EX-99.1 2 d531385dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

 

LOGO

 

Contact:   Jake Elguicze

Treasurer and Vice President of Investor Relations

610-948-2836

 

FOR IMMEDIATE RELEASE

     April 30, 2013   

TELEFLEX REPORTS FIRST QUARTER 2013 RESULTS

Revenues Rise 8.2% to $411.9 million; up 8.2% on Constant Currency Basis

GAAP Diluted EPS of $0.64; Adjusted Diluted EPS of $1.03

Reaffirms 2013 Guidance Ranges for Constant Currency Revenue Growth of 11% to 13% and Adjusted

Diluted EPS of $4.70 to $4.90

Limerick, PA — Teleflex Incorporated (NYSE: TFX) today announced financial results for the first quarter ended March 31, 2013.

First quarter 2013 net revenues were $411.9 million, an increase of 8.2% over the prior year period. Excluding the impact of foreign currency fluctuations, first quarter 2013 net revenues also increased 8.2% over the prior year period.

First quarter 2013 GAAP diluted earnings per share from continuing operations were $0.64, as compared to a loss of ($6.97) in the prior year period. The prior year period loss reflects a goodwill impairment charge of $332.1 million resulting from a reorganization of the Company’s business unit reporting structure. First quarter 2013 adjusted diluted earnings per share from continuing operations were $1.03, as compared to $0.99 in the prior year period, an increase of 4.0%.

“Overall, in the first quarter, I am pleased with the progress Teleflex has made on its operating initiatives,” said Benson Smith, Chairman, President and CEO. “The Company delivered high single-digit revenue growth and year-over-year earnings per share expansion, despite being impacted by headwinds such as two fewer shipping days compared to last year’s first quarter, the medical device tax and the impact of our convertible notes on our weighted average shares calculation due to the appreciation in our stock price. We remain focused on executing our strategic plan and capturing additional share in the markets we serve, while remaining committed to rationalizing our cost base to generate increased profitability for our shareholders.”

FIRST QUARTER NET REVENUE BY PRODUCT GROUP AND SEGMENT

Product Group Revenues

Critical Care first quarter 2013 net revenues were $287.0 million, an increase of 12.0% compared to the prior year period. Excluding the impact of foreign currency fluctuations, first quarter 2013 net revenues also increased 12.0% compared to the prior year period. The increase in constant currency revenue growth was due to higher sales of anesthesia and urology products. The growth in sales of anesthesia products was primarily due to the contribution from the LMA International N.V. (“LMA”) acquisition, which occurred in October of 2012. Constant currency sales growth was partially offset by a decline in sales of vascular access and respiratory products, as well as the impact of fewer shipping days in the quarter as compared to the first quarter of 2012.


Surgical Care first quarter 2013 net revenues were $74.7 million, an increase of 3.6% compared to the prior year period. Excluding the impact of foreign currency fluctuations, first quarter 2013 net revenues increased 3.3% compared to the prior year period. The increase in constant currency revenue growth was due to higher sales of ligation and access products, partially offset by a decline in sales of chest drainage and general surgical instrument products, as well as the impact of fewer shipping days in the quarter as compared to the first quarter of 2012.

Cardiac Care first quarter 2013 net revenues were $18.9 million, a decrease of 8.1% compared to the prior year period. Excluding the impact of foreign currency fluctuations, first quarter 2013 net revenues decreased 7.3% compared to the prior year period. The decrease in constant currency revenue growth was due to a decline in sales of intra-aortic balloon pumps and the impact of fewer shipping days in the quarter as compared to the first quarter of 2012.

OEM and Development Services (“OEM”) first quarter 2013 net revenues were $31.3 million, a decrease of 1.1% compared to the prior year period. Excluding the impact of foreign currency fluctuations, first quarter 2013 net revenues also decreased 1.1% compared to the prior year period. The decrease in revenue was primarily due to a decline in sales of catheter products and the impact of fewer shipping days in the quarter as compared to the first quarter of 2012.

 

     Three Months Ended      % Increase/ (Decrease)  
     March 31, 2013      April 1, 2012      Constant
Currency
    Foreign
Currency
    Total
Change
 
     (Dollars in millions)                     

Critical Care

   $ 287.0       $ 256.2         12.0     —          12.0

Surgical Care

     74.7         72.1         3.3     0.3     3.6

Cardiac Care

     18.9         20.6         (7.3 %)      (0.8 %)      (8.1 %) 

OEM

     31.3         31.7         (1.1 %)      —          (1.1 %) 
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

 

Total

   $ 411.9       $ 380.6         8.2     —          8.2
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

 

Segment Revenues

Americas first quarter 2013 net revenues were $195.8 million, an increase of 8.5% compared to the prior year period. Excluding the impact of foreign currency fluctuations, first quarter 2013 net revenues also increased 8.5% compared to the prior year period. The increase in constant currency revenue growth was due to LMA product sales, new product introductions and price increases, partially offset by the impact of fewer shipping days in the quarter as compared to the first quarter of 2012.

EMEA first quarter 2013 net revenues were $142.4 million, an increase of 5.8% compared to the prior year period. Excluding the impact of foreign currency fluctuations, first quarter 2013 net revenues increased 5.4% compared to the prior year period. The increase in constant currency revenue growth was due to LMA product sales and new product introductions, partially offset by the impact of fewer shipping days in the quarter as compared to the first quarter of 2012 and price decreases.

Asia first quarter 2013 net revenues were $42.4 million, an increase of 24.8% compared to the prior year period. Excluding the impact of foreign currency fluctuations, first quarter 2013 net revenues increased 26.8% compared to the prior year period. The increase in constant currency revenue growth was due to LMA product sales and price increases.


     Three Months Ended      % Increase/ (Decrease)  
     March 31, 2013      April 1, 2012      Constant
Currency
    Foreign
Currency
    Total
Change
 
     (Dollars in millions)                     

Americas

   $ 195.8       $ 180.3         8.5     —          8.5

EMEA

     142.4         134.6         5.4     0.4     5.8

Asia

     42.4         34.0         26.8     (2.0 %)      24.8

OEM

     31.3         31.7         (1.1 %)      —          (1.1 %) 
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

 

Total

   $ 411.9       $ 380.6         8.2     —          8.2
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

 

OTHER FINANCIAL HIGHLIGHTS AND KEY PERFORMANCE METRICS

Depreciation expense and amortization of intangible assets and deferred financing costs for the three months of 2013 were $26.3 million compared to $22.7 million for the prior year period.

Cash and cash equivalents at March 31, 2013 were $306.6 million compared to $337.0 million at December 31, 2012.

Net accounts receivable at March 31, 2013 were $307.0 million compared to $298.0 million at December 31, 2012.

Net inventories at March 31, 2013 were $332.8 million compared to $323.3 million at December 31, 2012.

Net debt obligations at March 31, 2013 were $723.1 million compared to $692.7 million at December 31, 2012.

2013 OUTLOOK

The Company’s financial estimates for full year 2013 are as follows:

Constant currency revenue growth between 11% and 13%.

Adjusted diluted earnings per share in the range of $4.70 to $4.90.

2013 OUTLOOK EARNINGS PER SHARE RECONCILIATION

 

     Low      High  

Diluted earnings per share

   $ 3.20       $ 3.40   

Restructuring and impairment charges, net of tax

   $ 0.51       $ 0.51   

Intangible amortization expense, net of tax

   $ 0.82       $ 0.82   

Amortization of debt discount on convertible notes, net of tax

   $ 0.17       $ 0.17   
  

 

 

    

 

 

 

Adjusted diluted earnings per share

   $ 4.70       $ 4.90   
  

 

 

    

 

 

 


CONFERENCE CALL WEBCAST AND ADDITIONAL INFORMATION

As previously announced, Teleflex will comment on its financial results on a conference call to be held today at 8:00 a.m. (ET). The call will be available live and archived on the company’s website at www.teleflex.com and the accompanying presentation will be posted prior to the call. An audio replay will be available until May 7, 2013, 11:59pm (ET), by calling 888-286-8010 (U.S./Canada) or 617-801-6888 (International), Passcode: 82225144.

ADDITIONAL NOTES

Constant currency revenue and growth exclude the impact of translating the results of international subsidiaries at different currency exchange rates from period to period.

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

Product group results and commentary exclude the impact of discontinued operations, items included in restructuring and impairment charges, and losses and other charges set forth in the condensed consolidated statements of income and in the Reconciliation of Consolidated Statement of Income Items set forth below.

NOTES ON NON-GAAP FINANCIAL MEASURES

This press release includes certain non-GAAP financial measures. These measures include (i) adjusted diluted earnings per share, which excludes, depending on the period presented, the effect of charges associated with a goodwill impairment, our restructuring programs and asset impairments, losses and other charges related to acquisition costs, charges associated with the amortization of additional interest expense related to an interest rate swap terminated in 2011, intangible amortization expense, the amortization of debt discount on convertible notes and a litigation verdict against the Company with respect to a non-operating joint venture; and (ii) constant currency revenue and growth, which exclude the impact of translating the results of international subsidiaries at different currency exchange rates from period to period. Consistent with past practice, adjusted diluted earnings per share has not been adjusted to exclude the benefit resulting from the forfeiture of equity awards. Management believes these measures are useful to investors because they eliminate items that do not reflect Teleflex’s day-to-day operations. In addition, management uses these financial measures for internal managerial purposes, when publicly providing guidance on possible future results, and to assist in our evaluation of period-to-period comparisons. These financial measures are presented in addition to results presented in accordance with generally accepted accounting principles (“GAAP”) and should not be relied upon as a substitute for GAAP financial measures. Tables reconciling these non-GAAP measures to the most directly comparable GAAP measures are set forth below. This press release also includes forecasted constant currency revenue growth, which is also a non-GAAP measure. A reconciliation of forecasted constant currency revenue growth to GAAP forecasted growth has not been provided as management is unable to forecast trends in foreign currency exchange rates.


RECONCILIATION OF CONSOLIDATED STATEMENT OF INCOME ITEMS

Dollars in millions, except per share amounts

Quarter Ended - March 31, 2013

 

    

Cost

of

goods
sold

    

Selling,

general and
administrative
expenses

     Goodwill
impairment
    

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
 

GAAP Basis

   $ 211.4       $ 127.0         —         $ 9.2       $ 14.0       $ 7.7       $ 27.5      $ 0.64   

Adjustments

                      

Restructuring and other impairment charges

     —           —           —           9.2         —           2.6         6.6      $ 0.15   

Losses and other charges (A)

     0.5         1.4         —           —           —           0.7         1.2      $ 0.02   

Amortization of debt discount on convertible notes

     —           —           —           —           2.8         1.0         1.8      $ 0.04   

Intangible amortization expense

     —           12.4         —           —           —           4.3         8.1      $ 0.19   

Tax Adjustment (D)

     —           —           —           —           —           0.9         (0.9   $ (0.02

Adjusted basis

   $ 210.9       $ 113.2         —           —         $ 11.2       $ 17.2       $ 44.3      $ 1.03   

Quarter Ended - April 1, 2012

 

    

Cost

of

goods
sold

    

Selling,

general and
administrative
expenses

     Goodwill
impairment
    

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
 

GAAP Basis

   $ 196.5       $ 112.1       $ 332.1       $ (1.3   $ 17.7       $ (4.0   $ (284.3   $ (6.97

Adjustments

                    

Goodwill impairment

     —           —           332.1         —          —           17.0        315.1      $ 7.73   

Restructuring and other impairment charges

     —           —           —           (1.3     —           (0.6     (0.7   $ (0.02

Early termination of interest rate swap (B)

     —           —           —           —          3.8         1.4        2.4      $ 0.06   

Amortization of debt discount on convertible notes

     —           —           —           —          2.6         0.9        1.7      $ 0.04   

Intangible amortization expense

     —           10.5         —           —          —           3.8        6.7      $ 0.16   

Anti-dilutive effect on EPS (C)

     —           —           —           —          —           —          —        $ (0.01

Adjusted basis

   $ 196.5       $ 101.6         —           —        $ 11.3       $ 18.5      $ 40.7      $ 0.99   


(A) In 2013, losses and other charges include approximately $0.4 million, net of tax, or $0.00 per share, related to acquisition costs; and $0.8 million, net of tax or $0.02 per share, related to a litigation verdict against the Company with respect to a non-operating joint venture.
(B) In 2011, the Company terminated an interest rate swap that, at the date of termination, had a notional amount of $350 million. The interest rate swap was designated as a cash flow hedge against the term loan under our senior credit facility. At the date of termination, the interest rate swap was in a liability position resulting in a cash payment by the Company of approximately $14.8 million, which included $3.1 million of accrued interest. In accordance with GAAP, the Company amortized this amount as additional interest expense over the remainder of the original term of the interest rate swap, which expired in September 2012. In the first quarter of 2012, the impact of the amortization, net of tax, was approximately $2.4 million, or $0.06 per share.
(C) The Company has presented results using basic weighted average shares with the impact of dilution on adjusted income, separately. Under applicable accounting guidance, if a company has a net loss from continuing operations, as was the case for the Company in 2012, no common shares that potentially may be issued are included in the computation of diluted per-share amounts because such inclusion would result in an anti-dilutive per share amount. However, the Company had net income on an adjusted basis in 2012. Therefore, common shares that would have a dilutive effect on adjusted net income are deemed to be outstanding for purposes of the calculation of 2012 adjusted diluted earnings per share.
(D) The tax adjustment represents a net benefit resulting from (i) the resolution (including the expiration of statues of limitations) of various prior years’ U.S. federal, state and foreign tax matters, and (ii) the filing of amended prior years’ tax returns.

RECONCILIATION OF NET DEBT OBLIGATIONS

 

     March 31, 2013      December 31, 2012  
     (Dollars in thousands)  

Note payable and current portion of long-term borrowings

   $ 4,700       $ 4,700   

Long term borrowings

     968,035         965,280   

Unamortized debt discount

     56,965         59,720   
  

 

 

    

 

 

 

Total debt obligations

     1,029,700         1,029,700   

Less: cash and cash equivalents

     306,554         337,039   
  

 

 

    

 

 

 

Net debt obligations

   $ 723,146       $ 692,661   
  

 

 

    

 

 

 

ABOUT TELEFLEX INCORPORATED

Teleflex is a leading global provider of specialty medical devices for a range of procedures in critical care and surgery. Our mission is to provide solutions that enable healthcare providers to improve outcomes and enhance patient and provider safety. Headquartered in Limerick, PA, Teleflex employs approximately 11,700 people worldwide and serves healthcare providers in more than 140 countries. For additional information about Teleflex please refer to www.teleflex.com.

CAUTION CONCERNING FORWARD-LOOKING INFORMATION

This press release contains forward-looking statements, including, but not limited to, forecasted 2013 constant currency revenue growth and adjusted earnings per share. Actual results could differ materially from those in the forward-looking statements due to, among other things, conditions in the end markets we serve, customer reaction to new products and programs, our ability to achieve sales growth, price increases or cost reductions; changes in the reimbursement practices of third party payors; our ability to realize efficiencies and to execute on our strategic initiatives; changes in material costs and surcharges; market acceptance and unanticipated difficulties in connection with the introduction of new products and product line extensions; product recalls; unanticipated difficulties in connection with the consolidation of manufacturing and administrative functions; unanticipated difficulties, expenditures and delays in complying with government regulations applicable to our businesses; the impact of government healthcare reform legislation; our ability to meet our debt obligations; changes in general and international economic conditions; and other factors described or incorporated in our filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the year ended December 31, 2012.


TELEFLEX INCORPORATED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)

(Unaudited)

 

     Three Months Ended  
     March 31,
2013
    April 1,
2012
 
     (Dollars and shares in thousands,
except per share)
 

Net revenues

   $ 411,877      $ 380,567   

Cost of goods sold

     211,357        196,453   
  

 

 

   

 

 

 

Gross profit

     200,520        184,114   

Selling, general and administrative expenses

     126,950        112,136   

Research and development expenses

     15,007        11,553   

Goodwill impairment

     —          332,128   

Restructuring and other impairment charges

     9,159        (1,325
  

 

 

   

 

 

 

Income (loss) from continuing operations before interest and taxes

     49,404        (270,378

Interest expense

     14,193        18,211   

Interest income

     (157     (478
  

 

 

   

 

 

 

Income (loss) from continuing operations before taxes

     35,368        (288,111

Taxes (benefit) on income (loss) from continuing operations

     7,667        (3,998
  

 

 

   

 

 

 

Income (loss) from continuing operations

     27,701        (284,113
  

 

 

   

 

 

 

Operating income (loss) from discontinued operations

     (758     929   

Taxes (benefit) on income (loss) from discontinued operations

     (296     324   
  

 

 

   

 

 

 

Income (loss) from discontinued operations

     (462     605   
  

 

 

   

 

 

 

Net income (loss)

     27,239        (283,508

Less: Income from continuing operations attributable to noncontrolling interest

     201        227   
  

 

 

   

 

 

 

Net income (loss) attributable to common shareholders

   $ 27,038      $ (283,735
  

 

 

   

 

 

 

Earnings per share available to common shareholders:

    

Basic:

    

Income (loss) from continuing operations

   $ 0.67      $ (6.97

Income (loss) from discontinued operations

     (0.01     0.01   
  

 

 

   

 

 

 

Net income (loss)

   $ 0.66      $ (6.96
  

 

 

   

 

 

 

Diluted:

    

Income (loss) from continuing operations

   $ 0.64      $ (6.97

Income (loss) from discontinued operations

     (0.01     0.01   
  

 

 

   

 

 

 

Net income (loss)

   $ 0.63      $ (6.96
  

 

 

   

 

 

 

Dividends per share

   $ 0.34      $ 0.34   

Weighted average common shares outstanding:

    

Basic

     41,014        40,769   

Diluted

     43,047        40,769   

Amounts attributable to common shareholders:

    

Income (loss) from continuing operations, net of tax

   $ 27,500      $ (284,340

Income (loss) from discontinued operations, net of tax

     (462     605   
  

 

 

   

 

 

 

Net income (loss)

   $ 27,038      $ (283,735
  

 

 

   

 

 

 


TELEFLEX INCORPORATED AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

 

     March 31,
2013
     December 31,
2012
 
     (Dollars in thousands)  
ASSETS      

Current assets

     

Cash and cash equivalents

   $ 306,554       $ 337,039   

Accounts receivable, net

     307,020         297,976   

Inventories, net

     332,820         323,347   

Prepaid expenses and other current assets

     28,940         28,712   

Prepaid taxes

     28,711         27,160   

Deferred tax assets

     45,620         46,882   

Assets held for sale

     7,836         7,963   
  

 

 

    

 

 

 

Total current assets

     1,057,501         1,069,079   

Property, plant and equipment, net

     300,830         297,945   

Goodwill

     1,236,876         1,249,456   

Intangible assets, net

     1,034,589         1,058,792   

Investments in affiliates

     1,947         2,066   

Deferred tax assets

     204         296   

Other assets

     61,780         61,863   
  

 

 

    

 

 

 

Total assets

   $ 3,693,727       $ 3,739,497   
  

 

 

    

 

 

 
LIABILITIES AND EQUITY      

Current liabilities

     

Current borrowings

   $ 4,700       $ 4,700   

Accounts payable

     67,383         75,165   

Accrued expenses

     74,200         65,064   

Current portion of contingent consideration

     21,931         23,693   

Payroll and benefit-related liabilities

     60,428         74,586   

Accrued interest

     9,576         9,418   

Income taxes payable

     17,221         15,573   

Other current liabilities

     6,029         6,206   
  

 

 

    

 

 

 

Total current liabilities

     261,468         274,405   

Long-term borrowings

     968,035         965,280   

Deferred tax liabilities

     409,289         419,266   

Pension and postretirement benefit liabilities

     159,147         170,946   

Noncurrent liability for uncertain tax positions

     68,917         68,292   

Other liabilities

     51,794         59,771   
  

 

 

    

 

 

 

Total liabilities

     1,918,650         1,957,960   

Commitments and contingencies

     

Total common shareholders’ equity

     1,772,248         1,778,950   

Noncontrolling interest

     2,829         2,587   
  

 

 

    

 

 

 

Total equity

     1,775,077         1,781,537   
  

 

 

    

 

 

 

Total liabilities and equity

   $ 3,693,727       $ 3,739,497   
  

 

 

    

 

 

 


TELEFLEX INCORPORATED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

     Three Months Ended  
     March 31, 2013     April 1, 2012  
     (Dollars in thousands)  

Cash Flows from Operating Activities of Continuing Operations:

    

Net income (loss)

   $ 27,239      $ (283,508

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

    

Loss (income) from discontinued operations

     462        (605

Depreciation expense

     10,153        8,630   

Amortization expense of intangible assets

     12,438        10,510   

Amortization expense of deferred financing costs and debt discount

     3,750        3,530   

Stock-based compensation

     2,791        1,719   

In-process research and development impairment

     4,494        —     

Goodwill impairment

     —          332,128   

Deferred income taxes, net

     476        (12,624

Other

     (12,872     (3,877

Changes in operating assets and liabilities, net of effects of acquisitions and disposals:

    

Accounts receivable

     (16,420     (19,315

Inventories

     (13,693     2,372   

Prepaid expenses and other current assets

     (435     (1,812

Accounts payable and accrued expenses

     (13,429     (9,272

Income taxes receivable and payable, net

     1,139        (1,560
  

 

 

   

 

 

 

Net cash provided by operating activities from continuing operations

     6,093        26,316   
  

 

 

   

 

 

 

Cash Flows from Investing Activities of Continuing Operations:

    

Expenditures for property, plant and equipment

     (15,635     (13,330

Payments for businesses and intangibles acquired, net of cash acquired

     (5,679     —     
  

 

 

   

 

 

 

Net cash used in investing activities from continuing operations

     (21,314     (13,330
  

 

 

   

 

 

 

Cash Flows from Financing Activities of Continuing Operations:

    

Decrease in notes payable and current borrowings

     —          (286

Proceeds from stock compensation plans

     4,326        1,594   

Dividends

     (13,964     (13,866
  

 

 

   

 

 

 

Net cash used in financing activities from continuing operations

     (9,638     (12,558
  

 

 

   

 

 

 

Cash Flows from Discontinued Operations:

    

Net cash used in operating activities

     (629     (2,178

Net cash used in investing activities

     —          (1,699
  

 

 

   

 

 

 

Net cash used in discontinued operations

     (629     (3,877
  

 

 

   

 

 

 

Effect of exchange rate changes on cash and cash equivalents

     (4,997     10,282   
  

 

 

   

 

 

 

Net (decrease) increase in cash and cash equivalents

     (30,485     6,833   

Cash and cash equivalents at the beginning of the period

     337,039        584,088   
  

 

 

   

 

 

 

Cash and cash equivalents at the end of the period

   $ 306,554      $ 590,921