Teleflex (NYSE:TFX) FY Conference September 09, 2025 03:20 PM ET Company ParticipantsPatrick Wood - Managing DirectorLiam Kelly - Chairman, President & CEOPatrick WoodK. Let's kick it off. Thanks so much, everyone. Day two, Morgan Stanley Global Healthcare Conference. Patrick, I'm obviously on the MedTech team.I have no idea where the where disclosures thing goes, but it's morgansmiley.com/researchdisclosures. Given I've read that out about 20 times now today, so, I'm sure you can all go there and have a re ...

Company Overview - Teleflex has completed the acquisition of the majority of BIOTRONIK SE & Co. KG's Vascular Intervention business for €760 million, significantly enhancing its interventional access product line and global presence in cath labs [1][8] - The acquired business includes a diverse portfolio of coronary and peripheral intervention products, which are expected to bolster Teleflex's innovation pipeline [4][5] Financial Impact - The acquisition is projected to add $0.10 to Teleflex's adjusted earnings per share (EPS) in the first year, with increasing contributions in subsequent years [10] - Teleflex anticipates that the acquired products will generate revenues of €177 million ($204 million) in the second half of 2025, with a constant currency revenue growth expectation of 6% or better from 2026 onward [9] Market Context - The vascular intervention medical devices market was valued at $5.1 billion in 2024 and is expected to grow at a compound annual growth rate (CAGR) of 7.1% through 2033, driven by the rising prevalence of cardiovascular diseases and advancements in technology [11] Recent Developments - Teleflex has announced findings from a multinational study demonstrating the effectiveness of Arrow Chlorhexidine-Impregnated Central Venous Catheters, showing a 70.5% reduction in the incidence of CLABSI [12]

Financial Data and Key Metrics Changes - For Q4 2024, Teleflex reported revenues of $795.4 million, an increase of 2.8% year-over-year on a GAAP basis and 3.2% on an adjusted constant currency basis [11] - Adjusted earnings per share grew 15.1% to $3.89 [13] - For the full year 2024, adjusted constant currency revenues increased 3.1% year-over-year, while adjusted earnings per share was $14.01 [18] Business Line Data and Key Metrics Changes - Interventional and Surgical businesses showed strong performance with adjusted constant currency growth of 18.7% and 12.3% respectively in Q4 [11] - Interventional Urology revenue increased 3.7% on an adjusted constant currency basis, with growth in Palette offset by softness in the UroLift business [19] Market Data and Key Metrics Changes - Adjusted gross margin for Q4 was 60.1%, flat year-over-year, while adjusted operating margin was 27.6%, up 130 basis points [17] - Cash flow from operations increased 24.7% year-over-year to $638.3 million in 2024 [20] Company Strategy and Development Direction - Teleflex announced a definitive agreement to acquire the Vascular Intervention business from BIOTRONIK for approximately EUR760 million, aimed at enhancing growth and market presence in the cath lab [32] - The company plans to separate into two independent publicly traded companies, RemainCo and NewCo, to optimize product portfolios and drive growth [48][49] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving 6%+ revenue growth for RemainCo post-separation, despite current challenges in the UroLift and OEM businesses [106] - The guidance for 2025 anticipates adjusted constant currency growth of 1% to 2%, reflecting headwinds from UroLift and inventory management by customers [24][103] Other Important Information - A noncash goodwill impairment charge of $240 million was recognized for the Interventional Urology North America reporting unit due to subdued revenue growth [21] - The company plans to finance the acquisition through a new term-loan and revolving borrowings under its existing senior credit facility [47] Q&A Session Summary Question: What prompted the review and timing for the separation? - Management indicated that continuous portfolio reviews led to the conclusion that separating the businesses would maximize shareholder value, especially with the addition of the BIOTRONIK business [78][80] Question: How will the sales force be structured post-acquisition? - The acquisition allows for leveraging Teleflex's strong presence in the Americas and BIOTRONIK's strength in EMEA, creating opportunities for synergy [84] Question: What is the growth outlook for the acquired assets? - The acquired portfolio is expected to deliver a constant currency revenue CAGR of 5.4% since 2022, with expectations for growth to exceed 6% post-acquisition [94] Question: What are the expected margins for RemainCo and NewCo? - RemainCo is expected to grow at 6%+ with mid-60s gross margins, while NewCo is anticipated to grow in the low single digits with mid-50s gross margins [118] Question: How will the capital structure be managed post-separation? - The capital structure for both companies will be defined in the coming quarters, with a focus on ensuring both have strong, viable futures [121]