Date of Report (Date of Earliest Event Reported) | February 23, 2016 |
Delaware | 1-5353 | 23-1147939 |
(State or Other Jurisdiction of Incorporation or Organization) | (Commission File Number) | (IRS Employer Identification No.) |
550 East Swedesford Road, Suite 400, Wayne, Pennsylvania | 19087 | |
(Address of Principal Executive Offices) | (Zip Code) | |
Registrant’s Telephone Number, Including Area Code | (610) 225-6800 |
Not applicable |
(Former Name or Former Address, If Changed Since Last Report) |
Type of cost | Total estimated amount expected to be incurred |
Employee termination benefits | $14 million to $18 million |
Facility closure and other exit costs (1) | $2 million to $3 million |
Accelerated depreciation charges | $10 million to $13 million |
Other (2) | $8 million to $10 million |
$34 million to $44 million |
Date: February 25, 2016 | TELEFLEX INCORPORATED By: /s/ Thomas E. Powell Name: Thomas E. Powell Title: Executive Vice President and Chief Financial Officer |
Exhibit No. | Description | |
99.1 | Earnings Press Release, dated February 25, 2016 | |
99.2 | Earnings Conference Call Slide Presentation |
FOR IMMEDIATE RELEASE | February 25, 2016 |
Three Months Ended | % Increase/ (Decrease) | |||||||||||||
December 31, 2015 | December 31, 2014 | Constant Currency | Foreign Currency | Total Change | ||||||||||
(Dollars in millions) | ||||||||||||||
Vascular North America | $ | 90.3 | $ | 82.3 | 10.3 | % | (0.7) | % | 9.6 | % | ||||
Surgical North America | 43.1 | 40.8 | 6.9 | % | (1.3) | % | 5.6 | % | ||||||
Anesthesia North America | 50.6 | 47.7 | 6.8 | % | (0.7) | % | 6.1 | % | ||||||
EMEA | 135.2 | 147.0 | 3.6 | % | (11.6) | % | (8.0) | % | ||||||
Asia | 69.2 | 63.6 | 18.0 | % | (9.0) | % | 9.0 | % | ||||||
OEM | 37.8 | 35.0 | 10.3 | % | (2.3) | % | 8.0 | % | ||||||
All Other | 58.3 | 59.6 | 0.2 | % | (2.3) | % | (2.1) | % | ||||||
Total | $ | 484.5 | $ | 476.0 | 7.4 | % | (5.6) | % | 1.8 | % |
Type of cost | Total estimated amount expected to be incurred |
Employee termination benefits | $14 million to $18 million |
Facility closure and other exit costs (1) | $2 million to $3 million |
Accelerated depreciation charges | $10 million to $13 million |
Other (2) | $8 million to $10 million |
Total | $34 million to $44 million |
(1) | Includes costs to transfer product lines among facilities and outplacement and employee relocation costs. |
(2) | Consists of other costs directly related to the Plan, including project management, legal and other regulatory costs. |
Low | High | |||
Forecasted 2016 GAAP revenue growth | 3.0 | % | 4.0 | % |
Estimated impact of foreign currency fluctuations | 2.0 | % | 2.0 | % |
Forecasted 2016 constant currency revenue growth | 5.0 | % | 6.0 | % |
Low | High | |||||
Diluted earnings per share attributable to common shareholders | $4.92 | $4.99 | ||||
Restructuring, impairment charges and special items, net of tax | $1.00 | $1.05 | ||||
Intangible amortization expense, net of tax | $0.90 | $0.93 | ||||
Amortization of debt discount on convertible notes, net of tax | $0.18 | $0.18 | ||||
Adjusted diluted earnings per share | $7.00 | $7.15 |
Quarter Ended - December 31, 2015 | |||||||||||||||||
Cost of goods sold | Selling, general and administrative expenses | Research and development expenses | Restructuring and other impairment charges | Interest expense, net | Income taxes | Net income (loss) attributable to common shareholders from continuing operations | Diluted earnings per share available to common shareholders | Shares used in calculation of GAAP and adjusted earnings per share | |||||||||
GAAP Basis | $224.2 | $148.2 | $13.2 | $2.1 | $13.6 | ($7.6) | $90.6 | $1.88 | 48,323 | ||||||||
Adjustments | |||||||||||||||||
Restructuring and other impairment charges | — | — | — | 2.1 | — | 0.8 | 1.3 | $0.03 | — | ||||||||
Losses and other charges, net (A) | 1.9 | (3.1) | — | — | — | 0.3 | (1.5) | ($0.03) | — | ||||||||
Amortization of debt discount on convertible notes | — | — | — | — | 3.4 | 1.2 | 2.1 | $0.04 | — | ||||||||
Intangible amortization expense | — | 17.1 | — | — | — | 4.6 | 12.5 | $0.26 | — | ||||||||
Tax adjustment (B) | — | — | — | — | — | 14.9 | (14.9) | ($0.31) | — | ||||||||
Shares due to Teleflex under note hedge (C) | — | — | — | — | — | — | — | $0.14 | (3440) | ||||||||
Adjusted basis | $222.3 | $134.2 | $13.2 | — | $10.2 | $14.2 | $90.2 | $2.01 | 44,883 | ||||||||
Quarter Ended - December 31, 2014 | |||||||||||||||||
Cost of goods sold | Selling, general and administrative expenses | Research and development expenses | Restructuring and other impairment charges | Interest expense, net | Income taxes | Net income (loss) attributable to common shareholders from continuing operations | Diluted earnings per share available to common shareholders | Shares used in calculation of GAAP and adjusted earnings per share | |||||||||
GAAP Basis | $235.0 | $153.3 | $17.2 | $1.4 | $16.6 | $0.4 | $51.8 | $1.10 | 47,112 | ||||||||
Adjustments | |||||||||||||||||
Restructuring and other impairment charges | — | — | — | 1.4 | — | 0.5 | 0.8 | $0.02 | — | ||||||||
Losses and other charges, net (A) | 2.1 | 1.0 | — | — | — | 1.1 | 2.0 | $0.04 | — | ||||||||
Amortization of debt discount on convertible notes | — | — | — | — | 3.1 | 1.1 | 2.0 | $0.04 | — | ||||||||
Intangible amortization expense | — | 13.9 | — | — | — | 3.5 | 10.4 | $0.22 | — | ||||||||
Tax adjustment (B) | — | — | — | — | — | 3.8 | (3.8) | ($0.08) | — | ||||||||
Shares due to Teleflex under note hedge (C) | — | — | — | — | — | — | — | $0.09 | (2,990) | ||||||||
Adjusted basis | $232.9 | $138.4 | $17.2 | — | $13.5 | $10.5 | $63.3 | $1.43 | 44,122 |
Teleflex gross profit as-reported | $260.3 |
Teleflex gross margin as-reported | 53.7% |
Losses and other charges, net (D) | 1.9 |
Adjusted Teleflex gross profit | $262.2 |
Adjusted Teleflex gross margin | 54.1% |
Teleflex revenue as-reported | $484.5 |
Teleflex income from continuing operations before interest and taxes | $96.7 |
Teleflex income from continuing operations before interest and taxes margin | 20.0% |
Restructuring and other impairment charges | 2.1 |
Losses and other charges, net (D) | (1.2) |
Intangible amortization expense | 17.1 |
Adjusted Teleflex income from continuing operations before interest, taxes and intangible amortization expense | $114.8 |
Adjusted Teleflex income from continuing operations before interest, taxes and intangible amortization expense margin | 23.7% |
Teleflex revenue as-reported | $484.5 |
Year Ended - December 31, 2015 | ||||||||||||||||||||||
Cost of goods sold | Selling, general and administrative expenses | Research and development expenses | Restructuring and other impairment charges | (Gain) loss on sale of business and assets | Interest expense, net | Loss on extinguishment of debt, net | Income taxes | Net income (loss) attributable to common shareholders from continuing operations | Diluted earnings per share available to common shareholders | Shares used in calculation of GAAP and adjusted earnings per share | ||||||||||||
GAAP Basis | $865.3 | $569.0 | $52.1 | $7.8 | ($0.4) | $60.8 | $10.5 | $7.8 | $236.0 | $4.91 | 48,058 | |||||||||||
Adjustments: | ||||||||||||||||||||||
Restructuring and other impairment charges | — | — | — | 7.8 | — | — | — | 2.9 | 4.9 | $0.10 | — | |||||||||||
Losses and other charges, net (E) | 9.4 | (6.1) | — | — | (0.4) | — | — | 2.5 | 0.4 | $0.01 | — | |||||||||||
Amortization of debt discount on convertible notes | — | — | — | — | — | 13.2 | — | 4.8 | 8.4 | $0.17 | — | |||||||||||
Intangible amortization expense | — | 62.4 | — | — | — | — | — | 16.6 | 45.8 | $0.95 | — | |||||||||||
Loss on extinguish-ment of debt, net | — | — | — | — | — | — | 10.5 | 3.8 | 6.6 | $0.14 | — | |||||||||||
Tax adjustment (F) | — | — | — | — | — | — | — | 19.0 | (19.0) | ($0.39) | — | |||||||||||
Shares due to Teleflex under note hedge (G) | — | — | — | — | — | — | — | — | — | $0.44 | (3,350) | |||||||||||
Adjusted basis | $855.8 | $512.7 | $52.1 | — | — | $47.6 | — | $57.4 | $283.2 | $6.33 | 44,708 | |||||||||||
Year Ended - December 31, 2014 | ||||||||||||||||||||||
Cost of goods sold | Selling, general and administrative expenses | Research and development expenses | Restructuring and other impairment charges | (Gain) loss on sale of business and assets | Interest expense, net | Loss on extinguishment of debt, net | Income taxes | Net income (loss) attributable to common shareholders from continuing operations | Diluted earnings per share available to common shareholders | Shares used in calculation of GAAP and adjusted earnings per share | ||||||||||||
GAAP Basis | $897.4 | $578.7 | $61.0 | $17.9 | — | $64.8 | — | $28.7 | $190.4 | $4.10 | 46,470 | |||||||||||
Adjustments: | ||||||||||||||||||||||
Restructuring and other impairment charges | — | — | — | 17.9 | — | — | — | 5.2 | 12.7 | $0.27 | — | |||||||||||
Losses and other charges, net (E) | 4.9 | (1.1) | 0.1 | — | — | — | — | 3.1 | 0.9 | $0.02 | — | |||||||||||
Amortization of debt discount on convertible notes | — | — | — | — | — | 12.2 | — | 4.5 | 7.7 | $0.17 | — | |||||||||||
Intangible amortization expense | — | 60.9 | — | — | — | — | — | 17.4 | 43.5 | $0.94 | — | |||||||||||
Loss on extinguish-ment of debt, net | — | — | — | — | — | — | — | — | — | — | — | |||||||||||
Tax adjustment (F) | — | — | — | — | — | — | — | 4.0 | (4.0) | ($0.09) | — | |||||||||||
Shares due to Teleflex under note hedge (G) | — | — | — | — | — | — | — | — | — | $0.33 | (2,738) | |||||||||||
Adjusted basis | $892.5 | $518.8 | $60.9 | — | — | $52.5 | — | $62.8 | $251.2 | $5.74 | 43,732 |
December 31, 2015 | December 31, 2014 | ||||
(Dollars in thousands) | |||||
Note payable and current portion of long term borrowings | $ | 419,942 | $ | 368,401 | |
Long term borrowings | 646,000 | 700,000 | |||
Unamortized debt discount | 22,999 | 36,197 | |||
Total debt obligations | 1,088,941 | 1,104,598 | |||
Less: cash and cash equivalents | 338,366 | 303,236 | |||
Net debt obligations | $ | 750,575 | $ | 801,362 |
Three Months Ended December 31, | Year Ended December 31, | |||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||
(Dollars and shares in thousands, except per share) | ||||||||||||||
Net revenues | $ | 484,501 | $ | 476,008 | $ | 1,809,690 | $ | 1,839,832 | ||||||
Cost of goods sold | 224,185 | 234,993 | 865,287 | 897,404 | ||||||||||
Gross profit | 260,316 | 241,015 | 944,403 | 942,428 | ||||||||||
Selling, general and administrative expenses | 148,217 | 153,265 | 568,982 | 578,657 | ||||||||||
Research and development expenses | 13,221 | 17,237 | 52,119 | 61,040 | ||||||||||
Restructuring and other impairment charges | 2,131 | 1,358 | 7,819 | 17,869 | ||||||||||
Gain on sale of assets | — | — | (408) | — | ||||||||||
Income from continuing operations before interest, loss on extinguishment of debt and taxes | 96,747 | 69,155 | 315,891 | 284,862 | ||||||||||
Interest expense | 13,638 | 16,808 | 61,323 | 65,458 | ||||||||||
Interest income | (79) | (212) | (532) | (706) | ||||||||||
Loss on extinguishment of debt | — | — | 10,454 | — | ||||||||||
Income from continuing operations before taxes | 83,188 | 52,559 | 244,646 | 220,110 | ||||||||||
Taxes on income from continuing operations | (7,577) | 426 | 7,838 | 28,650 | ||||||||||
Income from continuing operations | 90,765 | 52,133 | 236,808 | 191,460 | ||||||||||
Operating loss from discontinued operations | (298) | (1,541) | (1,730) | (3,407) | ||||||||||
Tax (benefit) on loss from discontinued operations | (10,815) | (353) | (10,635) | (698) | ||||||||||
Gain (loss) on discontinued operations | 10,517 | (1,188) | 8,905 | (2,709) | ||||||||||
Net income | 101,282 | 50,945 | 245,713 | 188,751 | ||||||||||
Less: Income from continuing operations attributable to noncontrolling interest | 158 | 307 | 850 | 1,072 | ||||||||||
Net income attributable to common shareholders | $ | 101,124 | $ | 50,638 | $ | 244,863 | $ | 187,679 | ||||||
Earnings per share available to common shareholders: | ||||||||||||||
Basic: | ||||||||||||||
Income from continuing operations | $ | 2.18 | $ | 1.25 | $ | 5.68 | $ | 4.60 | ||||||
Income (loss) on discontinued operations | 0.25 | (0.03) | 0.21 | (0.06) | ||||||||||
Net income | $ | 2.43 | $ | 1.22 | $ | 5.89 | $ | 4.54 | ||||||
Diluted: | ||||||||||||||
Income from continuing operations | $ | 1.88 | $ | 1.10 | $ | 4.91 | $ | 4.10 | ||||||
Income (loss) on discontinued operations | 0.21 | (0.03) | 0.19 | (0.06) | ||||||||||
Net income | $ | 2.09 | $ | 1.07 | $ | 5.10 | $ | 4.04 | ||||||
Dividends per share | $ | 0.34 | $ | 0.34 | $ | 1.36 | $ | 1.36 | ||||||
Weighted average common shares outstanding: | ||||||||||||||
Basic | 41,606 | 41,425 | 41,558 | 41,366 | ||||||||||
Diluted | 48,323 | 47,112 | 48,058 | 46,470 | ||||||||||
Amounts attributable to common shareholders: | ||||||||||||||
Income from continuing operations, net of tax | $ | 90,607 | $ | 51,826 | $ | 235,958 | $ | 190,388 | ||||||
Income (loss) from discontinued operations, net of tax | 10,517 | (1,188) | 8,905 | (2,709) | ||||||||||
Net income | $ | 101,124 | $ | 50,638 | $ | 244,863 | $ | 187,679 |
December 31, | |||||
2015 | 2014 | ||||
(Dollars and shares in thousands) | |||||
ASSETS | |||||
Current assets | |||||
Cash and cash equivalents | $ | 338,366 | $ | 303,236 | |
Accounts receivable, net | 262,416 | 273,704 | |||
Inventories, net | 330,275 | 335,593 | |||
Prepaid expenses and other current assets | 37,507 | 35,697 | |||
Prepaid taxes | 30,895 | 40,256 | |||
Assets held for sale | 6,972 | 7,422 | |||
Total current assets | 1,006,431 | 995,908 | |||
Property, plant and equipment, net | 316,123 | 317,435 | |||
Goodwill | 1,295,852 | 1,323,553 | |||
Intangibles assets, net | 1,199,975 | 1,216,720 | |||
Investments in affiliates | 152 | 1,150 | |||
Deferred tax assets | 2,341 | 4,011 | |||
Other assets | 57,642 | 64,010 | |||
Total assets | $ | 3,878,516 | $ | 3,922,787 | |
LIABILITIES AND EQUITY | |||||
Current liabilities | |||||
Current borrowings | $ | 419,942 | $ | 368,401 | |
Accounts payable | 66,305 | 64,100 | |||
Accrued expenses | 64,017 | 72,383 | |||
Current portion of contingent consideration | 7,291 | 11,276 | |||
Payroll and benefit-related liabilities | 84,658 | 85,442 | |||
Accrued interest | 7,480 | 9,169 | |||
Income taxes payable | 8,059 | 13,768 | |||
Other current liabilities | 8,960 | 8,230 | |||
Total current liabilities | 666,712 | 632,769 | |||
Long-term borrowings | 646,000 | 700,000 | |||
Deferred tax liabilities | 315,983 | 399,203 | |||
Pension and postretirement benefit liabilities | 149,441 | 167,241 | |||
Noncurrent liability for uncertain tax positions | 40,400 | 50,884 | |||
Other liabilities | 48,887 | 58,991 | |||
Total liabilities | 1,867,423 | 2,009,088 | |||
Commitments and contingencies | |||||
Common shareholders’ equity | |||||
Common shares, $1 par value Issued: 2015 - 43,517 shares; 2014 - 43,420 shares | 43,517 | 43,420 | |||
Additional paid-in capital | 440,127 | 422,394 | |||
Retained earnings | 2,016,176 | 1,827,845 | |||
Accumulated other comprehensive loss | (371,124) | (260,895) | |||
2,128,696 | 2,032,764 | ||||
Less: Treasury stock, at cost | 119,424 | 121,455 | |||
Total common shareholders’ equity | 2,009,272 | 1,911,309 | |||
Noncontrolling interest | 1,821 | 2,390 | |||
Total equity | 2,011,093 | 1,913,699 | |||
Total liabilities and equity | $ | 3,878,516 | $ | 3,922,787 |
Year Ended December 31, | |||||||
2015 | 2014 | ||||||
(Dollars in thousands) | |||||||
Cash flows from operating activities of continuing operations: | |||||||
Net income | $ | 245,713 | $ | 188,751 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
(Income) loss from discontinued operations | (8,905) | 2,709 | |||||
Depreciation expense | 46,013 | 50,207 | |||||
Amortization expense of intangible assets | 62,380 | 60,926 | |||||
Amortization expense of deferred financing costs and debt discount | 16,941 | 15,897 | |||||
Loss on extinguishment of debt | 10,454 | — | |||||
Changes in contingent consideration | (4,576) | (7,418) | |||||
Impairment of long-lived assets | — | — | |||||
Stock-based compensation | 14,467 | 12,227 | |||||
Net gain on sales of businesses and assets | (408) | — | |||||
Deferred income taxes, net | (54,413) | (14,153) | |||||
Other | (20,775) | (8,968) | |||||
Changes in operating assets and liabilities, net of effects of acquisitions and disposals: | |||||||
Accounts receivable | 398 | 9,394 | |||||
Inventories | (8,371) | (15,531) | |||||
Prepaid expenses and other current assets | (3,027) | 1,422 | |||||
Accounts payable and accrued expenses | (117) | 9,818 | |||||
Income taxes receivable and payable, net | 7,672 | (15,040) | |||||
Net cash provided by operating activities from continuing operations | 303,446 | 290,241 | |||||
Cash flows from investing activities of continuing operations: | |||||||
Expenditures for property, plant and equipment | (61,448) | (67,571) | |||||
Payments for businesses and intangibles acquired, net of cash acquired | (93,808) | (45,777) | |||||
Proceeds from sales of businesses and assets | 408 | 5,251 | |||||
Investments in affiliates | — | (40) | |||||
Net cash used in investing activities from continuing operations | (154,848) | (108,137) | |||||
Cash flows from financing activities of continuing operations: | |||||||
Proceeds from new borrowings | 288,100 | 250,000 | |||||
Reduction in borrowings | (303,757) | (480,102) | |||||
Debt extinguishment, issuance and amendment fees | (9,017) | (4,494) | |||||
Proceeds from share based compensation plans and the related tax impacts | 4,994 | 4,245 | |||||
Payments to noncontrolling interest shareholders | (1,343) | (1,094) | |||||
Payments for contingent consideration | (8,028) | — | |||||
Dividends | (56,532) | (56,258) | |||||
Net cash (used in) financing activities from continuing operations | (85,583) | (287,703) | |||||
Cash flows from discontinued operations: | |||||||
Net cash used in operating activities | (2,636) | (3,676) | |||||
Net cash used in discontinued operations | (2,636) | (3,676) | |||||
Effect of exchange rate changes on cash and cash equivalents | (25,249) | (19,473) | |||||
Net increase (decrease) in cash and cash equivalents | 35,130 | (128,748) | |||||
Cash and cash equivalents at the beginning of the year | 303,236 | 431,984 | |||||
Cash and cash equivalents at the end of the year | $ | 338,366 | $ | 303,236 | |||
Supplemental Cash Flow Information: | |||||||
Cash interest paid | $ | 45,973 | $ | 49,797 | |||
Income taxes paid, net of refunds | $ | 56,079 | $ | 52,869 |
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