TFX - Earnings call 4 2023 | Teleflex Incorporated

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Operator

Good morning, ladies and gentlemen, and welcome to the Teleflex Fourth Quarter 2023 Earnings Conference Call.

[Operator Instructions]

Please note that this conference call is being recorded and will be available on the company's website for replay shortly.

And now I'll turn the call over to Mr. of and President Development. Vice Keusch, Investor Strategy Relations Lawrence

Lawrence Keusch

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

reminder, our be available a this for press for release website, on you replay, will access details. to from wishing the replay can a our and As those refer to morning

and Thomas on Tom and Officer; Participating and call Chief Chief open and Q&A. Kelly, are will will call the remarks, and Executive President Chairman, Powell, Financial today's Liam prepared then Liam President we to Vice Executive Officer. provide

Before wish events website. and in you the the actual and the to We such regarding the forward-looking we of that statements you subject in materially. slides Investor differ forward-looking like events are Relations to will section some fact, remind as are, outlined contain nature statements posted or may matters caution future results begin, to uncertainties, in of the in and I'd to Teleflex discussed that conference call risks

The with but not well Form to, factors events referenced results actual be website. today factors release our XX-K, the filings accessed are SEC, in can press including as limited which materially differ our that as could our to cause include, or our on

to his remarks. over for Liam the call Now I'll turn

Liam Kelly

seen the year will had introduce XXXX Larry, into On quarter through momentum and our we We for morning's discuss provide fourth fourth guidance quarter. continued finish a XXXX. you, some Thank good the to the everyone. updates financial morning, results, as call, solid commercial and this

currency million, an a of increase X.X% increase X.X% the of constant Teleflex year-over-year For a revenues $XXX.X on quarter, were basis. and

or The there As million, were shipping quarter. an a year-over-year reduction in growth to in a investors, year-over-year. X.X in currency day constant estimated point impact the the $XX was approximately percentage fourth X shipping quarter days reminder fewer

the decrease impact, year-over-year. earnings was shipping implied X% X.X% constant adjusted currency the share Fourth for year-over-year. day quarter a adjusting When per $X.XX, growth was

continued utilization environment From quarter, material chain. perspective, seasonality. the return stable-to-improving supply inflation a we and to normal for towards macro During a witnessed

track These our the generally to full expectations year. dynamics for

had For which billion, a while per X.X% share adjusted $X.XXX performance XXXX, revenues reaching we growth with constant year the strong represents was year-over-year, full currency earnings $XX.XX.

to in As levels. line seasonality anticipate we procedure with look XXXX, stable with environment, pre-pandemic we a

during the that would on Teleflex focus not we Although to is procedures, critical continue due benefit portfolio staffing pent-up to anticipate from likely the care year. see improvements will demand to the

stabilized in supply through to XXXX, continue has we and continued to global control chain. further Supply largely vertical of capabilities, our see gain chain opportunities improvements we broad expect integration dynamics manufacturing assess to XXXX. and Teleflex

and materials. to Turning sea improvement during elements were There inflation. freight XXXX, raw including of

somewhat further some assuming remains XXXX. costs are we but XXXX, relative For note to and disinflation, elevated historic levels that above are

constant X Now deeper growth dive refer a currency fourth turn reflect days for impact quarter. revenues basis, review a of the year-over-year, geographic results. fourth fewer rates the segment to I quarter are noted. to will negative let's with revenue All the shipping I unless begin that our and otherwise into of on our

Interventional, despite saw X Urology decrease driven Anesthesia the quarter. by days fewer and $XXX.X and businesses X.X% shipping year-over-year, were of growth reflective days fewer quarter. year-over-year million, in we particular, Surgical revenues in In Interventional the Vascular, Americas a and the the in shipping our

the of of adjusted decreased growth the shipping year-over-year, impact EMEA highest by the Surgical, products, revenues Vascular and driven days generated and of and quarter. $XXX.X the million Interventional days. reflective Urology in X.X% fewer businesses Anesthesia shipping

driven The growth XX.X% by performance increasing strong India strong with double-digit quarter execution region, Korea, million, $XX.X was were Revenues broad-based China. increases solid was underlying in the demand. Asia. to commercial year-over-year. and Turning Revenue in and across the

our category currency days. the year-over-year Let's Commentary the to X quarter by global fewer discussion reflects the be product global on shipping on basis revenue for and of category. a on fourth growth constant fourth quarter impact now a product move will also

growth shipping growth fourth a days improving, On quarter Vascular with and our Interventional line while basis, adjusted slowed. with the in and in sequential the expectations, Anesthesia trended rates Surgical

Along quarter by of to other with access Starting growth decreased shipping despite X.X% the for year-over-year the catheter impact fewer EZ-IO also from previously days. Access. days, The the fewer Revenue announced Vascular shipping reflected was million. $XXX.X led with growth year-over-year Endurance and headwinds the the recall.

impact PICC our business Of underlying negative achieved Endurance growth we recall. the when the excluding double-digit of note, in

We peripheral continue role. help the our to will a and markets, product see opportunities in access play for new share initiatives gains

we quarter, the navigation activities our for device PICC next-generation on continued new and our launch to During dialysis. execute

to Moving make drivers. growth the we was days, good our solid selling of to with Interventional. million, $XXX.X Revenue continue demonstrated we X.X% progress year-over-year. as which up fewer Despite the underscores our momentum impact positive growth,

Revenue million. performed Turning year-over-year to recover Among with products declines double-digit the recall, in from partially tubes in quarter, product growth, occurred hemostatic by offset atomization larger we as to earlier in categories, which Anesthesia. our ET strong $XX.X XXXX. declined the X.X% well and

against a In comparison. million, Surgical revenue X% business, was tough our down $XXX.X year-over-year

to surgical solid, trends franchise our core underlying portfolio. be including Our in our ligation continue

Titan $XX million. excess XXXX, generated For of revenues in

Palette, representing Revenues than Barrigel. better million, of $XX X.X%, was with expectations we which fourth an were October the of revenue in with modestly starting increase outperformance in Urology, acquired quarter Interventional XXXX. For

growth while and saw gaining remain as efforts initial reimbursement. plan launch on this For a with our in we activities a international challenge surgeons training of the China, UroLift, size stabilize office on remains to UroLift focus service. In in the continue a Japan, healthy our markets, revenue

year-over-year. with million continued $XX.X revenues XX.X% in micro recording broad-based increasing year-over-year all other strength growth, with OEM product $XX.X to Fourth quarter solid quarter in portfolio, XX.X% including another quarter, The our across had million. year-over-year declined strength was catheters. the revenue to categories

other majority of decline. fourth the for revenue and the year-over-year exit by quarter the disclosed, previously XXXX Medline revenues the December accounted early MSA reflects As of

completes my performance. comments the quarter That revenue on fourth

to updates. Turning and some commercial clinical

the I pleased our to on am report acquisition Palette tracking XX, the October Following that integration expectations. of Life is XXXX, to Sciences

sales field. legacy clinicians have We UroLift our and our reps issued interacting with and the dual-bag in cross-functional product sales force, selected training for now members completed are of

focus reduce radiation Our rectal is on to of that in a expanding the are use differentiated prostate remains Barrigel rectal of radiation with we spacer and and is proven exposure. spacer cancer, clinically significantly unwanted treatment urologists the engaging oncologists.

to UroLift. Moving

a safe study Journal, in expand goal of for treatment we reinforces invasive that position surgical in Prostate the and supports of Prosthetic effective, peer the minimally data the BPH. as Diseases, of the standard We foundation BPH. new treatment Cancer continue review to UroLift for system Nature as UroLift our November XXXX, a minimally highlighted and invasive clinical the use that In

a may Results XX of receive suggested that within retreatment whether X surgery, year they patients require GreenLight, or X regardless UroLift. in of Rezum TURP, BPH

Additionally, following requiring longest was The at a setting and to Rezum. average lowest first the UroLift, X the complication time procedural year, complications UroLift. for highest in the following return procedure outpatient was

the between TURP for publish At The trial X thereby to durability and was underscoring the of is retreatment UroLift system. GreenLight statistically UroLift. and controlled UroLift years, comparable lowest rate rates, similar retreatment for

XXXX. have for presentation and meetings clinical UroLift supporting been research on major with we focus to at urological continue that note in accepted data, sponsored X abstracts We have that

Turning unit. to update Surgical an business our to related

enable the the should for Bioabsorbable the with completed ability of GORE Reinforcement the offer SEAMGUARD material Teleflex We features further surgeon activities needs to have Titan preferences sleeve unique Material The launch in Stapler Titan synthetic be address Line buttressing clinical market. the the Staple and Stapler. used to gastrectomy alongside to

as with look number continue business to Lastly, we product of new into a across our launches we units. our will XXXX, advance introductions

flow we that clearance the and expect the in half unique marketing is FDA to balloon business, a inflated. the receive blood launch XXXX. balloon Ringer allows of through a design Interventional while our catheter vessel Ringer incorporates second to In

We launch label utilized a to that FDA but with indication, PTCA perforation trial will vessel enrollment seek will have expansion. be we in initially completed a

the we half clip our anticipate In second new an XXXX. polymer of automated Surgical including business, applier products, ligation in launching

continue also refresh during series to launches our a laryngoscope with the year. will We families of

on that Anesthesia business we new unit which base, XXXX. FDA of our user our in in business for including technology expect also updated approval expansion track is enable EZ-IO for launches, would Our product

We launch. more upon details will provide

That completes my prepared remarks.

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

Thomas Powell

Thanks, Liam, and good morning.

the revenue Given discussion performance, the company's I'll previous margins. of with begin

period. For cost was lower fluctuations adjusted quarter, The year-over-year increase the a foreign margin from inflation distribution-related price, to primarily Palette rates. improvement by in initiatives, acquisition, unfavorable year benefits partially prior was favorable the exchange increase and offset costs logistics due XX-basis-point the and cost versus continued and XX.X%, gross

Sciences of business, offset investments fourth the XXX-basis-point by in margin. was expenses operating expenses, XX.X% Adjusted and employee-related year-over-year decrease partially inclusion the operating margin the Life driven the the grow was gross The year-over-year increase of in quarter. flow-through primarily Palette by to

fund $XX.X income. Net interest the interest higher of acquisition $XX.X expense debt year to prior expense partially rates by quarter, the increase prior an interest in Palette, period. The fourth in utilized average year-over-year the increase in interest and year million million from the reflects totaled outstanding increased offset net higher versus

primarily in quarter additional Our rate of fourth prior of R&D tax in the increase our due which, the was in decrease such year change, in capitalization of XX.X% U.S. starting period. year-over-year a costs deductions result a the an XX.X% tax of adjusted to to costs, rate XXXX of is amortization compared for The law result in resulted tax as as tax XXXX. adjusted

incremental fourth from of versus in was bottom The share quarter dilution prior Palette acquisition of the related adjusted and year. EPS earnings Sciences per decrease year-over-year the $X.XX, Life the line, At decrease a X% borrowings. reflects

select operating attributable cash the XX flow in highlights. was of global chain stemming year to million operations to favorable payments, favorable was inventory the in months period. million were changes now volatility. compared The Cash million primarily and increase working from purchases due to to buildup the capital flow inventory tax the lower Turning from in capital lower for by The sheet prior $XXX.X prior changes primarily favorable results. $XXX.X balance driven $XXX.X and working in elevated supply year

XXXX. Moving cash million compared as million to sheet. to $XXX.X of the balance the end our end quarter, the $XXX was of as balance fourth the At of

payments to offset cash partially For due borrowings to flow. in net primarily fund the is XX the by acquisition, Palette cash and the operating proceeds months, from decrease

remains was Inclusive Sciences, acquisition the our Net position long-term of allocation to to our financial Life on capital of provide strategy. leverage at Palette quarter end execute X.Xx. sound, flexibility and continues approximately us

a Turning now to financial couple guidance. for items Starting of XXXX. discrete with

adjusted to be Palette is First, to $X.XX in in increasingly XXXX. share per we EPS. earnings fiscal expected dilutive expect adjusted the the continue to acquisition be company's to accretive transaction Beginning XXXX, to the year

services not of Second, transition previously associated XXXX, certain with revenues assets included from Teleflex note, respiratory $XX.X in disclosed, MSA in as repeat our in the which Of manufacturing will sale with agreement the million generated XXXX. XXXX. to Medline December

Moving to for outlook XXXX. our

growth currency million $XX.X We the of constant from are of expecting revenues in MSA the offset X.XX%. revenue X.XX% includes by XXXX incremental the loss to Palette. partly The growth year-over-year revenues,

Turning translation exchange. exchange foreign assume or to headwind approximately from XX million $X basis foreign We in points XXXX. to revenue

for foreign to exchange exchange X.XX. rate euro outlook of includes Our dollar approximately a

range XXXX, the approximately XXXX. Netting $X.XXX reported outlook, headwind implying of exchange XXX-basis-point incremental revenue growth exchange $X.XXX growth the dollar X.X% sales represents foreign Palette revenues, in expect foreign an in the to billion. a MSA loss headwinds billion and to we to of Considering of X.X% year-over-year

to Turning margins.

XXXX in the be range gross of XX% margin XX.XX%. to to expect We

Our impact by rights manufacturing offset efficiencies, the inflation the the the currency of Palette and partially the reflects exchange of year-over-year termination from impacts guidance gross changes foreign in margin MSA, and positive acquisition, rates.

operating the XX.XX% margin XXXX. to range for expect in be to XX.XX% of We

restructuring, inclusion Our of Life investments business. the gross and operating Palette for of to of margin positive guidance expenses reflects impact the grow the Sciences the and flow-through by offset

borrowings line. debt during associated items increase expense XXXX. majority planned the net in repayments approximate acquisition, interest reflects year-over-year The to interest XXXX. Net million Moving with the our offset by impact the expense below partially the Palette $XX outlook for of is of to expected

XXXX Our global to tax. add that for basis XXXX, tax points the to XXXX estimate of the XXX approximately X rate. favorable XXXX, Pillar not Pillar rate impact which mix, the is offset repeat impact reflects X expected to in approximately of by We items in minimum be will and XX% tax discrete

Turning to earnings.

We expect to be share a XXXX of adjusted earnings in $XX.XX per $XX.XX. range

in headwind of a our Our tax year-over-year adjusted $X.XX reflects Pillar termination of dilution outlook associated dilution the MSA, and EPS from due of $X.XX of from to the Palette, the acquisition minimum rate, with increase the the $X.XX tax. X primarily

half earnings $X.XX Based impact exchange, on share on of in there is to first exchange the the approximately roughly current headwind rates, to headwind negligible a is per foreign revenue, fall the to EPS quarter we of although Relative foreign year-over-year. expect to XXXX.

the these the is adjusting When items, exchange, and for constant end the underlying X% at XX% high of approximately the end including at growth foreign adjusted impact currency guidance guidance. of EPS of low negative

not revenues negligible $XXX modeling foreign year-over-year. for we we million for quarterly be reported your range million, provide guidance, do quarter $XXX in a a Although including the purposes, impact exchange of first expect to to

for back That I turn concludes to remarks. prepared to commentary. it Liam would my like now closing

Liam Kelly

key fourth Thanks, takeaways from of our the XXXX. Tom. In highlight closing, quarter I X will

XXXX. on we First, for commitments delivered our financial

$XX.XX. and earnings increased revenues currency per were share constant year, the X.X% For adjusted

XXXX while our initial guidance, at high end share range. per our earnings was revenue currency our constant growth adjusted exceeded of guidance, to the Compared

Our strong. execution remains

new launching are healthy. and remain products, margins We our

fourth Second, environment quarter growth we into provides macro a foundation the stable-to-improving performance XXXX. and for as head solid

Third, we strategy focus our will growth. continue to drive to durable on

in growth our on execute disciplined and drive capital long-term will margins creation. time, expand organic to our strategy We innovation enhance and value opportunities over allocation invest

Palette a That years. in of well, growth progressing is coming my remarks. and expect contributor prepared our be the to to we integration The acquisition the concludes meaningful

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

Operator

[Operator Instructions]

from with Patrick first Our Stanley. Morgan the comes question of line Wood

Patrick Andrew Wood

with bulk that understandably will the UroLift of a of are smaller. side you the lot bit obviously other little Barrigel, But of acquired we first a And as number you've kind Palette, guess obviously and the assets about I a one, got things. business. bit you're talk Barrigel Urology that combined with of building that that a on a platform that up of

just longer you essentially up is of Or it's guys kind fragmented that different Urology of how quite it to is question Is term given like kind in for now a interest in lot that industry, minds? much and interest mind? your with scaling that's something your you in of my overall, So quite done crossed a that market areas? is there's

Liam Kelly

the there in We our that a because ownership. spacing. UroLift isn't the well doesn't first We on. prostatectomy Urology of Surgical that Gap] world built performed is point business. the on with Barrigel XXXX. knew of our There very call in [Audio use surgical radical products. done one that for product carry expectations rectal we'll the beyond the main Palette momentum, our The in that in It's of And acquisition. quarter

Urology we before but are areas anything for Urology health. men's health else are There Palette integrate will do men's area We in the of disruption. definitely open an us, particular, within is to that interest in space, Patrick,

or some men's until market. innovation are to there came that the number had on parts of new similar to There in to fact no technologies BPH that had the health haven't of disruption been years, a UroLift

for fair, the But sheet, us, next Palette X integrate great know, in So of focus Patrick, is for be it area think as not men's we you Teleflex. into probably we to balance and are months, there thereafter, is our health, disruption areas an as within shape. in

a that of see would for expansion we area Teleflex. as So definite

Patrick Andrew Wood

interesting. as Super a through you've follow-up, of And quick obviously launches product lot 'XX. a then got moving

direction around environment that? jump the You but through as getting have the 'XX. 'XX gives feel confident that that your are LRP? big little in moving picture of are Is still that very dilutive you is is we you better. shock, to a bit accretive, moving that part what considerably why confidence Not in the inflation to things There's things from environment move

Liam Kelly

I about LRP. really good Yes. feel the

to is in our guide with year, headwind. X.XX% our XXX-basis-point did a start first we Obviously, with but the X.X%. revenue, year this X.XX% you If

growth So of into the I next the in those And this that that guidance, LRP, X.XX% the second is into to deliver X.XX% expecting LRP. head year, year the we adjusting year for year the springboard underlying we're feel be the ability and to our final headwinds. as current will the confident of

all it's execution. about me, For

a execute and each XXXX. minimum executed a is goal in inflation tougher -- for goals migrate -- that we're they we great but us did to my right margins. through our to all some brought there. XXXX get than XXXX achieving a and to well will And up path margins, at we quarter, as think the again asset to in goal still gross transparency, really then step community for think numbers think take us, our through had and we We've in And we asset are Palette, be in the as continue thought, and it I more get I I beating margin OpEx. And hopefully we a year. on the investment feel brought in we have that. we the to know this But year we've going think the to we've in

Operator

from Our next Raymond with Bedford James. comes the question line Jayson of

Jayson Bedford

Maybe was just on The the margin. strong. gross I wanted to about guide. 'XX quarter ask fourth

in basis have the base. what, then XXX points, you XX.X% bigger did, adds 'XX. have thought and I Palette, MSA revenue You you a

So all FX here? contemplating the are gross is on you're new the any margin I pressures guess, question headwind is, side? that my there Or

Thomas Powell

we acquisition Well, in point, to a the both MSA. the of benefit Palette from the your from nice from exit XXXX and get

number are is of to I margin. pre-pandemic. been both had that we've gross than What would it as still higher accretive inflation headwinds, had mentioned, those got So say Liam a is

offset as that you from some manufacturing, balance programs, the at of improvements, sheet will the balances our able as if savings footprint they're XXXX. the and capitalized look from rollout pricing, on those pressures P&L to well are total cost And savings favorable in in inflationary

wash. a of kind are those So

modest from to inflation experiencing headwinds, impact adverse foreign a exchange. the addition In also we're

Jayson Bedford

the of just maybe on then questioning. last pile line And Okay. to

synergies there's that any assume UroLift? guide? between effort, And and we selling the have can nothing Urology the you Barrigel On baked into selling seen

Liam Kelly

Jayson, in a can versus assume tell improvement baked QX. there's that will saw definitely you the QX for into I we you nothing guide. modest UroLift,

monitoring midpoint. $XX that The above X%. low pretty Interventional bit still million little million X.X% closely. Urology the expect it point we're at revenue So will approximately just guide deliver will We expect still a to of that grow Palette. for $XX We our assumes growth

They also comp of go most would tough I that, I through prudent, improvement we after X. The on But the some the it's our we from execute they deliver the reason out our I Jayson. without improvement is entire said But the feel And And And of no go continue think show have team, that impact our UroLift days' the expect X, the -- I to as against assumes to think that use quarter guidance the -- we as quarter right midpoint seasonality. a a I a quarter all and believe, is year. through gate. confident recent aspects in goal think, would I QX really there's it. earlier, we as our guidance, appropriately on that ability year. to as in

Operator

from RBC question line comes next Capital Singh Shagun Our Markets. the of with

Shagun Singh Chadha

on wanted XXXX just touch the guidance. to I

to especially line, calling relative X% about adjusted X% growth conservatism, believe X.Xx in that have growth. And delivering exit You're growth on I out. the strong Why about the the follow-up. XXXX? top headwind XXXX you to for for -- a I sorry, sales And called given then the onetime tailwinds EPS

Liam Kelly

Shagun. you, Thank

quarter really in end at of where the we we're happy XXXX landed look, X. So with

as starting X.XX%, guide year. same fourth that growth look If and low you the we X.X%. quarter. the get our say, And to year to you entire it's of will the at that at point at in Shagun, we delivered add percent in had we for low this point the delivered robust you last adjust point year, X.X% you if a X.XX%, I the days, exact the back

I think prudent. guide that the is

execute the go company, did go always can us, a I it has up sets the think I so year we been do as through we that that guide as what think goal. to XXXX, in our and as through year. us that we we the And allows

different the a IA as for they modest deliver. Urology, way the pieces I expect in Surgical guide, and Now would the I Surgical a our step Vascular Shagun, feel units. couple ability I take OEM from that and a are I there forward And about to about step business expect will because Interventional of would the anniversaried moving within I modest good have we've APAC Titan back. rate and think feel I growth to EMEA, Anesthesia. said, guided, And then good acquisition. and

Shagun Singh Chadha

can there any Liam, And Got interest it. short-term your us And accretive in how about top P&L especially relative then and updated thinking dilution line adjacencies? just you're you to M&A? on M&A, provide thinking

Liam Kelly

need you. ability you that. gives M&A I most without doing the we and have Yes. Well, us you're leverage X.Xx too think, as lots say Thank levered, much. when thing our I is firepower, always, of raising important We're which

We are of dilution. conscious

given have in that unfortunately, dilution. X a lot the things hitting right X feedback of thing investors Our doing XXXX, in Teleflex, always by us caused the but has year

causing if midpoint you And earnings some FX. X% our the some excluded to strong is obviously is which add MSA, But growth really bridge, you And dilution -- our really you and XX% the growth you you through those. the of the our as growth also in there. walked dilution causing have And positive. or underlying range have of up, -- of all per those Palette is Tom share is is

of we that. are cognizant So

in looking We are the out at assets. there marketplace

and Our will well feedback in family, investor thought continue dilution. that are assets M&A would the and to marketplace is team we with within the there that to Teleflex attractive busy fit we execute believe on the

Operator

Our comes with line of Matt the next Taylor from question Jefferies.

Michael Sarcone

Matt. Mike on Sarcone for is This

on in more moving big period. that XXXX but bunch a of swings Just we've or kind I guidance. through one particularly you the pre-COVID pieces, on mentioned is Understanding know base think elaborate a you do you a seasonality consistent provided can you year? XQ, the with shifts phasing helpful. of days first got which selling little But levels, in

phasing on color any you So more about year? you're how thinking the provide through can

Liam Kelly

Yes.

the quarter reason point you low X. year that said, quarter the improvement would you get But comps after and a this done through few the go is, consistent QX, fairly little has back the just would procedures bit remainder more of that get to you getting the be the it you came number then tough the think in of year mix of see normal since there. now And to I as normalized being. a and with that of once be would we Obamacare seasonality year, the for side, envision through X, quarter and quarter a seasonality is the there's to X, in I the X a due revenue the patients more would as from X, biggest been into a dampened and would So phenomenon years quarter

that be on expectation our So the line. revenue would

Michael Sarcone

it. Got

Just you sales follow-up be think in a XQ year, there. in each terms could see of When quick sales improvement dollars? XQ above you

Liam Kelly

QX, is talking be just always I'm with perspective QX that of QX, quarter be the QX once in through biggest revenue normal was general, the No, from QX, you above QX QX make that would to I point would trying Mike, low due that being and the that the get to point. a seasonality. low point

Operator

Our Wells Fargo. of the question Biegelsen with from next Larry line comes

Larry Biegelsen

And are your follow-up. what 'XX? was expectations what have price for Liam, And X in XXXX? I

Liam Kelly

question. Larry, thanks Yes, for the

goal XXXX, and exceeded that. of with So price we we our XX above came had good in points year basis in a

so we'd basis be at that hopeful XXXX to that year is third for pricing I'd this to again. goal points be able cycle, the hopeful deliver and of XX least Our basis the that is I'd another XX be deliver points,

Larry Biegelsen

helpful. That's

you comments I So I guided bit about margin, challenging for just it. to appreciate 'XX. appreciate XXXX. LRP the your I know being operating a

right underlying my growth imagine to is would could 'XX? beyond like think nice that guess to down Any there come pieces which would from X% expense, just to for are million EPS is, XXXX a consider And you? the the be I moving high-level So tailwind $XX and about thoughts 'XX? XX% question in I any interest way

Liam Kelly

per capable because margin I will reason is op that's in what I that therefore, of our the though underlying they're and If targets double we're would think business business earnings believe you is of Tom underlying And thereafter. Yes. just the don't even be digits give the single we mind? a calling get Thanks, interest, I think driving Larry. the the that we digits. do the might is doing, Tom, I high into the if ask don't out share well to that on for get a XXXX, there there? color that then but when business, just we get bit still doable challenge, shortly there mean

Thomas Powell

with Sure. Well, by play that fact some And thing from also the about XXXX then be what in in that into EPS is well MSA the and got and dilution will just will away, talking XXXX rate same we've the Palette. going XXXX. run

Our expectation that profitability is the Palette turns by XXXX.

flows some of P&L. through clear in be So those just takes it our time the but coming way it kind inventory, the marketplace, will the benefits. We're also down seeing inflation to

debt, that we inflation each so our XXXX trends we we're area. flow now, interest, right free guidance, the will in to that of if expectation that with using quarter outstanding Then improving continue some And cash should prepayable on regard be in our will year. to So front, pay the by reduce debt see our continue benefits XXX-basis-point then XXXX down also, of assuming in our rate to cut. we is

go see we expense So improving through and environment environment interest as XXXX. the interest -- year you an should into

Operator

of next line comes from Piper the Sandler. Our Matthew O'Brien question with

Matthew O'Brien

I rate currency is when make everything midpoint is the at adjusted. Just just to the it sure clarification on constant the midpoint the want adjusted, to everybody that's the for for growth when X.XX% call, clear. clear upfront is is assumption, everything X.X% fully make bottom line

Liam Kelly

Matt, the bottom line good, as think midpoints. you clarifying That's is that. math good your Yes, adjusted I top and Those be of you. line Thank for always. would

Matthew O'Brien

guys do. that's you And the the typically Got it. of what which Got it. is start year,

love than was So better would the guide because just know Vascular, tough, expecting Interventional. extra the year, doing I rest QX hear selling I'd for outlook well this I the comps be are but of on bit to understand the specifically. about don't have to so comfort actually I business was the QX there's if across and but is there a little Palette the days,

the think into the your growth actually over stack I it of then remainder an And implies acceleration year.

So new then love X again, that. but I don't to know hear if follow-up. just I And about quick products, cetera, that's have we'd do et

Liam Kelly

Yes, Matt.

roughly guide want other for our it if So would and the assume assume X% X% percent, into it growth, pieces. QX X.X% X.X% be would that to FX to to MSA put underlying normalized and the for would I moving

of little wee just and As product I a point, year. ramps said ramp in we through also, year have you be the to first because go your important the will just you'd this recall. bit lighter the would Palette be And a bit tough the go earlier, IUB due in Vascular through to as is in year. lighter as new Vascular the particular the quarter the comp,

products of number PICC a launched they the through We've the into and franchise year. new ramp as

of first as feel to in -- deliver back would of confident quarter we're hitting our degree ability team, Matt, in our the and February, number. confidence in Regarding we, end first that quarter, towards a the

I X. said, as And for we've done X

in as EPS a for X reached, we that's we're X a for going X to into to be the the following X for planning X then revenue for 'XX, do. not and of fact X, goal team, in quarters united go what until exceeded, year, the row. we and happy that least and X reset if ultimately we're we're and at our And not All

Matthew O'Brien

like of positioned side And on or some for just Larry's terms would it there's year, on Palette the headwinds that snapback upside next this I suspect to a question seem but these just you're of growth in then that. EPS year. Appreciate don't a facing you're meaningful this the of year. MSAs EPS to lot Okay.

in something that low year? even is and facing just headwinds of these mid-teens given of base thinking you're that So kind just all the off EPS kind of that in way am to this growth, I --

Liam Kelly

underlying patient you, let look, as And you'd and top forth. -- Tom will before 'XX. them go solid. you tell as appreciate Matt, I'd the and of little went 'XX headwinds, on Palette exclude on start EPS we have I'll help you But to through, and be back few anticipate if I'll us would a we so if such that the underlying. and through good to a bit growth, and so guiding The factors is interest that execute

a later Matt, to you in guide So year, 'XX mind. bit we'll the don't little if

Operator

question next comes Research. Polark from Mike line of the Wolfe with Our

Michael Polark

hey, Liam, on in M&A looking space? chain? to supply you're is your prepared and and will Is OEM to comment, doing be always to interest continuing comment on, it at in vertical that of you your curious further gain chain. that mentioned Or means. control what just more in integration I'm we're sourcing assess that better an the a opportunities supply

Liam Kelly

control, it's were pandemic was disruption other more our within it What the latter, when third-party to we as So chain on if the and we was supply side lot it of of we awful able vendors. Mike. discovered were reliant the an out hit better that manage than

in-house have And time. there over feel some are to bring subcomponents we ability that the we

suppliers as the our within margins, it it as subcomponent well. a at help So bring to attractive that's it's our it's latter, an we in, that's looking and your would supply given But question. obviously to chain. element really It

Michael Polark

It's on noncash I is a reconciliation $XXX non-GAAP item What's appreciate a had going Or $X.XX. pension I insignificant million, on item? number, that follow-up, that math an item? cash Is The charge, that. a There's XXXX. the there? if an GAAP the correct. for not to

Thomas Powell

It's a noncash item.

of whoever -- we and put fully go option, pensioners we'll a one take are in we'll buyout the place pension So we and essentially plans buyout exiting our didn't annuity then where for offered and them. funded an option,

a noncash. just So we're plan, pension it's but essentially, exiting

Operator

question next line Richard Securities. comes with from Our Truist of Newitter the

Lin Zhang

guide. just Titan Mike. -- in growth you incorporated if what assumptions Stapler also expectation your [indiscernible]. am on Not for if It's wondering around I sure the Zhang And the Lin of share appreciate

Liam Kelly

bad, line great I'm incredibly sorry, we're is hearing you. difficulty the having and

Thomas Powell

The what growth? on assumption

Lin Zhang

you Can hear now? me

Liam Kelly

better. little a That's

Lin Zhang

Can hear well? me Hello. you

Liam Kelly

Okay. That's better.

which the So on assumption your growth question? was

Lin Zhang

that. about Sorry

assumption Your guide. growth Titan in Stapler around you've the incorporated

Liam Kelly

you. couldn't apologize, well. you that Thank I Yes. we hear

to impact through We it that our return XXXX, will growth, thought a will it continue assume or the all the our is portion in in at went or the we I to say, expectation as good that of when do we grow, GLP-Xs impact grow XXXX. GLP-Xs rate in of it XXXX. of in should run that not now we levels Stapler, we Titan the transparency. have So acquired And the

proctoring The product buttress, but to itself. the of new it, it's procedure, as as line And in to launch well proctor in therefore, surgeons. product continuing with And continue market. of on use now and parts having our the our exceptionally with issues is and the XX% performing do surgeons. how greater Technically, No access give are recently -- we doesn't January We the our surgeons to buttress. Titan will with well. surgeons of us bring need was expectations, buttress will product

Lin Zhang

X another And Great. me. That's helpful. for also

step your growth. So shared of just expectation OEM slight a in back you

So the as still step of we the size -- think think back? like double-digit consider how grower? Should should we OEM about low

Liam Kelly

it's back. pointed to I a that take going step think I -- as Well, modest

or grew it XX% So last year. XX% around

continue and will execute. it back to as come So the area into we double-digit

So those in that will low Vascular, backs just like modest businesses point. be also step-ups double offset like digits isn't EMEA. and like a step in bear But geographically Anesthesia starting bad by mind

Operator

Our next of question Anthony the comes from Mizuho with Petrone Securities. line

Anthony Petrone

We've underlying companies MLR few here. seeing procedure print prints. Liam, managed a a We've running starting on procedures with talking been the just Maybe, it lot of about care from losses hot. seen just across the Nice volumes.

excluding underlying, the think that. also I shows for days Teleflex here

procedure then have the volumes a So I'll U.S., as the maybe question of and to state the specific OUS on follow-up. just X geographic union

Liam Kelly

Anthony. Sure, Yes.

acute seeing hospital. the are procedure we what is solid So in volumes

that. We see continue to We're to prepandemic back levels.

procedural XXXX, view product a a we're those continue launches. into I And it. new think plethora help what also launches product even of seeing augment benefiting executing of will hospital. the we're point within from We're and from well against

hospital. you very in know, a as environment we it's acute -- So the space. really positive And care that like we Anthony,

Anthony Petrone

And at levels. helpful China, the still things hearing pivoting coming VBP, Very we're different are No. different programs then to provincial various there out about for that color.

just you years just a medium everyone's And of be on where lot more but this VBP? focused term. really think any a So a given to pricing so China the China update down standpoint are on from Teleflex we conference come the on up have maybe over market X has geopolitically? But is X things calls, VBP doggedly that term do don't broader should question, of I near next and modeling

Liam Kelly

Yes.

So there together running a and series coming are provinces volume-based of procurement tenders.

I We and XXXX. think we're in gone provinces. some amalgamations the through in you have of tenders, saw in now of that we participated the and national phase those of XXXX,

for continued double-digit Teleflex. real that a be to China was solid While grower happening,

around portfolio So sell And Teleflex, volume-based very, I We in Anesthesia procurement. think of the in our that, our for strategies have of portfolio unique China. We there. sell of nothing most sell our only Drainage Urology we we products little China. practically very

there our VBP. a be the of and company. coated as little our And Surgical businesses they're a But know, and we for you And are impact pricing products, will are our offset CVCs, main business. had there by levels business our of Our in less because our discount Teleflex, as differentiation Interventional bit from volume. an being positive

on what's strategies capable than around within certain procurement. China of our we're more going of So managing with volume-based

growth that longer I will for China as I'm And one think that in Teleflex for a So geography positive as the the provide company. still a it's term on company.

Operator

of Bijou next America. Our with Craig the line the comes question from Bank of

Craig Bijou

the I a 'XX? what think want to in And made I to And bucket. 'XX about expectations with and 'XX? grow. comment high-growth growth start product in How investments growth was about think to for Tom

invest broadly, impact? these of think So maybe your the some you do to margin high-growth considering products about behind how need and more

Liam Kelly

Yes.

portfolio continues So the contributions, high-growth to particularly portfolio. penetrate performed market. thinking well that were very XXXX. standout some MANTA I'm in There intra-osseous, of hemostatic really the products really

this obviously, grow expect than percent the around year in We durable that's other would of to XX.X%, in to MSA, that range. would XX% But in it the of a for the expect the XX-ish again the somewhere region the If percent. to you X% there. look XXXX, last year the better is category to forward did offset into XX-ish decline in we going around high and X% do bit growth high core little to or the because growth

because in it behind investment it's the behind just much to growth, better all transparency it, Craig, margin. is invest Regarding the easier high

So statement. benefit number because and additional the you the of the get within those investment. to growth even been And top the it of and buckets brings for margin drop-through with high-growth our been, behind the that focus this margin of income has the has years, always investment our from mix last our profile

Craig Bijou

service that's Japan, challenges a launch some on office U.S. just if And seeing the or UroLift. do still ask U.S.? in the expectations for highlighted growth? in in follow-up the there other What of medium-term we the then how the about I on sites longer-term about can you Great. And The business, think

Liam Kelly

Japan, then I'll of Yes. about with I'll start sites and service. talk the

we're told exceptionally Taiwan we're India, doing in sure, in we're investors executing early The with very is and Japan geographically, and is Also They're is in It's really line expectations. those for doing. So smaller, well. and very Japan our Japan we geographies. do, ramping early there would very in What China. well. team days

China product start to point China, be public listed once in inflection the we the get for the to system, work continue the getting listed in and products. will on of We XXXX more

but site QX, was in change the hospital in that to there. again of it's regard we because challenging is just the unfortunately, for With grew office, reimbursement of again, the still us service sites made of service, -- the

Operator

Our from next line question Kristen CL the comes Stewart with of King.

Kristen Stewart

on The and nicely very quarter basis. business currency the for grew this Interventional year in a full constant XX%

XXXX? You'd mentioned how sustainable you very what's it was there. well you expand and driving into going feel that continuing MANTA to do is just Can upon growth,

Liam Kelly

Yes, Kristen.

And comp. areas will modest have take have said and have tough the day step ebbs of I I the at will tough year. aspect. will you mean have other we're back. comp that's a as to that it's it by will end portfolio So will forward. grow, that take businesses they'll that continue will earlier, be a a one because a these offset a step it of MANTA the but It And the company flows. why next

that, But we competitor they're continue back QX, execute of in products. notwithstanding growth lifeblood to the is And to that in the well business. in off new market nice QX. this the was really there. We unit continue business back see was pump The

year. new into cadence of we And over as coming really force. We've the suite of launched of good GuideLiner We have sales years, the the Coast last have really nice products. year. next the the going a products through of We we this number got go Ringer hands a

happy how with I'm really So business the well. is going Interventional

really Obviously, intra-osseous continues help well drive control is there. had the well, solid very the growth. quarter to That a X within as on perform to

Kristen Stewart

understand sure your LRP. make I around the I comments just to want 'XX and

confident margins to it be achieve gross to hit tougher pretty being about going margin to So sounds line, Is forecast. correct? that that you operating are the but like able feel

Liam Kelly

was have could there Kristen. potential get I get mean, That's It's what I of tougher to by end end we Yes. there I we a the get think there, there. saying, and of by to Will 'XX. path we the get 'XX?

margin gross and EPS solid. there, again, solid get is through will definitely We a bit underlying underlying longer. just revenue your couple a as And of the path it and path might EPS take we've to the to gone colleagues, wee solid with the line

Operator

& Needham from the Mike question Matson comes Company. line of Our final with

Michael Matson

Barrigel. know obviously, But there's within ask think with going talked a of about to after. to Palette opportunity types prostate that on potential you've I big into wanted expand you're I Just cancer. other

there and have get whether to timing to talk the So can do indications? not about or trials those you you

Liam Kelly

is It indication. the our expanding within are We model.

do to there. clinical to get order trials in have will We

would this out expanded you're get go about with on very have in Mike, city be the don't as help details obviously, have we enrolling indication would that begun want oncologists, mapping the call, in, into relationship you the -- as because the as competitors. and to that part of as key order build us And live I investigators in radiation We with that. what we aware, to urologists they a well we indication.

Michael Matson

there? about can I and there, in you kind China, Yes, by competitive I I'm pocket something your something that's know ton the size out just whether understand. BPH talked treatments sure people is just there's it of And a of But this then for is you government then even payers, Or the covered of these obviously, not that's about there. on talk list landscape? insurance? And

Liam Kelly

Yes.

everywhere far is don't is that is the in so they so be TURP get But tenders. your China try right, population. on regional you're within of to in as to China China. to pharma-focused The tend that is the it's that main So nuance that they as similar within such in far all is landscape where is used men step procedure other is listed herbal else will works is within first a huge The the that. remedies it way it on it

out Beijing, in And to hospital. process covers be any So going procedure they to pocket is now total that general start. apply in thereafter, then the a those of in through pay when to for the some never cost reimbursement. to population an the of in China Shanghai provinces. go out-of-pocket have always obvious there's and place X used and we're procedure, Mike, of big That would The reimbursement you

Operator

call now the would to for Keusch Lawrence turn like over Mr. closing to remarks. I

Lawrence Keusch

concludes and Teleflex today. you everyone Conference Thank us joined thank Fourth that on Quarter Call. you, call Mandeep, Earnings Inc. the This XXXX to the

Operator

is all we have the this morning. for time questions That

concluded. for all participation. now is Thank today for your call conference Our you

Teleflex (TFX) 22 Feb 242023 Q4 Earnings call transcript