WAYNE, PA — Teleflex Incorporated (NYSE: TFX) this week announced financial results for the third quarter ended October 1, 2023.
Third quarter financial summary
- Revenues of $746.4 million, up 8.7% compared to the prior year period; up 7.4% on a constant currency basis
- GAAP diluted EPS from continuing operations of $2.91, compared to $2.16 in the prior year period
- Adjusted diluted EPS from continuing operations of $3.64, compared to $3.27 in the prior year period
2023 guidance summary
- Narrowing GAAP revenue growth guidance to 6.25% to 6.45%
- Raising constant currency revenue growth guidance range to 6.4% to 6.6%
- Raising GAAP EPS from continuing operations guidance to $7.95 to $8.15
- Narrowing adjusted diluted EPS from continuing operations guidance to $13.30 to $13.50
“Following a strong first half performance, our third quarter built upon Teleflex’s durable growth profile with a 7.4% constant currency revenue increase year-over-year. We witnessed stability in surgical procedures, continued strength in our Asia Pacific market, and healthy increases in our Interventional and OEM businesses,” said Liam Kelly, Teleflex’s Chairman, President and Chief Executive Officer. “We also recently completed our acquisition of Palette Life Sciences AB, which will enable our Interventional Urology business unit to bring urologists, radiation oncologists, and other specialists more innovative technologies that can positively impact patient care. Our updated constant currency growth guidance reflects the stronger than expected performance over the nine-months of 2023. In addition, the guidance includes the expected contribution from our acquisition of Palette partly offset by a loss of revenue from the termination of the manufacturing transition services agreement associated with the divestiture of certain respiratory assets to Medline, which is now expected to occur earlier than originally planned.”
NET REVENUE BY SEGMENT
The following table provides information regarding net revenues in each of the Company’s reportable operating segments for the three and nine months ended October 1, 2023 and September 25, 2022 on both a GAAP and constant currency basis.
| Three Months Ended | % Increase / (Decrease) | ||||||||
| October 1, 2023 | September 25, 2022 | Reported Revenue Growth | Currency Impact | Constant Currency Revenue Growth |
|||||
| Americas | $428.2 | $405.1 | 5.7% | 0.2% | 5.5% | ||||
| EMEA | 142.7 | 128.4 | 11.1% | 7.1% | 4.0% | ||||
| Asia | 93.2 | 82.0 | 13.6% | (3.5)% | 17.1% | ||||
| OEM | 82.3 | 71.3 | 15.5% | 1.5% | 14.0% | ||||
| Consolidated | $746.4 | $686.8 | 8.7% | 1.3% | 7.4% | ||||
| Nine Months Ended | % Increase / (Decrease) | ||||||||
| October 1, 2023 | September 25, 2022 | Reported Revenue Growth | Currency Impact | Constant Currency Revenue Growth | |||||
| Americas | $1,264.7 | $1,195.7 | 5.8% | —% | 5.8% | ||||
| EMEA | 433.9 | 410.5 | 5.7% | 0.8% | 4.9% | ||||
| Asia | 258.6 | 227.8 | 13.5% | (5.9)% | 19.4% | ||||
| OEM | 243.4 | 199.0 | 22.4% | 0.5% | 21.9% | ||||
| Consolidated | $2,200.6 | $2,033.0 | 8.2% | (0.5)% | 8.7% | ||||
NET REVENUE BY GLOBAL PRODUCT CATEGORY
The following table provides information regarding net revenues in each of the Company’s global product categories for the three and nine months ended October 1, 2023 and September 25, 2022 on both a GAAP and constant currency basis.
| Three Months Ended | % Increase / (Decrease) | ||||||||
| October 1, 2023 | September 25, 2022 | Reported Revenue Growth | Currency Impact | Constant Currency Revenue Growth | |||||
| Vascular Access | $169.9 | $167.1 | 1.7% | 1.4% | 0.3% | ||||
| Interventional | 134.1 | 108.7 | 23.3% | 0.9% | 22.4% | ||||
| Anesthesia | 97.6 | 97.6 | —% | 1.3% | (1.3)% | ||||
| Surgical | 112.8 | 93.1 | 21.1% | 0.5% | 20.6% | ||||
| Interventional Urology | 73.6 | 79.0 | (6.8)% | —% | (6.8)% | ||||
| OEM | 82.3 | 71.3 | 15.5% | 1.5% | 14.0% | ||||
| Other | 76.1 | 69.9 | 8.8% | 3.5% | 5.3% | ||||
| Consolidated | $746.4 | $686.8 | 8.7% | 1.3% | 7.4% | ||||
| Nine Months Ended | % Increase / (Decrease) | ||||||||
| October 1, 2023 | September 25, 2022 | Reported Revenue Growth | Currency Impact | Constant Currency Revenue Growth | |||||
| Vascular Access | $521.3 | $497.2 | 4.9% | (0.4)% | 5.3% | ||||
| Interventional | 375.8 | 319.9 | 17.5% | (0.6)% | 18.1% | ||||
| Anesthesia | 291.8 | 289.2 | 0.9% | (0.3)% | 1.2% | ||||
| Surgical | 317.8 | 282.5 | 12.5% | (1.6)% | 14.1% | ||||
| Interventional Urology | 226.8 | 233.7 | (2.9)% | (0.1)% | (2.8)% | ||||
| OEM | 243.4 | 199.0 | 22.4% | 0.5% | 21.9% | ||||
| Other | 223.7 | 211.5 | 5.7% | 0.2% | 5.5% | ||||
| Consolidated | $2,200.6 | $2,033.0 | 8.2% | (0.5)% | 8.7% | ||||
OTHER FINANCIAL HIGHLIGHTS
- Depreciation expense, amortization of intangible assets and deferred financing charges for the nine months ended October 1, 2023 totaled $180.5 million compared to $174.1 million for the prior year period.
- Cash and cash equivalents at October 1, 2023 were $881.5 million compared to $292.0 million at December 31, 2022.
- Net accounts receivable at October 1, 2023 were $425.2 million compared to $408.8 million at December 31, 2022.
- Inventories at October 1, 2023 were $625.1 million compared to $578.5 million at December 31, 2022.
2023 OUTLOOK
The Company narrowed its full year 2023 GAAP revenue growth outlook to 6.25% to 6.45%, reflecting its estimate of an approximately 0.15% negative impact of foreign exchange rate fluctuations. On a constant currency basis, the Company increased its full year 2023 revenue growth outlook of 6.40% to 6.60% year-over-year.
The Company raised its full year 2023 GAAP diluted earnings per share from continuing operations guidance to $7.95 to $8.15. The Company narrowed its 2023 adjusted diluted earnings per share from continuing operations guidance to $13.30 to $13.50, representing growth of 1.8% to 3.4% year-over-year.
Forecasted 2023 Constant Currency Revenue Growth Reconciliation
| Low | High | ||
| Forecasted 2023 GAAP revenue growth | 6.25% | 6.45% | |
| Estimated impact of foreign currency exchange rate fluctuations | (0.15)% | (0.15)% | |
| Forecasted 2023 constant currency revenue growth | 6.40% | 6.60% | |
Forecasted 2023 Adjusted Diluted Earnings Per Share From Continuing Operations Reconciliation
| Low | High | ||||
| Forecasted GAAP diluted earnings per share from continuing operations | $7.95 | $8.15 | |||
| Restructuring, restructuring related and impairment items, net of tax | $0.61 | $0.61 | |||
| Acquisition, integration and divestiture related items, net of tax | $(0.29) | $(0.29) | |||
| Other items, net of tax | $0.11 | $0.11 | |||
| Pension termination and related charges, net of tax | $0.80 | $0.80 | |||
| ERP Implementation, net of tax | $0.05 | $0.05 | |||
| MDR, net of tax | $0.60 | $0.60 | |||
| Intangible amortization expense, net of tax | $3.47 | $3.47 | |||
| Forecasted adjusted diluted earnings per share from continuing operations, net of tax | $13.30 | $13.50 | |||
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