operator

your And next Shagun line with from comes question Wells the Singh Fargo.

Shagun Singh

Sorry, can me? you hear

Liam Kelly

Yes.

Shagun Singh

contemplate growth typically midpoint. So just EPS is guidance QX, in QX XX% flat X% I years, is QX think over looking EPS X% about at pre and of sequential And at the your higher. sales COVID

I a talk you’re for looking that just versus in appears if similar X-year growth you versus stack So at QX? to just could QX basis, was wondering pretty then second it what the And a QX contemplating on for for half.

period. backlog. final view we should with at about a conservative? it? as versus one we are will, to hearing So flow increasingly catch-up, levels then thinking And that I we’re you expect over How or should brings steady quarter a more is two of it think question, a respect that me which elevated you my if

on that So any be helpful. commentary would

Liam Kelly

towards to type as forecast know I there about talking and roughly what be. share per would earnings would or to so be and the get guide I the there that relation that of quarter, in Yes. midpoint in it in share I’ll of you expect the in as to expectation. be I’m start identify that. about acceleration conservatism, do the system both that in guide is through per of are that see continue. hospital into middle it that get the and get revenue hospital expect $XXX capacity you and – here, because get should within – to It’s for be outside though really adjusted forecast for let to any quarter difficult as the that’s the recovery our where But – address later us through the at to for the backlog whether I’ll continue should we the build the into the earnings as us guide with the acceleration gave the – to you backlog be so system going it the to and we trying to get to and should in With of guidance you’ll pitch I’ll and say it difficult would Tom would we start the will into don’t regard specifics there. us year Shagun, the We think million see we burned $X.XX dollars, backlog,

that around And this aggressive to take prefer would given few see would with should cases believe more quarter, do quarter could at second get And we if stage, in be would and We in in think the recovery within be direction. to conservatism the that just will which that Americas but increases regarding there’s to OEM million. this opportunities be We recovering. as $XXX second there, QX, continue would think to the variants up EMEA. Japan. so in we we we Now to continue just there around lean of to us from a in million be not, position that to lean I we India was COVID prefer or in like And we places see our some did think continues $XXX we there we’ll be see than quarter, clear, advantage conservative the what a for good that thinking. we absolutely be better

basis see it So sequential significant an on improvement absolute dollar would Shagun. on revenue,

Thomas Powell

not a first couple earnings, that really to relates And expect quite that out of in back ready by look two it When out take we a year. performance, manufacturing go standpoint. that to to as had clean improvement the look see first we versus as extrapolate of of pointed encouraged I quarter performance had growth then earnings you Also, upside share. we’re we the full sequential A we understand, half And share at – that the earlier had prior acceleration a while a that if see sequential the in I we we’re level. from year very to QX, back a quarter to things to I XXXX, Liam years, expect year. per per pointed strong strong as isn’t we in think really adjusted earnings rate at to think

projects. the margin I recover carry and And half in were due Additionally, average. from than that turn deferred was significant down and in the And a mentioned say we growth, the segments both lower the quarter, to expenses part of than really, positive quarter hiring due beat it we OEM that the territory and of vast into operating first that business expected. also and had EMEA of year. to But and in gross for I’d terms of expect first to of perhaps was back in majority slower them those really revenue a savings travel

So reasons. projects in that quarter given we we delayed going that had expected COVID to the other just first eventually get and

half Now the expect the we those in up do of make back to year.

and of spend. So the of expect quarter, from year upside in we the some rest that the to included saving be first OpEx

standpoint helps and you that give why the what’s first going on evenly benchmarked two color years as fantastic, hopefully, to quarter an some just looks against So from earnings so ago.

Operator

with And your next Turkaly David JMP. question comes from the line of

David Turkaly

one bouncing to for one around just been Tom. this have I quick wanted morning, but little ask I a

but specifically aware of as as inflation. that late, to And sort there’s of a And this was be if as rest a just of general, referring some year? think I curious should sort of pricing with think increase hot about that mentioned undergoing may in topic we you any what be you’re input to? we I the

Thomas Powell

and we it Sure. included was historically. seeing anticipated higher a inflation Well, lot that in seen are original our plan. XXXX that’s I than A what of would say bit little we’ve in

polyethylene, in seeing see we’re above overall, are areas reflect at we’re particular, material, is But inflation say polystyrene well as current resin, polypropylene, Our the projections XX% seeing materials, current I’d all rates. the environment. inflation I what around we we’ve be in some labor pushing got that labor say up that is Malaysia, overall, would rate. inflation inflation in that sub-X% going I markets, say total a of sub-X% on direct-indirect growth terms in X%. select would would But inflation. some where

The is you it’s are year. inflation sea in rates freight And isn’t XX% think our seeing this if going capacity. heightened where I that particular, follow other there on, area our just In is up what’s we significantly, freight. up

our we different manufacturing, is our in the we’re again, a That’s the year, And current about projections. inflation of reflected look seen around X% current versus in So that’s fully for we’ve all up full collectively, components what as at expectation. up historically. point

Liam Kelly

add anticipated just some to that, we I of and would I inflation. mentioned a little it this seeing earlier,

actions about taking of ago, our some in we year actions quarter took over. this the About first we positive And And basis that we were started XX a pure So on through some initiatives. some pricing in pricing come started first to quarter. points.

quite we’re have and anticipated encouraged immediately we to So that. to began by plan this, an We offset.

our of selective some in increases price modest So business. areas more of

Operator

remarks. closing like back to to now Jake for conference would over Elguicze I the turn

Jake Elguicze

you the joined and operator, to call concludes that everyone on Inc. the thank Teleflex you, us This Thank today.

First Call nice day. Quarter Earnings Conference Have a XXXX

Operator

for gentlemen, and thank participating. Ladies you

You disconnect may your now lines.

Teleflex (TFX) 2 May 212021 Q1 Earnings call transcript