Teleflex(TFX) - 2021 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - In Q1 2021, revenue was $633.9 million, down 2.6% year-over-year on a constant currency basis, primarily due to COVID-19 impacts [6][9] - Adjusted earnings per share (EPS) was $2.87, up 5.5% year-over-year, exceeding expectations [8][25] - Adjusted gross margin was 59.4%, an increase of 210 basis points year-over-year, while adjusted operating margin was 27.5%, up 190 basis points [9][23] Business Line Data and Key Metrics Changes - Vascular Access revenue increased by 5.8% to $164 million, with a 9.3% increase adjusted for selling days [13] - Interventional Access revenue decreased by 6.4% to $96.2 million, with a 3.8% decline adjusted for selling days [14] - Anesthesia revenue grew by 7% to $84.9 million, or 9.9% adjusted for selling days [15] - Surgical revenue was $80.4 million, representing 2.3% growth or 4.7% adjusted for selling days [16] - Interventional Urology revenue declined by 1.3% to $73.4 million, with a 1.9% increase adjusted for selling days [17] - Other category revenue declined by 15.3% to $81.7 million, or 12.6% adjusted for selling days [18] Market Data and Key Metrics Changes - Americas revenue was $375.5 million, up 4.7% or 8.3% on a day sales adjusted basis [11] - EMEA revenue was $141.2 million, down 16.9% or 14.4% on a day sales adjusted basis [11] - Asia revenue totaled $63.7 million, representing 10.3% growth with no selling day impact [12] Company Strategy and Development Direction - The company is focused on continuous improvement and efficiency through a new restructuring plan aimed at streamlining business functions [8][25] - The integration of the HPC acquisition has been completed, with additional capacity expected to drive growth in the second half of the year [13] - The company anticipates significant growth in the Interventional Urology segment, expecting at least 30% growth over 2020 levels [28] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the recovery of procedures as COVID-19 impacts lessen, particularly in the UroLift segment [41][49] - The company raised its revenue growth guidance for 2021 to between 8.5% and 9.75% on a constant currency basis, reflecting strong Q1 performance [28][31] - Management noted that the Americas and Asia are recovering more quickly than Europe [12] Other Important Information - The company expects to realize total annual pretax savings of between $13 million and $16 million from the restructuring plan once fully implemented [25][26] - Cash flow from operations totaled $110.8 million, a significant increase from a net use of cash in the prior year period [27] Q&A Session Summary Question: Trends on UroLift and growth expectations - Management indicated that UroLift growth in Q1 2021 was approximately 30% compared to Q1 2019, with expectations for continued growth [38][40] Question: Management changes and market perception - Management confirmed that while there were changes in leadership, the core team remains stable, and the culture at Teleflex supports retention [41] Question: UroLift expansion and DTC campaign - Management plans to run a national DTC campaign for the full year, expecting significant patient engagement and procedure recovery as confidence returns [48][49] Question: Competitive landscape for UroLift - Management reported no significant changes in the competitive landscape and emphasized strong patient outcomes as a key differentiator [76] Question: EMEA market recovery - Management noted that EMEA is lagging but expects a reversal as COVID restrictions ease [80]