- Revenue: $764.4 million, up 2.4% year-over-year on a GAAP basis.
- Adjusted Earnings Per Share (EPS): $3.49, a 4.1% decrease year-over-year.
- Americas Revenue: $433.3 million, a 1.5% increase year-over-year.
- EMEA Revenue: $150.2 million, a 3.9% increase year-over-year.
- Asia Revenue: $98.3 million, a 5% increase year-over-year.
- Vascular Access Revenue: $180.9 million, a 6.3% increase year-over-year.
- Interventional Revenue: $149.9 million, an 11.4% increase year-over-year.
- Anesthesia Revenue: $101.1 million, a 3.4% increase year-over-year.
- Surgical Revenue: $111.7 million, a 1% decrease year-over-year.
- Interventional Urology Revenue: $83.4 million, a 13.3% increase year-over-year.
- OEM Revenue: $82.6 million, a 0.1% increase year-over-year.
- Other Revenue: $54.8 million, a 28.3% decrease year-over-year.
- Adjusted Gross Margin: 60.8%, a 140 basis point increase year-over-year.
- Adjusted Operating Margin: 27.3%, a 10 basis point increase year-over-year.
- Net Interest Expense: $18.8 million, up from $15.7 million in the prior year period.
- Adjusted Tax Rate: 13.6%, up from 8% in the prior year period.
- Cash Flow from Operations (Year-to-Date): $435.6 million, up from $372.4 million in the prior year period.
- Cash, Cash Equivalents, and Restricted Cash: $277.8 million at the end of the third quarter.
- Net Leverage: Approximately 1.7 times at quarter end.
- 2024 Revenue Guidance: Adjusted constant currency growth of 3.5% to 4%.
- 2024 Adjusted EPS Guidance: $13.90 to $14.20.
Release Date: October 31, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Teleflex Inc (TFX, Financial) reported third quarter revenues of $764.4 million, marking a 2.4% year-over-year increase on a GAAP basis.
- Adjusted earnings per share exceeded expectations at $3.49, despite a 4.1% decrease year-over-year, driven by strong margin performance.
- The company's vascular access segment saw a revenue increase of 6.3% year-over-year, with strong growth in peripheral and central access products.
- Interventional Urology revenue increased by 13.3% year-over-year, driven by Barrigel revenue following the acquisition of Palette Life Sciences.
- Teleflex Inc (TFX) raised its 2024 revenue guidance for Palette Life Sciences to $73 million to $75 million, reflecting strong performance.
Negative Points
- Third quarter revenues were slightly below the guidance range of $765 million to $770 million due to unexpected softness in the OEM business.
- OEM revenue growth was impacted by a large customer deciding to vertically integrate a component, resulting in a loss of revenue.
- UroLift growth was challenged by continued issues in the office site of service, impacting Interventional Urology revenue expectations.
- The ongoing doctor strike in South Korea negatively impacted APAC growth by approximately 2%, with headwinds expected to persist through 2024.
- Teleflex Inc (TFX) adjusted its full-year 2024 revenue guidance downward due to lower-than-anticipated revenue in OEM and Interventional Urology businesses.
Q & A Highlights
Q: Can you clarify the impact of the sales cut on the top line, particularly regarding OEM and other factors?
A: The sales cut is primarily due to two factors: OEM and Interventional Urology. The OEM impact is about $14 million for the full year, mainly due to a customer's vertical integration and inventory management. Interventional Urology, particularly UroLift, is impacted by $8 million due to challenges in the office site of service, hurricanes, and saline shortages.
Q: How are you balancing the $300 million share buyback with potential M&A opportunities?
A: Our balance sheet is strong with a net leverage of 1.7 times, and we have $435 million in free cash flow from operations. We plan to use the remaining $300 million share repurchase authorization opportunistically while actively pursuing M&A opportunities, particularly in the cath lab, intensive care, and emergency medicine sectors.
Q: Will the OEM pressure continue into next year, and how is UroLift performing across different settings?
A: The OEM pressure, particularly from vertical integration, will continue through Q3 of next year. UroLift challenges remain primarily in the office site of service, which is significantly impacted by reimbursement changes. We expect stabilization after the reimbursement changes conclude in 2025.
Q: Can you provide an update on the intra-aortic balloon pump market and its impact on Q4 and 2025?
A: We expect over $10 million in revenue from intra-aortic balloon pumps in Q4, with continued opportunity through the first half of 2025. The competitor's CE mark suspension has been extended, but we anticipate most of the opportunity will be in the Americas.
Q: How is the integration of Palette Life Sciences progressing, and what is the outlook for Barrigel?
A: The integration of Palette is nearly complete, and Barrigel is performing above expectations, with guidance increased to $73-$75 million. The post-radical prostatectomy opportunity for Barrigel is significant, potentially adding a $100 million market opportunity.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
