- Revenue: $749.7 million, up 0.9% year over year on a GAAP basis; adjusted revenue $763.5 million, up 2.7% year over year on a reported basis and 3.4% on a constant currency basis.
- Adjusted Earnings Per Share (EPS): $3.42, a 0.3% increase year over year.
- Adjusted Gross Margin: 60.8%, a 180-basis-point increase versus the prior year period.
- Adjusted Operating Margin: 26.7%, a 10-basis-point year-over-year increase.
- Net Interest Expense: $19.4 million, up from $16.6 million in the prior year period.
- Adjusted Tax Rate: 12.3%, compared to 10.8% in the prior year period.
- Cash Flow from Operations: $204.5 million for the six months, up from $170.6 million in the prior year period.
- Americas Revenue: $426.8 million, a 0.6% increase year over year.
- EMEA Revenue: $160.9 million, a 9.8% increase year over year.
- Asia Revenue: $87 million, a 4% increase year over year.
- Vascular Access Revenue: $181.1 million, a 4.8% increase year over year.
- Interventional Revenue: $141.2 million, a 13.8% increase year over year.
- Anesthesia Revenue: $102.5 million, a 2.3% increase year over year.
- Surgical Revenue: $111.3 million, a 6.4% increase year over year.
- Interventional Urology Revenue: $83.1 million, a 7.1% increase year over year.
- OEM Revenue: $88.8 million, a 5.8% increase year over year.
- Other Revenue: $55.5 million, a 26.4% decline year over year.
- 2024 Revenue Guidance: Adjusted constant currency revenue growth of 4.25% to 5.25%.
- 2024 Adjusted EPS Guidance: $13.80 to $14.20.
Release Date: August 01, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Teleflex Inc (TFX, Financial) reported second-quarter revenues of $749.7 million, up 0.9% year over year on a GAAP basis, and adjusted revenues of $763.5 million, up 2.7% year over year.
- The company experienced strong growth in its EMEA segment, with revenues increasing by 9.8% year over year, driven by a targeted strategy to increase geographic availability and utilization.
- Interventional revenue increased by 13.8% year over year, with significant contributions from products like MANTA and intra-aortic balloon pumps.
- Teleflex Inc (TFX) raised its 2024 revenue guidance for Palette Life Sciences to $70 million to $72 million, reflecting better-than-expected performance.
- The company announced a $500 million share repurchase program, demonstrating confidence in its financial position and commitment to returning capital to shareholders.
Negative Points
- Teleflex Inc (TFX) faced a $15.8 million increase in reserves due to an adverse ruling by the Italian constitutional court, impacting its EMEA segment revenue.
- The ongoing doctors' strike in South Korea negatively impacted the company's APAC growth by approximately 5%.
- The interventional urology segment faced challenges, particularly in the office side of service for UroLift, affecting growth.
- The company's adjusted earnings per share only increased by 0.3% year over year, indicating limited bottom-line growth.
- Teleflex Inc (TFX) experienced a decline in 'other revenue' by 26.4% year over year, primarily due to the planned exit of the MSA by Medline.
Q & A Highlights
Q: Can you provide more details on the Intra-Aortic Balloon Pumps opportunity and what you're hearing on the ground?
A: Liam Kelly, CEO, explained that the Intra-Aortic Balloon Pump opportunity is significant, contributing to the increased revenue guidance for the year. Teleflex has been taking market share over the past 2.5 years, and the opportunity is evolving in real-time. The company expects most pumps to ship in Q4, with robust quote activity since a competitor's announcement. The focus is on maintaining long-term market share and catheter sales. The opportunity is primarily in the US, with less impact expected in Europe due to a temporary CE mark suspension.
Q: How does the share repurchase program affect your capital allocation strategy, and does it signal a shift away from M&A?
A: Liam Kelly, CEO, emphasized that the share repurchase program is in addition to the ongoing M&A strategy. Teleflex's strong free cash flow and healthy leverage allow for both share repurchases and M&A. The company remains active in the M&A market, focusing on high-return opportunities, and the share repurchase is another way to return capital to shareholders.
Q: Can you provide an update on the interventional urology business, specifically regarding UroLift and Barrigel?
A: Liam Kelly, CEO, noted that the doctor's office side for UroLift remains challenged, similar to Q1. However, Palette Life Sciences, particularly Barrigel, is performing well, leading to increased revenue guidance. The cross-training of sales reps is complete, and the company anticipates improvement in the second half as dual-bag reps return to the field.
Q: What is the impact of the Italian payback measure on your financials, and why is it being adjusted?
A: Thomas Powell, CFO, explained that the company took additional reserves totaling $15.8 million, with $13.8 million related to prior years. The adjustment is made to provide visibility into the current year's performance, as the prior-period impact is not part of ongoing operations. The current year's impact is booked in real-time.
Q: How does the Ringer balloon catheter fit into your existing portfolio, and what are your expectations for market share?
A: Liam Kelly, CEO, stated that the Ringer catheter, with a PTCA indication, complements the existing complex catheter portfolio. It targets a $40 million market and offers innovative features for interventional cardiologists. There is no expected cannibalization of the current portfolio, and the product is ahead of its timeline, indicating strong execution by the R&D team.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
